Escrow & Title
A North Dakota buyer who does not purchase owner's title insurance is:
AProtected by the lender's title policy
BTaking on the risk of title defects that may not be covered, as the lender's policy only protects the lender✓ Correct
CProtected by the seller's warranty deed
DAutomatically protected by FDIC insurance
Explanation
The lender's title policy protects only the lender's interest in the property. The buyer's ownership interest is not protected by the lender's policy.
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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.
DeedA written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).
Chain of TitleThe sequential record of all transfers of ownership for a piece of property from the original patent holder to the present owner.
Closing CostsFees and expenses paid by the buyer and/or seller at the closing of a real estate transaction, in addition to the property's purchase price.
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