Escrow & Title
A buyer in an Oklahoma transaction has an owner's title insurance policy. After closing, a judgment lien from a previous owner's debt that was missed in the title search is discovered. The owner's policy will:
ARequire the buyer to resolve the lien themselves
BDefend the buyer's title against the claim and, if necessary, pay the insured loss up to the policy amount✓ Correct
COnly cover the lender's exposure
DExpire 30 days after closing
Explanation
Owner's title insurance protects the buyer/owner against covered title defects that existed prior to the policy date. The insurer defends the title claim and compensates the insured for covered losses up to the policy amount.
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Key Terms to Know
Lien
A financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
Title InsuranceInsurance 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.
Chain of TitleThe sequential record of all transfers of ownership for a piece of property from the original patent holder to the present owner.
Math Concepts
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