Escrow & Title
In Colorado, the 'abstract of title' differs from a 'title insurance policy' in that:
AA. An abstract insures against title defects; a policy only summarizes the title history
BB. An abstract is a historical summary of all recorded documents affecting title; title insurance provides financial protection against losses from title defects✓ Correct
CC. They are the same thing
DD. An abstract covers future title defects; title insurance covers past defects
Explanation
An abstract of title is a chronological summary of all recorded instruments (deeds, mortgages, liens, judgments) affecting a property's title. It provides historical information but does not insure against defects.
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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.
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.
LienA financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
DeedA written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).
Math Concepts
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