Mortgage Loan Originator (MLO) Licensing Practice Test

What is a quitclaim deed?

1. A deed that guarantees clear title

2. A deed that transfers ownership without warranties

3. A deed that requires court approval

4. A deed used for gift transfers

The correct answer is: A deed that transfers ownership without warranties

A quitclaim deed is indeed a legal instrument used to transfer ownership of real property without offering any warranties or guarantees regarding the property's title. This means that the grantor, the person transferring the property, does not assure the grantee, the recipient, that they have any valid ownership or interest in the property. Instead, the grantor simply releases whatever interest they may have, if any, to the grantee. This type of deed is often used in situations where the parties know each other well, such as among family members or in divorce settlements, where the intent is to clear up ownership issues or facilitate transfers quickly without the complexities involved in other types of deeds. By not providing warranties, the quitclaim deed ensures a quicker, simpler process but also places more risk on the grantee, as they will need to verify the title independently if they desire any assurances about ownership rights. In contrast, other options describe different kinds of deeds or processes that involve assurances, requirements for court involvement, or specific types of property transfers, reflecting a misunderstanding of the quitclaim deed's unique characteristics.