Escrow & Title
A West Virginia title search that reveals an outstanding mortgage from 10 years ago that was paid but never formally released creates:
AAn easement appurtenant
BA cloud on title that should be cleared before closing✓ Correct
CA valid current lien on the property
DA judgment lien in favor of the lender
Explanation
An unreleased mortgage creates a cloud on title even if the debt has been paid. The borrower should obtain a Deed of Release from the lender and record it to clear the cloud on title before or at closing.
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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.
DeedA written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).
EasementA non-possessory right to use another person's land for a specific purpose.
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.
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