Escrow & Title
An owner's title insurance policy in Montana protects:
AThe lender against title defects that arise after closing
BThe buyer against title defects that existed before closing but were not discovered during the title search✓ Correct
CBoth buyer and lender with a single policy
DOnly defects that arise after the date of the policy
Explanation
An owner's title insurance policy protects the buyer against financial loss from title defects that existed before closing but were not discovered during the title search, such as undiscovered liens, fraud, or errors in records.
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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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