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MD TITLE INSURANCE PRODUCER LICENSE PASSED EXAM
QUESTIONS AND CORRECT ANSWERS
Quasi-Contract - ---Answers---A contract this is implied by law and a way for courts to correct or remedy a situation and to prevent unjust enrichment.
Void for Vagueness - ---Answers---1. An incomplete and uncertain contract based on vague terms --- which may be void
- If a determination is not reached, the courts may void the contract or severe the terms.
Statue of Frauds Includes: - ---Answers---- Contracts that cannot be performed in one year
- Contracts for the sale of real estate, real property, or land.
- Contracts for the sale of goods that are above a certain price
Title Insurance - ---Answers---A contractual obligation that protects against losses that occur when title to a property is not free and clear or defects --- a one time fee payable at the time of closing
Standard Coverage Policy - ---Answers---Insures primarily against defects in title which are discoverable through an examination of the public record --- includes defects in title or recorded liens or encumbrances.
Extended Coverage Policy - ---Answers---Same insurance as the standard policy --- also insures against defects, liens, encumbrances, easements, and encroachments and conflicts in boundary lines that are not reflected in public records
Homeowners Insurance - ---Answers---Insures a house, contents, and may provide coverage for losses due to fire or lighting, theft, vandalism, and personal liability claims. ---- Billed monthly, quarterly, or annually.
Lenders Policy - ---Answers---Insures the lender's security interest in the property has priority over claims that others may have in the property
Owners Policy - ---Answers---Insures the buyer for as long as he or she owns the property --- higher than a loan policy due to the assumption of risk.
Underwriter - ---Answers---A professional who evaluates the risk involved when insuring people or assets and establishes pricing.
- A copy of the producers licensing application is submitted to their domicile state. Or, a completed uniform licensing application is submitted.
- The required application fees paid to the commissioner
- Main state allows reciprocity with MD producers.
8 Application must be completed and submitted to the Commission within 90 days.
Business Entity Producer License - ---Answers---The business entity must designate a licensed producer to serve as the primary point of contact with the Insurance Administration.
- Any changes must be notified by the designated producer to the Insurance Association in 30 Days
Business Entity Designated Producer - ---Answers--- Information to be submitted to the Insurance Administration:
- Name
- Business Address
- Telephone Number
- Fax number
- Email Address
Required Insurance for Title Agents - ---Answers---1. $150,000 Surety Bond: Protects against default and insures performance
- $150,000 Fidelity Bond: Protects against employee dishonesty
- Errors and Omission: Protects against negligence
Certificate of Authority - ---Answers---Allows a person who is not licensed to act as a title insurer --- issued by the Commissioner.
Temporary License Issued To - ---Answers---Surviving spouse. a court appointed representative, or the next of kin of:
- A decease insurance producer
- A mentally or physically impaired insurance producer
And, a member or employee of a business entity
Inducement - ---Answers---A thing that persuades or influences someone to do something
Rebating - ---Answers---When an insurance producer pays or gives something of value as an inducement to enter into an insurance contract or after the insurance has become effective ---- promotional and marketing materials less than $50 may be offered.
Unacceptable Rebate Offers - ---Answers---Gift cards, prizes, raffle tickets, and any other items of value
Insurance Rate - ---Answers---The amount of money collected by an insurance agent for compensation
Kickback - ---Answers---A payment made to someone who has facilitates a transaction or appointment
Escheatment - ---Answers---Abandoned funds ,for three years, that is transferred to the state as unclaimed property
Real Estate Settlement Procedure Act (RESPA) - ---Answers- --Helps consumers become better shoppers and eliminates kickbacks and referral fees that unnecessarily increase the cost of certain services.
RESPA: Section 8 - ---Answers---Prohibits anyone from giving or accepting a dee, kickback, or anything of value in exchange for referrals of a settlement
RESPA: Section 9 - ---Answers---Prohibits a seller from requiring the home buyer to use a title insurance company, either directly or indirectly, as a condition of sale.
RESPA: Section 10 - ---Answers---Limits the amounts that a lender may require a borrow to put into an escrow account to pay real property taxes, hazard insurance, and other charges related to the property.
Consumer Financial Protection Bureau (CFPB) - ---Answers-- -Provides general information about consumer financial products. And, investigates consumer complaints about federal financial products and services.
Retention Fee - ---Answers---Premiums collected by title agents and split between the title agent and insurer. And, the half obtained by the insurer is called a retention fee.
Power of Agency - ---Answers---Allows one to act as the principle based on the powers spelled out within the power of the document.
Title Insurance Producer (TIP) - ---Answers---An individuals, business entity, or attorney that sells, negotiates, and solicits contracts of insurance ---- responsible for the TIPIC.
Actual Notice - ---Answers---Direct knowledge or actual notice of ownership.
Limited Search - ---Answers---Conducted on refinance loan assumptions, or second mortgage transactions --- usually performed on at least the last two owners.
Bring-to-Date - ---Answers---When a title abstractor performs an update on a title report to make sure that the status of title has not changed since original was completed -- -- performed 3 days prior to recording.
Leasehold Assignment - ---Answers---The instrument to transfer leasehold property
General Warranty Deed - ---Answers---A grantor warrants/guarantees that they hold clear title and had a right to transfer the property.
- No hidden liens
- Grantor declares their the owner
- Grantor will compensate for any losses
Present Covenants (GWD) - ---Answers---The sellers (grantors) promise that they have title and possession and that there are no undisclosed covenants
Future Covenants - ---Answers---Grantor guarantees to protect the buyer against any future claims related to the title property.
Special Warranty Deed - ---Answers---The grantor only warrants and defends the title against claims and demands by or through him --- including unencumbered property.
Quitclaim Deed - ---Answers---Grantor passes any interest in real property to the grantee (buyer) --- least protectant and usually between family members and spouses
Trustee's Deed - ---Answers---States that the trustee is acting in accordance with the power of attorney granted.
Non-Judicial Foreclosure - ---Answers---Power-of-Sale --- a lender may proceed with the foreclosure sale without a court order.
Judicial Foreclosure - ---Answers---Property is sold after a court order --- requires that mortgage is given proper notice
Strict Foreclosure - ---Answers---The borrower is given notice and time to make the debt current. If the debt is not satisfied then the lender is awarded the title without sale of the property.
Tenants by the Entirety - ---Answers---like joint tenancy but, between spouses --- probate is not necessary.
Boundary Survey - ---Answers---To find, identify, and measure the location of boundary lines on a parcel of land.
