Concepts Definitions
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- Policy of Title Insurance: A contract that indemnifies (protects against financial losses) a designated party (owner and/or lender) from losses or damages related to defects in the title of a property that existed prior to the policy’s issuance. It guarantees clear ownership. nnnn
- Warranty Deed: A legal instrument by which the seller guarantees that they are the true and rightful owner of the property and are selling or transferring it free of any liens. nnnn
- Abstract of Title: A summation of all recorded transfers, conveyances, legal proceedings, and any other facts relied on as evidence of title to show ownership continuity and signify any possible loss to title. nnnn
- Trust Deed (Deed of Trust): A security instrument used in California for most residential mortgage transactions, involving three parties (trustor/borrower, beneficiary/lender, and trustee/neutral third party), which permits the lender to initiate foreclosure if the borrower defaults on monthly payments. n