Where this fits on the exam
| Official syllabus topic | Finance and Closing: Closing Procedures |
|---|---|
| Official PSI group | Finance and Closing |
| Published group count | 15 of the 52 Georgia questions |
| Exam portion | Georgia salesperson supplement |
| Source edition | PSI Georgia Candidate Information Bulletin dated July 1, 2026 |
The Rule
PSI publishes 16, 21, and 15 items for the three Georgia groups. It does not publish a guaranteed subtopic count. The statute, current GREC rule, contract, or other cited primary authority controls each lesson.
The lesson
Title examination
The closing lawyer examines the chain and relevant records, identifies exceptions, and determines what releases, affidavits, probate steps, or other cures are needed.
Marketable title
A contract may require title free from reasonable doubt and unacceptable encumbrances, not absolute proof that no conceivable claim exists.
Lender policy
The lender's policy insures the lender's security interest up to policy terms. It does not protect the buyer's equity merely because the buyer paid a premium at closing.
Owner policy
The owner's policy covers the owner's insured interest against covered pre-policy defects, subject to exclusions, exceptions, conditions, and policy amount.
Decision rule
Georgia rule and national contrast
Worked Georgia example
Scenario. A buyer assumes the lender's title policy also protects the buyer from an undisclosed pre-closing lien.
Reason it through. The lender policy protects the lender's insured mortgage interest. The buyer needs an owner's policy for the owner's separate insured interest, subject to its terms.
Answer. The lender's policy alone does not provide the buyer with owner coverage.
Common exam traps
- Treating insurance as a cure
- Confusing lender and owner policies
- Promising absolute title
- Ignoring policy exceptions
Original practice questions with detailed explanations
These are original instructional questions mapped to the July 1, 2026 PSI outline. They are not copied from PSI or a live examination. Choose an answer before opening the explanation.
Question 1At a Georgia closing, the buyer pays the premium for the lender's title policy but declines an owner's policy. A year later, a pre-closing lien surfaces. Whose interest does the existing policy protect?
- A. The buyer's, because the buyer paid the premium at closing
- B. The lender's, up to the policy terms, not the buyer's equity
- C. Both parties equally, because one policy covers the property
- D. Neither party's, because the lien surfaced after closing
Show answer and explanation →
Answer: B. The lender's, up to the policy terms, not the buyer's equity
A lender's policy insures the lender's security interest, no matter who paid the premium. The buyer's own interest needs an owner's policy, subject to its terms and exceptions. The premium answer looks plausible, but paying for a policy does not make the buyer the insured.
- A. Incorrect. The buyer's payment of the premium does not make the buyer the insured under a lender's policy.
- B. Correct. The lender's policy protects the lender's security interest subject to its coverage terms and exceptions.
- C. Incorrect. A lender's policy does not equally insure the owner's equity.
- D. Incorrect. A defect surfacing later may relate to a covered pre-policy event; discovery date alone does not defeat coverage.
Question 2A sales contract requires the seller to deliver marketable title. Which description matches that standard?
- A. Title that no one could challenge under any conceivable claim
- B. Title shown as vested in the seller on the county tax records
- C. Title that is insured, whatever exceptions the policy lists
- D. Title a reasonable buyer would accept without serious doubt
Show answer and explanation →
Answer: D. Title a reasonable buyer would accept without serious doubt
Marketable title is title a reasonable purchaser can accept without serious doubt or a real risk of litigation. It does not require proof that no conceivable claim exists. The absolute-title answer can mislead candidates who equate marketable with perfect.
- A. Incorrect. Marketability does not require eliminating every imaginable claim.
- B. Incorrect. County tax records do not establish that legal title is free from serious doubt.
- C. Incorrect. Insurance can contain exceptions and does not automatically satisfy the contract's marketable-title requirement.
- D. Correct. Marketable title is reasonably acceptable without serious doubt or a substantial litigation risk.
Question 3A title search finds an unreleased judgment lien against the seller. The buyer's agent says the owner's policy will take care of it. What is the better view?
- A. The attorney must arrange a release; insurance does not erase it
- B. The owner's policy removes the lien from the record at closing
- C. The buyer's agent may negotiate a release and record it
- D. The lien can be ignored because it is the seller's personal debt
Show answer and explanation →
Answer: A. The attorney must arrange a release; insurance does not erase it
Title insurance pays covered losses; it does not cure a defect or replace the attorney's title examination. The closing attorney decides what payoff, release, or other cure the lien needs before closing. The idea that the policy removes the lien is the insurance-as-cure trap.
- A. Correct. The attorney must assess and arrange the required cure; insurance does not delete the lien.
- B. Incorrect. Issuing an owner's policy does not remove the judgment lien from county records.
- C. Incorrect. The agent should coordinate with the attorney rather than assume the attorney's legal release role.
- D. Incorrect. A judgment lien against the seller can encumber the property and cannot be dismissed as irrelevant personal debt.
Ready to move on?
You are ready for the next lesson when all of these are true.
- Distinguish a title examination from a title insurance policy.
- Explain why a lender policy does not protect the buyer's equity.
- Check whose interest is insured and what exceptions the policy lists.
- Answer the practice questions without looking back, then explain why the other choices fail.
- Explain the worked example in your own words and identify the fact that decides the answer.
- Retest this topic on another day in a mixed question set.
Recommended next lesson
Continue with Promissory Note, Security Deed, Satisfaction, and Cancellation. Title work often turns up the seller's existing security deed, and the next lesson explains what that deed conveys in Georgia and why paying off the note does not clear the record until a cancellation is recorded.
Return to the Finance and Closing hub for the complete official branch and the full lesson list for this Georgia group.