General Mortgage Knowledge · 20% of the SAFE examhard
Correct answer: The gap creates a cloud on the title that the title company will likely require be cured — through legal action or corrective documentation — before issuing a clean title policy
A gap in the chain of title — caused by an unrecorded deed or missing conveyance document — creates a 'cloud on the title' because clear, unbroken ownership from one party to the next cannot be established through the public record. Title companies will typically identify this as a title defect requiring curative action before they will issue a clean title insurance commitment. Curative action may include filing a quiet title action, obtaining affidavits, locating the missing parties to execute a new deed, or other legal remedies. Gaps are not treated as minor clerical issues that are routinely 'insured over.' An unrecorded deed does not automatically vest title in the county. There is no 90-day federal delay requirement for such situations.
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