Escrow & Title
In Oregon, what is 'subrogation' in the context of title insurance?
AThe title company's right to process a claim on behalf of the insured
BThe title company's right to step into the insured's shoes to recover from the responsible party after paying a claim✓ Correct
CThe right to assign a title policy to a new owner
DThe process of updating the title policy after refinancing
Explanation
Subrogation is a legal doctrine allowing the title insurer, after paying a claim to the insured, to step into the insured's position and pursue recovery from the party responsible for the title defect. For example, if a title company pays a claim due to an undisclosed mechanic's lien, it may seek reimbursement from the party who created the lien or failed to disclose it.
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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.
DeedA written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).
EncumbranceAny claim, lien, charge, or liability attached to real property that affects its value or limits its use.
State-Specific Concepts
Mechanic's Lien
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