Escrow & Title
In Utah, a property seller who fails to pay off a mortgage at closing could result in the buyer:
ANo concern—the title company guarantees all liens are paid
BTaking title subject to an unpaid lien, which would be covered by the title insurance policy if the title company failed to pay it off✓ Correct
CAutomatically owning the property free and clear
DThe mortgage automatically transferring to the buyer
Explanation
If a seller's mortgage is not paid at closing and remains on title, the title insurance company would be liable under the policy for failing to require its payoff. Escrow procedures include verifying and paying all liens from sale proceeds.
Related Utah Escrow & Title Questions
- In Utah, the seller customarily pays for the owner's title insurance policy because:
- An action to quiet title in Utah is a legal proceeding used to:
- Which type of deed is commonly used to convey REO (bank-owned) properties in Utah?
- A Utah title commitment Schedule B-I typically requires which of the following before the title company will issue a policy?
- A Utah title report showing 'CC&Rs recorded in Book X, Page Y' means:
- A title company in Utah acts in a dual capacity as both title insurer and escrow agent. This is:
- A Utah buyer takes title 'subject to' an existing mortgage. This means:
- A Utah title company that discovers a pre-existing lien not paid off at closing:
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