Alabama Title Insurance Practice Test

The correct response highlights that recording fees for deeds and mortgages are legitimate and necessary expenses associated with real estate transactions, and thus are not considered a false statement in the context of mortgage fraud. These fees are standard, documented costs that accompany the legal processes of recording ownership and securing financial interest in a property.

In contrast, the other options involve deceptive practices or misrepresentations that can occur during real estate transactions. Bogus checks to sellers and falsified seller credits or POC (Paid Outside of Closing) items involve creating false financial documents or representations that mislead parties involved in the transaction. Payoffs of unrecorded mortgages may also involve dishonesty, especially when a seller claims to have paid off a mortgage that hasn't been officially documented, effectively hiding debts.

Recording fees are transparent costs that are essential for ensuring that all legal and financial interests in a property are properly filed and recognized by the county or municipality, making them a legitimate component of the Closing Disclosure. This distinction is important in understanding what constitutes mortgage fraud and the integrity of real estate transactions.