Housing and Community Development (HCD) Practice Exam

What action must the department take upon receipt of a "Notice of Escrow Opening"?

1. Issue a Certificate of Title immediately

2. Impose a moratorium on title record amendments

3. Notify the seller of the escrow opening

4. Cancel the existing title

The correct answer is: Impose a moratorium on title record amendments

The correct action upon receipt of a "Notice of Escrow Opening" is to impose a moratorium on title record amendments. This is a critical step in the process because the opening of an escrow signifies that a transaction involving property or assets is in progress, and any changes to title records could complicate or jeopardize the transaction. By imposing a moratorium, the department ensures that no alterations are made that could affect the title during this sensitive period. This action helps maintain the integrity of the transaction while the necessary steps are taken to finalize the sale or transfer of property. It prevents potential conflicts, errors, or disputes that could arise from simultaneous changes to title records. The other options would not be appropriate actions in this context. For example, issuing a Certificate of Title immediately would not be feasible, as the transaction is not yet finalized. Notifying the seller of the escrow opening may be necessary but is not the department's primary responsibility following the notice. Similarly, canceling the existing title would be inappropriate without further review and completion of the escrow process. Thus, imposing a moratorium is the appropriate response to ensure the transaction proceeds smoothly.