CRU Insurance & Title Requirements Flashcards
6 cards from real CRU practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 CRU Insurance & Title Requirements flashcards as text
What is the purpose of an ALTA/NSPS Land Title Survey in residential lending?
Answer: To identify the boundaries, improvements, encroachments, and easements of the property
An ALTA/NSPS survey provides a detailed map of the property showing legal boundaries, structures, encroachments, and easements relevant to title insurance.
Private Mortgage Insurance (PMI) is typically required on conventional loans when the LTV exceeds what threshold?
Answer: 80%
Conventional lenders require PMI when the down payment is less than 20%, meaning the LTV exceeds 80%, to protect against borrower default.
Under the Homeowners Protection Act (HPA), when must a lender automatically cancel borrower-paid PMI on a residential mortgage?
Answer: When the loan balance reaches 78% of the original purchase price or appraised value (whichever is lower), based on scheduled payments
The HPA requires automatic PMI cancellation when the principal balance reaches 78% of the original value based on the amortization schedule, provided the borrower is current.
What is an easement appurtenant in the context of a property's title?
Answer: A right benefiting an adjacent parcel that runs with the land and transfers automatically with ownership
An easement appurtenant benefits a dominant estate (neighboring parcel) and automatically transfers when either parcel is sold, binding future owners.
Which title condition would typically cause a residential underwriter to decline or condition a loan approval?
Answer: An unresolved mechanic's lien from a contractor who worked on the property
An unresolved mechanic's lien is a financial encumbrance that clouds the title and could give the lienholder priority over the new lender's mortgage.
What is the role of a title commitment (also called a preliminary title report) in the mortgage closing process?
Answer: It discloses existing liens, encumbrances, and conditions that must be cleared before the title company will issue a policy
A title commitment outlines what the insurer will cover and what exceptions or requirements must be resolved before issuing the final policy.