Escrow & Title
In Michigan, an owner's title insurance policy protects:
AThe lender's interest in the property
BThe property owner against title defects that existed prior to the policy date✓ Correct
CThe buyer against future encumbrances
DThe seller against post-closing claims
Explanation
An owner's title insurance policy protects the buyer/owner against losses from title defects, liens, or encumbrances that existed before the policy was issued and were not discovered during the title search.
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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.
EncumbranceAny claim, lien, charge, or liability attached to real property that affects its value or limits its use.
LienA financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
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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