Escrow & Title
In Colorado, an 'owner's title insurance policy' protects:
AA. Only the lender's interest in the property
BB. The buyer against losses arising from title defects, liens, or encumbrances that existed prior to closing and were not disclosed✓ Correct
CC. The seller from post-closing claims
DD. Both buyer and seller equally
Explanation
An owner's title insurance policy protects the buyer (owner) from financial loss due to title defects, undisclosed liens, errors in public records, or fraud that may arise after closing. A separate lender's title policy protects the lender.
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Key Terms to Know
Title Insurance
Insurance protecting against financial loss from defects in a property's title that existed before closing but were unknown at the time of purchase.
LienA financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
EncumbranceAny claim, lien, charge, or liability attached to real property that affects its value or limits its use.
Abstract of TitleA condensed history of a property's title, summarizing all recorded documents and encumbrances affecting it from the earliest record to the present.
Math Concepts
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