Glossary of Terms (It's Not All Greek)Glossary of Terms (It's Not All Greek)


Abandonment - The surrender, relinquishment, disclaimer, or cession of property or of rights to property.

Abatement - To put an end to.

Ab Initio - From the beginning.

Ab Initio Mundi - From the beginning of the world.

Abstract - A brief summary.

Abstract of Judgment - A brief transcript of the essentials of a judgment.

Abstract of Title - A summary of the conveyances, transfers and other facts appearing of record and relied upon as evidence of title to real property.

Abutting - Touching or bordering a street, highway, or other public place.

Acceleration Clause - A clause in a note, trust deed, or mortgage advancing or hastening the date of maturity of the indebtedness or obligation upon the happening of a certain event.

Access Right - A landowner's right to have ingress to and egress from the property to a public street.

Accession - Addition to property by natural increase or growth or by installation of improvements.

Accommodation - An obligation assumed without consideration.

Accommodation Party - A person who signs a promissory note without receiving value.

Accommodation Recording - The recordation of an instrument without consideration and without assumption of responsibility for correctness or validity.

Accretion - A process by which land on a shore or riverbank increases gradually by the deposit of sand or soil upon the shore or riverbank.

Accrual - The growing or adding to.

Acknowledgment - A formal declaration before a duly authorized officer by a person who has executed an instrument that such execution is his or her act and deed.

Action - An ordinary proceeding in a court of justice by which one party prosecutes another for the enforcement or protection of a right; the redress or prevention of a wrong; or, the punishment of a public offense.

Action in Personam - An action in which judgment is sought against a person.

Action in Rem - An action in which judgment is sought against property to determine its status.

Actual Notice - Notice in fact or in reality to or by a party directly and personally.

Ad - At; to; before; near; for; of; until; within.

Ad Curiam - Before the court; to the court.

Ad Litem - During the pendency of the action or proceeding.

Ad Valorem - According to value.

Adjoining Owners - Owners of two or more parcels of real property that are contiguous to each other.

Adjudication - A judicial determination.

Administrator - Personal representative of the estate of an intestate decedent.

Administratrix - A woman administrator.

Administrator C.T.A. - An administrator with will annexed. The letters C.T.A. mean "cum testa-mento annexo" and are derived from Latin. If administration is granted but the decedent has made an incomplete will without naming executor(s) or if decedent names incapable persons or if executor(s) refuses to act, the administrator is an 'Administrator C.T.A.'

Administrator D.B.N. - Administrator of property upon which no administration has been had. The letters D.B.N. mean "de bonis non cum testamento annexo" and are derived from Latin.

Advances - Money paid before proper time of payment.

Adverse Possession - Claim of ownership of property based upon open and hostile possession and occupancy.

Affiant - A person who has made an affidavit.

Affidavit - A written declaration under oath.

Affirmation - A declaration in writing under penalty of perjury.

After-Acquired Title - Title accepted by a grantor after his or her previous conveyance.

Agency - A relationship between two or more persons whereby one is authorized to act for another.

Agreement of Sale - An agreement entered into for the sale and purchase of property.

AKA - Also Known As

Alcalde - Spanish for mayor or chief magistrate.

Alienate - To transfer title to property.

Alienation - The transfer of title to property.

Alienation Clause - Provision in a note or in a security instrument calling for automatic maturity in the event of sale or transfer of title by borrower.

Allegation - A statement of fact in a pleading yet to be proved.

All-Inclusive Deed of Trust - A deed of trust securing payment of an obligation owing under a prior deed of trust.

Aliter - Otherwise.

Alluvion - Soil deposited by the process of accretion.

A.L.T.A. - American Land Title Association.

Amortization - Repayment of a loan in equal installments of principal and interest, rather than interest only payments.

Annexation - Addition to property or to territory.

Annuity - A yearly payment of money for life or for a term of years.

Annum - Year.

Ante - Before.

Antenuptial - Before marriage.

Annual Percentage Rate (APR) – The total finance charge (interest, loan fees, points) expressed as a percentage of the loan amount.

Application Fee - Fee charged by lender to offset fixed costs related to mortgage loan processing such as appraisal, credit report, and underwriting.

Appurtenance - Anything incidental to or belonging to land considered a part of the real property.

Appurtenant - Belonging to.

Arbitrary (ARB) Map - A map made by a title company for its own convenience in identifying parcels of real property.

Assessment – The imposition of a tax, charge or levy, usually according to established rates.

Assessor – A public official who evaluates property for the purpose of taxation.

Assumption of Mortgage – A buyer's agreement to assume the liability under an existing note that is secured by a mortgage or deed of trust.The lender must approve the buyer in order to release the original borrower (usually the seller) from liability.

Attestation Clause - The clause in a deed denoting the subscribing persons are witnesses.

Attorn - To accept and acknowledge a new landlord.


Balloon Payment - Final installment payment of a promissory note larger than any single preceding installment payment.

Bankruptcy - A proceeding in U.S. Bankruptcy Court wherein assets of a debtor (unable or unwilling to pay debts) are applied by an officer of the court in satisfaction of creditor claims.

Base Lines - Imaginary east-west lines that intersect meridians to form a starting point for measurement of land.

Bench Mark - Location indicated on a durable marker by a land surveyor.

Beneficiary - One for whose benefit a trust is created. A lender secured by a deed of trust.

Beneficiary's Demand - Payment required by a beneficiary under a deed of trust before authorizing reconveyance.

Beneficiary's Statement - Statement of a beneficiary under a deed of trust as to principal balance due on a promissory note and other information concerning the loan.

Benevolent Associations - Voluntary non-profit aggregations organized for the benefit of members.

Betterment - Substantial improvement to real property.

Bequeath - To give personal property by will.

Binder - Written agreement to issue, within a specified time, a policy of title insurance. Contract to insure.

Blanket Mortgage or Deed of Trust - A mortgage or deed of trust on more than one lot or parcel.

Blue Sky Law - A law (generally of a state) protecting the public from investing in fraudulent companies. Usually requires full disclosure of risks associated with investment before the investment entity puts investor's monies at risk.

Bona Fide - In good faith.

Bona Fide Purchaser - A purchaser in good faith, for fair value and without notice of any adverse claim or right of third parties.

Bond - A written undertaking to pay a certain sum of money.

Bonded Debt - An indebtedness secured by a bond issue.

Building Contract - Agreement for the construction of a proposed structure.

Building Lines - Lines established by ordinance or by statute beyond which building is not permitted.

By-Law - A rule adopted for the internal government of a corporation or unincorporated association.


Cap – The limit on how much an interest rate or monthly payment can change, either at each adjustment or over the life of the mortgage.

CC&R's (Covenants, Conditions and Restrictions) – A document that controls the use, requirements and restrictions of a property.

Certificate of Reasonable Value (CRV) - A document that establishes the maximum value and loan amount for a VA guaranteed mortgage.

Chain of Title – A term applied to the past series of transactions and documents affecting the title to a particular parcel of land.

Closing Fee - The fee charged by the closing agent who prepares the closing documents and closes the loan on behalf of the lender.

Closing Statement – The financial disclosure statement that accounts for all of the funds received and expected at the closing, including deposits for taxes, hazard insurance and mortgage insurance.

Commitment Fee - This is often called an origination fee and is generally computed at 1% of the mortgage amount.

C.C. - Civil Code.

CC&Rs - Covenants, Conditions & Restrictions -- detailed limitations applying to the use or enjoyment of real property.

C.C.P. - Code of Civil Procedure.

c.t.a. - With will annexed.

Capita - Heads; persons.

Caption - The heading of a title or document.

Cause - An action or a suit.

Caveat - Let him/her beware.

Caveat Emptor - Let the buyer beware.

Certificate of Sale - Evidence of a purchaser's acquisition of legal title at a judicial sale, subject to redemption rights, if any.

Certificate of Title - Certified statement as to land ownership based upon examination of record title.

Certiorari - A writ from a higher court to a lower court directing the forwarding of a certified record of a proceeding up for review.

Cestui Que Trust - The person for whose benefit property is held in trust.

Cestui Que Use - The person for whose use land was granted to another.

Cestui Que Vie - The person for the duration of whose lifetime an estate has been granted.

Chain of Title - A chronological list of documents comprising the record history of title to a specific parcel of real property.

Change of Venue - The removal of a cause for trial from one county to another.

Charter City - Generally, a city organized under a charter.

Chattel - An item or article of personal property.

Chattel Mortgage - Obsolete name for mortgage of personal property.

Chattel Real - An interest in real estate which is of a lesser degree than a freehold estate. For example, an estate at sufferance.

Chose in Action - A personal right not reduced to possession but recoverable by an action at law.

Civil Law - Law of the Roman Empire , it is distinguished from the Common Law of England.

Class Action - A lawsuit in which plaintiff represents himself or herself and all other persons similarly situated.

Clearing House - An office where bankers daily settle the balance of their accounts with each other.

Cloud on Title - A semblance or claim of title that is in fact invalid.

Co-Administrator - One of two or more administrators.

Code - A collection of laws.

Codicil - A testamentary disposition subsequent to a will altering, explaining, adding to, subtracting from, or confirming it, but not revoking it.

Co-Executor - One of two or more executors.

Co-Insurance - Insurance issued by two or more insurers.

Collateral - Property pledged as security for a debt; also, indirect, when referenced to blood relationship as in 'collateral heirs'.

Collateral Assignment - Transfer of an interest in personal property for security purposes. A collateral assignment is distinguished from an absolute assignment mainly because once the debt is paid that was secured by the collateral assignment, the assignment is extinguished.

Color of Title - That giving the appearance of title.

Commercial Acre - The portion of an acre of subdivided land remaining after deducting areas devoted to streets, sidewalks, etc.

Commissioner's Deed - Deed executed by a court appointed person in consummation of a sale ordered by the court.

Commitment - A pledge, promise, or firm agreement; also, a title insurer's contractual obligation to insure title to real property.

Common Law - The unwritten body of English law founded upon customs and precedents.

Community Property - Property acquired by a husband and wife, or either, during marriage, when not acquired as the separate property of either.

Competent - Legally qualified, capable of contracting.

Composition - Agreement between a debtor and creditors whereby the latter mutually agree to accept a certain percentage less than are due each one.

Conclusive Presumption - Legal inference that cannot be contradicted.

Condemnation - The taking of private property for a public use. The exercise of power of eminent domain.

Condemnation Guarantee - An evidence of title issued to a governmental agency naming persons to be made defendants in an action in eminent domain.

Condition - A qualification or restriction annexed to a conveyance of lands, whereby it is provided that upon the happening of a particular event an estate shall commence, be enlarged, or be defeated.

Condition Precedent - A condition that must be fulfilled before a right accrues or an estate vests.

Condition Subsequent - A condition that defeats a previously accrued right or vested estate.

Conditional Sale Contract - Contract of sale where title remains in seller until all conditions of the contract have been fulfilled.

Condominium - The composite of individual ownership and exclusive possession of a cube of space in a multi-unit building plus a collective ownership of and a collective right of possession to facilities common to all separately owned units.

Confession of Judgment - Entry of judgment without formality of proceedings upon debtor's admission and with debtor's consent.

Confirmation of Sale - Court approval of sale by a personal representative, guardian, or conservator.

Congressional Grant - A grant of public land of the United States by an act of Congress.

Conservatee - A person unable to manage self, property, or self and property and for whom the probate court has appointed a conservator.

Conservator - A person appointed by probate court to take care of the person, property, or person and property of conservatee.

Consideration - The value inducing another person to enter into a contract.

Constituent Corporation - A corporation merged or consolidated with one or more other corporations.

Constructive - Inferred or implied.

Constructive Notice - Notice given by public records.

Constructive Trust - Trust imposed by law to redress a wrong or to prevent unjust enrichment.

Contiguous - In actual close contact; touching, adjacent, near.

Contingent - Dependent upon an uncertain future event.

Contingent Beneficiary - A person who may share in an estate or trust depending upon the happening of an event.

Contingent Interest - An interest which may vest depending upon the happening of an event.

Contour - Surface configuration of land.

Contract - An agreement between two or more parties to do, or not to do a particular act.

Contract of Sale - An agreement entered into for the sale and purchase of property.

Convey - To transfer title to property from one person to another.

Conveyance - A written instrument transferring title to or an interest in land.

Corporate Seal - A seal attached to an instrument executed by a corporation.

Corporation - An artificial being created by law and endowed with certain rights, privileges, and duties of natural persons.

Corporation Sole - A corporation consisting of a single person and his/her successor in office.

Corporeal Hereditaments - Substantial permanent objects which may be inherited.

Corp. Code - Corporations Code.

Corpus - Property comprising the assets of a trust.

Co tenancy - Ownership by two or more persons.

Co-Trustee - One of two or more trustees.

Courses and Distances - Description of land by metes and bounds.

Covenant - Agreement or promise.

Courtesy - The common law interest of a husband in estate of deceased wife.

Custodia Legis - In the custody of the law.


Date Down - The date a title examination is to be brought down to from the date of the last examination. Generally the date of recording of instruments and documents in the Recorder's Office.

d.b.n. - Abbreviation for de bonis non, See: Administrator D.B.N.

d.d. - Abbreviation for "days after date."

D.S. - Abbreviation for "declaratory statement."

De - From; of; concerning.

Decedent - Deceased person.

Declaration of Homestead - A formal, written, recorded assertion by an owner that the dwelling in which he or she resides is exempt from forced sale.

Declaration of Trust - A written instrument by a person (settlor-trustor), acknowledging that he or she holds title to property (as trustee) for the benefit of another or others (beneficiary/ beneficiaries).

Decree - A judgment by court.

Decree of Distribution - A judgment of probate court as to persons entitled to the property of a decedent. [Now referred to as 'Order for Distribution']

Dedication - Donation of land by owner for public use.

Deed - Written document transferring title to land from one person to another.

Deed In Lieu of Foreclosure - The deed purchased by the mortgagee from the mortgagor in lieu of the foreclosure of the mortgagee's mortgage. The mortgagor grants the title to the property secured by the mortgage to the mortgagee (lender) in lieu of lender foreclosing the mortgage.

Deed of Sale - Evidence of a purchaser's acquisition of legal title at a judicial sale, subject to redemption rights, if any.

Deed of Trust - A three party security instrument conveying title to land as security for the performance of an obligation. Also called "trust deed."

De Facto - In fact.

Default - Omission or failure to fulfill a duty, observe a promise, discharge an obligation, or perform an agreement.

Default Judgment - A judgment against a defendant who made no appearance in court.

Defeasance Clause - The provision of a mortgage giving the mortgagor the right to redeem the property upon satisfaction of the obligation it secures.

Defeasible - Subject to being defeated, annulled, revoked.

Deficiency Judgment - A personal judgment against the debtor for the amount remaining due after foreclosure of a security device, as in the case of a mortgage or trust deed.

Defunct - Deceased, dead.

De jure - By right.

Demand - An escrow term describing the consideration exacted for a conveyance or for the relinquishment of an interest in or a right to property.

Demise - A transfer of an estate for years, for life, or at will.

Demurrer - The formal mode of disputing the sufficiency in law of an opponent's pleading.

Deponent - A witness; an affiant.

Depository Statement - Instructions accompanying the deposit of documents, instruments, or property.

Deposition - Testimony of a witness taken upon interrogatories, not in open court.

Deraign - To trace, to prove.

Descent - Manner of succession to title to property of an intestate decedent.

Description - Written instrument by which title to land is transferred to a trustee as security for repayment of a debt or performance of an obligation.

Devise - The disposition of land by will.

Devisee - A person to whom real property is given by will.

Dictum - An opinion by a judge on a point not essential to the decision on the main issue. (Plural form is "dicta.")

Dies - A day.

Diluvian - The gradual washing away and loss of soil along the banks of a river.

Discount Points - Each point is equal to 1% of the mortgage amount. Points are used by the lender to adjust the yield on the mortgage when it is sold to an investor. By paying more points, the borrower can obtain a lower mortgage interest rate.

Disseisin - Dispossession; ouster.

Divest - To deprive of a right or title to property.

Divisa - A boundary.

Documentary Transfer Tax - A tax on certain recorded transfers of title to real property.

Domicile - Fixed and permanent home.

Domiciliary Administrator - Administrator of estate of a decedent appointed by probate court of the state of decedent's domicile.

Dominant Tenement - The land benefited by an appurtenant easement.

Dona - Gift.

Donee - Person to whom gift is made.

Donor - Person who makes a gift.

Dower - The common law interest of a wife in estate of deceased husband.

Dragnet Clause - Provision in a security instrument making the security instrument applicable to all past and present obligations between debtor and creditor.

Due-on-Sale Clause - Provision in a security instrument calling for automatic maturity in the event of sale or transfer of title by borrower.


Earnest Money - Something given as a part of the purchase price to bind a bargain.

Easement - A limited right or interest in the land of another entitling the holder to some use, privilege, or benefit.

Easement Appurtenant - An easement created for the benefit of and attaching to a parcel of land.

Easement in Gross - An easement created for the benefit of a person rather than for a parcel of land.

Ejectment - Legal action for return of right to possession of land and for damages.

Eleemosynary - Charitable.

Eminent Domain - The right to take private property for public use.

Emptor - A buyer.

Encroachment - The extension of an improvement onto land of another.

Encumbrance - A right or interest in land decreasing its value but not hindering its sale or transfer.

Endorsement - The act of signing a name on the back of a check or promissory note to evidence its transfer; also, a written document attached to an insurance policy expanding or limiting coverage.

Enfeoff - To vest a person with fee title to land.

Entirety - A form of cotenancy in which owners are jointly seized of the whole.

Equitable Lien - A lien recognized in a court of equity.

Equitable Title - The right to acquire legal title.

Equity - Natural right or justice based upon ethics and morals.

Equity in Property - The value of a person's interest in property over and above total liens and charges.

Equity of Redemption - The right to redeem property after a judicial sale.

Erosion - The gradual eating away of soil by natural forces.

Escalator Clause - Provision for upward or downward adjustment of costs, expenses, rents, etc.

Escheat - A forfeiture of title to the state.

Escrow - A transaction in which an impartial third party acts upon instructions for both seller and buyer, or for both borrower and lender, in carrying out instructions, delivering papers and documents and, disbursing funds.

Estate - The degree, quantity, nature, and extent of a person's interest in real property.

Estate at Will - Possessory right of a tenant for an indefinite period terminable by either landlord or tenant upon notice.

Estate for Life - Estate measured in time by the uncertain duration of a person's lifetime.

Estate for Years - Estate measured for a certain, definite, or fixed period of time.

Estate of Inheritance - An estate extending beyond the owner's lifetime which is succeeded to by heirs or by devisees.

Estate Tax - A tax upon the privilege of transmitting title to property of a decedent.

Estoppel - A bar to the assertion of a right or a defense in consequence of previous position, act, or representation.

et Al. - And others.

et Con. - And husband.

et Seq. - And following.

et Ux. - And wife.

Ex Parte - A judicial proceeding, order, injunction is said to be ex parte when it is taken or granted at the request and for the benefit of one party only, and without notice to any person.

Ex Post Facto - After the event.

Examination - The process of determining the vesting of title, and encumbrances burdening land.

Examiner - A person who analyzes a chain of title to land and expresses an opinion thereon.

Exception - A deduction, subtraction, or exclusion.

Exculpatory Clause - Provision designed to absolve a party from liability.

Execution Proceedings - Judicial enforcement of a money judgment consummating in seizure and sale of debtor's property.

Executor - A male representative of the estate of a testate decedent.

Executory - An agreement or contract not yet performed.

Executrix - A female representative of the estate of a testate decedent.

Exemption - Immunity from a burden or obligation.

Expediente - Spanish or Mexican land grant file.

Extension Agreement - Agreement granting additional time for performance.


Facsimile - An exact and precise copy.

False Personation - Assuming, without authority, the identity of another person for fraudulent purposes.

Federal National Mortgage Association (FNMA) – Popularly known as Fannie Mae, a privately owned corporation created by Congress to support the secondary mortgage market. It purchases and sells residential mortgages insured by FHA or guaranteed by the VA, as well as conventional home mortgages.

Fee - An estate of inheritance in real property.

Fee Simple - Absolute ownership; a fee without limitation.

Fee Simple Absolute - The largest recognized estate in land; a title without limitation or end.

Fee Simple Defeasible - A fee simple estate subject to being defeated, annulled, or revoked.

Feme Sole - An unmarried woman.

Feme Covert - A married woman.

FHA loan – A loan insured by the Insuring Office of the Department of Housing and Urban Development; the Federal Housing Administration. Finance charge – The total cost a borrower must pay, directly or indirectly, to obtain credit according to Regulation Z.

Fictitious - False, feigned, pretended.

Fictitious Deed of Trust - A recorded deed of trust containing general terms and provisions but naming no parties and describing no property; it is used for reference only.

Fictitious Name - A name adopted for business purposes other than the true name of owner.

Fiduciary - One who holds a position of trust and confidence requiring scrupulous good faith and candor. For example, a trustee of a trust is a fiduciary.

Final Decree - A judicial decision finally disposing of a matter or cause.

Financing Statement - A personal property security instrument replacing a chattel mortgage upon adoption of Uniform Commercial Code.

Fissionable Material - Material capable of division into parts.

Fixture - Property originally personal in character but intended to be a part of the real property to which affixed.

Foreclosure - Enforcement of a lien by sale of property given as security.

Foreclosure Sale - The sale of property given as security to secure performance of an obligation.

Forfeiture - The loss of a right, title, or interest in property as consequence of a default under an obligation.

Franchise - A special privilege conferred by government or, a contractual right to engage in a business under trade name owned by another.

Freehold - An estate in land of uncertain duration. For example, a fee simple absolute or a life estate.

Funding Fees - Normally applicable on VA loans only, equal to 1% of the loan amount. The fee is due at closing or may be added to the loan amount and financed.

Future Advance Clause - Provision for lender's future disbursements to be also secured by a security instrument previously executed.

Future Interest - An estate in real property entitling owner to possession and enjoyment on a future date. For example, a remainder is a future interest.


Garnishment - Attachment of personal property of a debtor in the possession of a third person.

General Index - A title company's record of matters affecting title to land maintained according to names of individuals and entities rather than by real property description.

General Law City - Generally, a city organized under the general law. (Compare " Charter City ," supra.)

General Plan Restrictions - Restrictions on use of real property imposed for the benefit of all lots within a subdivision.

Gift - A voluntary conveyance or transfer of property without a valuable consideration.

Gore - A small triangular piece of land.

Gov. Code - Government Code.

Graduated Lease - A lease providing for varying rental rates.

Graduated payment mortgage – A residential mortgage with monthly payments that start at a low level and increase at a predetermined time. Grantee – A person who acquires an interest in land by deed, grant, or other written instrument.

Grant - A transfer of real property by deed.

Grant Deed - A written instrument transferring title to real property.

Grantee - The person acquiring title to real property by a deed.

Grantor - The person transferring title to real property by a deed.

GRI (Graduate Realtors Institute) – A professional designation granted to a member of the National Association of Realtors® who has successfully completed three courses covering law, finance and principles of real estate.

Groin - A structure intended to impede or resist movements of sand adjacent to seas or lakes.

Ground Lease - A lease of land only and not of improvements to be made by lessee.

Ground Rent - Earnings of improved property credited to land separate from its improvements.

Guarantee of Title - A form of title insurance based solely upon public record disclosures.

Guardian - A person appointed by the probate court to care for the person, the property, or the person and property of a minor or an incompetent person.


Home Inspection Report – A qualified inspector's report on a property's overall condition. The report usually includes an evaluation of both the structure and mechanical systems.

Homeowner's Insurance - One year premium is due in advance at time of closing.

Homestead - The dwelling in which an owner or head of a family resides protected to a limited extent from forced sale by a recorded declaration of homestead.

Home warranty plan – Protection against failure of mechanical systems within the property.

HUD 1 – A form settlement (closing) statement required by the U.S. Department of Housing and Urban Development (HUD) where federally related mortgages are being made on residential properties. It is a balance sheet showing the source of funds and the distribution of funds in connection with the purchase and/or mortgaging of residential property.


Improvements – Those additions to raw lands tending to increase value, such as buildings, streets, sewer, etc.

Indemnify – To make payment for a loss.

Index – A measure of interest rate changes used to determine changes in an ARM's interest rate over the term of the loan.

Ingress – The right to enter a tract of land. Often used interchangeably with 'access.'


Joinder - One or more person acting in unison joining together.

Joint Protection Policy - A policy insuring more than one interest. I.E., the interest of both owner and lender.

Joint Tenancy - A form of co-ownership by two or more persons in equal shares characterized by the incident of survivorship.

Joint Venture - A form of business organization composed of two or more persons to conduct a single enterprise for profit.

Judgment - A final determination in a court of competent jurisdiction of the rights of the parties to an action or proceeding.

Judgment Lien - A statutory lien created by recording a judgment, or an abstract, ordering the payment of a sum of money.

Junior Lien - A lien of inferior priority.


Lender's Policy – A form of title insurance policy, which insures the validity, enforceability, and priority of a lender's lien. This form does not provide protection for the owner.

Lien – A legal hold or claim on a property as security for a debt or charge.

Loan Commitment – A written promise to make a loan for a specified amount on specified terms.

Loan-to-Value ratio – The relationship between the amount of the mortgage and the appraised value of the property, expressed as a percentage of the appraised value.

Lot – A part of a subdivision or block having fixed boundaries ascertainable by reference to a plat or survey.


Margin – The number of percentage points the lender adds to the index rate to calculate the ARM interest rate at each adjustment.

Mechanic's Lien – A lien allowed by statute to contractors, laborers and material suppliers on buildings or other structures upon which work has been performed or materials supplied.

Metes and Bounds – A description of land by courses and distances.

Mortgage - A two party security instrument pledging land as security for the performance of an obligation.

Mortgagee - The party entitled to performance by a mortgagor.

Mortgagor - The party executing a mortgage

Mortgage Insurance - Insurance required by the lender when the down payment is less than 20%. In the case of loan default, this insurance reduces the lender's loss.

Mortgage Life Insurance – A type of term life insurance often bought by mortgagors. The coverage decreases as the mortgage balance declines. If the borrower dies while the policy is in force, the debt is automatically covered by insurance proceeds.


Negative Amortization – Negative amortization occurs when monthly payments fail to cover the interest cost. The interest that is not covered is added to the unpaid balance, which means that even after several payments, you could owe more that you did at the beginning of the loan Negative amortizations can occur when an ARM has a payment cap that results in monthly payments that are not high enough to cover the interest.

Note – The instrument evidencing the indebtedness secured by a security instrument such as a mortgage or deed of trust.

Notice of Cessation - A recorded notice shortening the time for filing mechanics' liens if work ceases prior to completion.

Notice of Completion - A notice recorded within ten days of completion of a work of improvement signaling commencement of the time period within which claims of mechanics' liens must be recorded.

Notice of Default - A recorded notice of a trustor's failure to perform his/her obligation under a deed of trust. The beginning step in nonjudi-cial foreclosure of a deed of trust.

Notice of Non-Responsibility - A recorded notice by an owner of real property that he/she will not be responsible for payment of costs of improvements contracted for thereon by some other person.

Notice to Quit - Notice given by landlord to a tenant to pay rent within three days or vacate premises.

Novation - The substitution of a new obligation for an old one.

Nuncupative Will - An oral will.

Nunc Pro Tune - Now for then; a tardy act made retroactive to the time when the act should have been done.


Origination Fee – A fee or charge for work involved in evaluation, preparing and submitting a proposed mortgage loan. The fee is limited to 1% for FHA and VA loans.

Open-End Mortgage - Provision in a mortgage (or deed of trust) by which additional advances of money made by lender to borrower after execution of the security instrument are also secured by it.

Ownership – The right to possess and use property to the exclusion of others.


PITI – Principal, interest, taxes and insurance

Planned Unit Development (PUD) – A zoning designation for property developed at the same or slightly greater overall density than conventional development, sometimes with improvements clustered between open, common areas. Uses may be residential, commercial or industrial.

Point – An amount equal to 1% of the principal amount of the investment note. The lender assesses loan discount points at closing to increase the yield on the mortgage to a position competitive with other types of investments.

Policy – A written contact of title insurance.

Power of Attorney – An instrument authorizing another to act on one's behalf as his or her agent or attorney.

Power of Sale – A clause in a will, mortgage, deed of trust or trust agreement authorizing the sale or transfer of land in accordance with the term of the clause.

Pre-payables - Adjustment to escrow accounts from the date of closing to the date of the first payment. Interest is paid through the end of the month of closing, taxes are paid through the end of the month of closing plus the following month. Two months of PMI (Principle Mortgage and Interest) are collected. Two months of homeowner's insurance may be collected. A homeowner's insurance policy must be provided along with a receipt showing that the first year's premium is paid.

Prepayment Penalty – A fee charges to a mortgagor who pays a loan before it is due. This is not allowed for FHA or VA loans.

Private Mortgage Insurance (PMI) – Insurance written by a private company protecting the lender against loss if the borrower defaults on the mortgage.

Processing Fee - Fees charged by the escrow processor, either working for the escrow company, title company, or real estate company, for administrative escrow services performed from the point of contract through closing.

Purchase Contract – A written document in which the purchaser agrees to buy certain real estate and the seller agrees to sell under stated term and conditions. Also called a sales contract or sales agreement, earnest / nest money contract or agreement for sale.


Quiet Title Action - The name of an action brought to establish a title to property or to remove a cloud on the title.

Quitclaim Deed - A form of deed containing no warranties and conveying the current right, title and interest of the grantor, if any, to real property.


Real Property – Land, together with fixtures, improvements and appurtenances.

Realtor® - A real estate broker or associate active I a local real estate board affiliated with the National Association of Realtors®.

Reconveyance - A document extinguishing the lien of a deed of trust and reconveying the title to the real property encumbered by the deed of trust to the trustor.

Recording Fees - Fees charged by state or municipal entities for entering the closing documents into the public record.

Regulation Z – The set of rules governing consumer lending issued by the Federal Reserve Board of Governors in accordance with the Consumer Protection Act.

Right-of-Way – The right which one has to pass across the lands of another. An easement.


Set Back Lines – Those lines which delineate the required distances for the location of structures in relation to the perimeter of the property.

Severalty Ownership - Ownership of property by one person sole ownership.

Sublease - A lease executed by a tenant for a term less than the leasehold.

Subordinate - To make inferior in priority.

Subordination Agreement - An agreement changing the priority of interests.

Survey – The process of measuring land to determine its size, location and physical description and the resulting drawing or map.

Survey Fee - Is usually required and is used by the lender to check for encroachments from within or from outside the subject property.


Takeout Loan - A long term loan replacing a short term interim construction loan.

Tax Deed - A deed issued to a purchaser following a sale necessitated by the non-payment of real property taxes.

Tax Sale - Sale conducted for the purpose of collecting delinquent taxes assessed to a parcel of real property.

Tenancy in Common – A type of joint ownership of property by two or more persons with no right of survivorship.

Title – The evidence of right which a person has to the ownership and possession of land. Commonly considered as a history of rights.

Title Insurance - Provides protection for lenders and homeowners against financial loss resulting from legal defects in the title.

Title Search - The assembled links required to complete a chain of title to a parcel of real property.

Tract – A particular parcel of land.

Transfer Tax - A tax imposed upon transfers of title to real property.

Trust - A fiduciary relationship in which a trustee holds title to property for the benefit of a beneficiary.

Trust Deed - Same as a deed of trust; a three party security instrument conveying title to land as security for the performance of an obligation.

Trustee - The fiduciary holding title to property for the benefit of another.

Trustee's Deed - The deed given by the trustee under a deed of trust when the secured property is sold under power of sale.

Trustee's Sale - Foreclosure sale conducted by the trustee in the exercise of a power of sale.

Trustor - The person conveying property in trust.


Underwriting Fee - Usually included in the application fee. However, practices vary from lender

Undivided Interests - Unsegregated interests of co-owners in the entire property owned by them as tenants in common.

UCC - Uniform Commercial Code. (Com. Code, Section 1101 et seq.)

Unities - The essential elements of a common law joint tenancy. i.e., unities of time, title, interest, and possession.


VA loan – A loan that is partially guaranteed by the Veterans Administration and made by a private lender.

Variable Rate Mortgage – A loan in which the interest rate fluctuates with the cost of funds or some other index.

Vendor – A seller of real property under land contract.

Vest – To pass to a person an immediate right or interest.

Vestee – A non-legal term used by title insurers to indicate the owner of real property in a policy or report.


Warranty – A promise by the grantor of real property that he or she is the owner and will be responsible to the buyer if title is other than represented.

Will – A written document providing for the distribution of property owned by a person after his or her death.

Wrap-Around Mortgage - Same as an "all inclusive mortgage": One incorporating the balance due under a prior mortgage.


Zone - Area in a community designated for specified use and purpose.

Zoning - Governmental regulation of the use of real property.