Escrow & Title
In Hawaii, a 'title defect' that is discovered after closing and was unknown to the title insurer at the time of issuing the policy is covered by:
AA. The buyer's homeowner's insurance
BB. The owner's title insurance policy✓ Correct
CC. The lender's title policy only
DD. The real estate agent's E&O insurance
Explanation
An owner's title insurance policy covers the buyer against financial loss from title defects that existed before the policy's effective date but were not known at the time of closing.
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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.
Chain of TitleThe sequential record of all transfers of ownership for a piece of property from the original patent holder to the present owner.
Discount PointsPrepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
Math Concepts
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