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Abstract-
A history of all transactions shown in the public records affecting a
particular tract of land.
Abstract Plant- See Title Plant.
Adjustable Rate Mortgage (ARM)- Mortgage loans under which the
interest rate is periodically adjusted, in accordance with some market
indicator, to more closely coincide with the current rates. The extent and
number of these adjustments are agreed to at the inception of the loan.
Adverse Possession- The possession, by one person, of land belonging
to another in a manner deemed adverse to the interest of the owner. In most
states, by operation of law, title to the land becomes vested in such person
after a fixed number of years if the owner fails to assert his or her
rights.
Affidavit- A written statement made under oath before a notary public
or other judicial officer.
Agreement- A legally binding contract made between two or more
persons.
ALTA (American Land Title Association)- The trade association of the
title insurance industry, which has adopted certain insurance policy forms
to standardize coverage on a national basis.
Amortization- Payment to reduce the principal of a debt in regular,
periodic installments.
Appraisal- A report from an independent third party detailing the
estimated value of real estate.
Appurtenance- A right or privilege that is a part of the ownership of
property, such as a right of way to a highway across the land of another.
Water rights are also an example.
Assessment- (1) The valuation of real estate for purpose of taxes or
special improvement charges. (2) The amount of taxes or special improvement
charges. Special improvement charges are usually for the costs of streets,
sidewalks, sewers, etc.
Assignment- (1) The act of transferring an interest, such as a loan
secured by a mortgage, from one person to another. (2) The instrument or
paper by which one person transfers such ownership to another.
Attorney's Opinion- A statement by an attorney as to the validity of
a title, arrived at after investigation of the history of the title as
recorded in the public records.
Back Title Letter (return
to top) - Also called "back title certificate" in some areas,
and "starter" in others. When titles previously have been examined up to a
certain date by reliable examiners, title companies sometimes give
subsequent examiners of such titles a letter that sets forth the condition
of the title at the time of the previous examination and authorizes them to
begin their subsequent examination with the terminal date of the previous
examination.
Balloon Note- A form of promissory note that calls for the minimum
payment of principal and the payment of interest at regular intervals. This
type of note requires a substantial final payment, which represents all the
principal.
Bankruptcy- A proceeding in U.S. District Court wherein assets of an
insolvent debtor are protected and distributed in an equitable manner.
Binder- Sometimes called "preliminary certificate" or "commitment."
(1) A preliminary report as to the condition of a title and a commitment to
issue a title insurance policy in a certain manner when certain conditions
are met. (2) A deposit in escrow of a small part of the purchase price of
real estate as evidence of good faith and to bind an agreement to purchase.
Certificate of Title (return
to top) - A certificate issued by a title examiner stating
the condition of a title.
Chain- In real estate measurements (surveying), a chain is 66 feet
long or 100 links, each link being 7.92 inches. The measurement may change
when used in fields other than surveying.
Chain of Title- The successive ownerships or transfers in the history
of title to a tract of land.
Claim- An adverse right or interest asserted by one party against
another or against an insurer or indemnitor. Claims may arise from unpaid
debts or taxes, as well as from hidden title defects such as fraud, forgery,
missing heirs, etc.
Clear Title- Real property ownership free of liens, defects,
encumbrances or claims.
Closing- Also called "settlement." A meeting of all parties involved
in a property transaction during which the transaction is consummated.
Clouded Title- An irregularity, possible claim or encumbrance that,
if valid, would adversely affect or impair the title.
CMA Comparative Market
Analysis- estimate of market value by anything from a script executing a
data search to the accumulated knowledge of a person involved in similar
sales.
Coinsurance- Two or more policies of title insurance issued by
different insurers, each covering a portion of the same risk, which together
provide total coverage of the risk.
Commitment- Also called "binder." A document issued by a title
insurance company that contains the conditions under which a policy of title
insurance will be issued.
Condemnation- (1) The taking of private property for a public
purpose, with compensation to the owner under the right of eminent domain.
Governmental units, railroads and utility companies have the right to
condemn and take private property. (2) The destruction by government of
private property that imperils the life, health or safety of the public.
Conventional Loan- A loan secured by a mortgage or deed of trust for
which the loan-to-value ratio is within an acceptable range for a particular
lending institution.
Conveyance- The transfer of title to property from one person to
another.
Covenant- A formal agreement or contract between two parties in which
one party gives the other certain promises and assurances, such as covenants
of warranty in a warranty deed.
Courtesy- A right that a husband has in his wife's property at her
death. It does not exist in all states.
Dedication (return
to top) - The setting aside of certain land by the owner and
declaring it to be for public use. Examples: streets, sidewalks and parks.
Deed- A document through which a conveyance of property is effected.
The following are example each state varies. Warranty Deed Grant Deed
Bargain and sale Quit claim and even Trust Deed which serves more like a
mortgage.
Deed Restriction- A covenant contained in a deed imposing limits on
the use or occupancy of the real estate or the type, size, purpose or
location of improvements to be constructed on it.
Defect- A blemish, imperfection or deficiency. A defective title is
one that is irregular and faulty.
Depreciation- Loss in value occasioned by ordinary wear and tear,
destructive action of the elements, or functional or economic obsolescence.
Devise- A gift of real estate made by a will.
Dominant Estate- The property for the benefit of which a right-of-way
easement exists across another's adjoining piece of land is said to be the
dominant estate. The land across which the easement runs is said to be the
servient estate.
Dower- A right that a wife has in her husband's property at the time
of his death. Does not exist in all states.
Earnest Money (return
to top) - A deposit of funds by the purchaser of a piece of
real estate as evidence of good faith.
Easement- A right to use all or part of the land owned by another for
a specific purpose. An easement may, for example, entitle its holder to
install and maintain sewer or utility lines.
Eminent Domain- The right of a government to take privately owned
property for public purposes under condemnation proceedings subject to
payment of its fair market value.
Encroachment- Any building, improvement or structure located on one
property (such as a wall, fence or driveway) that intrudes upon the property
of another.
Encumbrance- Any interest, right, lien or liability attached to a
parcel of land (such as unpaid taxes or an unsatisfied mortgage) that
constitutes or represents a burden or charge upon the property.
Equity- The market value of real property, less the amount of existing
liens.
Escheat- The reversion of property to the state when an owner dies
leaving no legal heirs, devisees or claimants.
Escrow- A method of closing a real estate transaction in which all
required documents and funds are placed with a third party for processing
and disbursement.
Estoppel- A legal restraint that stops or prevents a person from
contradicting or reneging on his previous position or previous assertions or
commitments.
Examination- The study of the instruments and muniments incident to a
chain of title to determine their effect and condition in order to reach a
conclusion as to the status of the title.
Exception- A provision in a title insurance binder or policy that
excludes liability for a specific title defect or an outstanding lien or
encumbrance.
Execute- To sign a legal instrument. A deed is said to be executed
when it is signed, sealed, witnessed and delivered.
Fannie Mae (FNMA) (return
to top) - Federal National Mortgage Association. A private
corporation dealing in the purchase of first mortgages.
Fee Simple Deed- The absolute ownership of a parcel of land. The
highest degree of ownership that a person can have in real estate, which
gives the owner unqualified ownership and full power of disposition.
FHA (Federal Housing Administration)- A federal agency that insures
first mortgages, enabling lenders to lend a very high percentage of the sale
price. This agency is part of HUD (Housing and urban development)
FHA (Farm Home
Administration)- A federal agency that insures first mortgages, enabling
lenders to lend a very high percentage of the sale price usually only
available in small communities. This agency is part of DOA (Department
of Agriculture).
Fixed Rate Mortgage- A mortgage having a rate of interest that
remains the same for the life of the mortgage.
Fixtures- Personal property that is attached to real property and is
legally treated as real property while it is so attached. Examples: medicine
cabinets, window blinds and chandeliers.
Foreclosure- A legal proceeding in which real estate secured by a
mortgage or deed of trust is sold to satisfy the underlying debt.
Forgery- The fraudulent signing of another's name to an instrument
such as a deed, mortgage or check.
Freddie Mac (FHLMC)- Federal Home Loan Mortgage Corporation. A
federal agency that purchases both conventional and federally insured first
mortgages from members of the Federal Reserve System and the Federal Home
Loan Bank System.
Ginnie Mae (GNMA) (return
to top) - Government National Mortgage Association. A federal
association working with the FHA that offers special assistance in obtaining
mortgages and purchases mortgages in the secondary market.
Grant- To bestow or confer, with or without compensation, a gift such
as land or money by one having control or authority over the gift.
Grantee- One to whom a grant is made.
Grantor- One who makes a grant.
Hereditaments (return
to top) - Any and all kinds of estates, interest and rights
in real estate that can be inherited.
Homeowners Insurance- Real estate insurance protecting against loss
caused by fire, some natural causes, vandalism, etc., depending on the terms
of the policy. Also includes coverage such as personal liability and theft
away from home.
HUD (Department of Housing and Urban Development)- The federal
department responsible for the major housing programs in the United States.
Index (return to top)
- (1) An alphabetical listing in the public records of the names of
parties to recorded real estate instruments together with the book and page
number of the record. (2) The listing in abstract and title plants of
recorded real estate instruments in groups according to land descriptions,
known as a geographic index. (3) The alphabetical listing in abstract and
title plants, by names of the parties, of all recorded instruments that
affect but do not describe particular real estate, such as judgments, powers
of attorney, wills and probate proceedings. Such indexes are known by
various names, such as "general index," "judgment index" and "name index."
Instrument- Any written document having a legal effect.
Judgment (return
to top) - The determination of a court regarding the rights
of parties in an action. A judgment of debt on a property owner can create a
lien on all of that owner's land within a certain jurisdiction.
Junior Mortgage- A mortgage lower in lien priority
than another.
K No entries for K (return
to top)
Leasehold
(return to top) - The
right to possession and use of land for a fixed period of time. The lease is
the agreement that creates the right.
Lessee- A tenant holding a leasehold.
Lessor- A landlord; one who gives a leasehold to a lessee.
License- Permission to go upon or use the land of another, the
permission being a personal privilege and not constituting an interest in
the land.
Lien- A monetary charge imposed on a property, usually arising from
some debt or obligation.
Lien Waver- Also called "waiver of liens." A waiver of mechanics'
lien rights, signed by contractors or subcontractors.
Link- In surveying, a length of 7.92 inches.
Loan Policy- Also called "mortgage policy." A title insurance policy
insuring a mortgagee, or beneficiary under a deed of trust, against loss
caused by invalidity or unenforceability of a lien, or loss of priority of
the mortgage or deed of trust.
Lis Pendens- A legal notice informing a claimed interest or
litigation claiming an interest in real estate.
Lot- Generally, any portion or parcel of real property. Usually
refers to a portion of a subdivision.
Market Value (return
to top) - The average of the highest price that a buyer,
willing but not compelled to buy, would pay and the lowest price a seller,
willing but not compelled to sell, would accept.
Mechanic's Lien- A lien on real estate, created by operation of law,
that secures the payment of debts due to persons who perform labor or
services or furnish materials incident to the construction of buildings and
improvements on the real estate.
Metes and Bounds- A land description in which boundaries are
described by courses, directions, distances and monuments.
Mortgage- A conditioned pledge of property to a creditor as security
for the payment of a debt.
Mortgage Insurance- Insurance written by an independent mortgage
insurance company protecting the mortgage lender against loss incurred by a
mortgage default, thus enabling the lender to lend a higher percentage of
the sale price.
Mortgagee- The holder of a mortgage. The party to whom a mortgage is
made, generally the lender.
Mortgagee Policy- See Loan Policy.
Mortgagor- A person who mortgages property. A person who executes a
mortgage, generally the property owner.
Multiple Listing- The pooling in a central bureau of listings of
properties for sale. These listings are held individually by members of a
group of real estate brokers, with the agreement that any member of the
group may sell the properties and, in the case of a sale, the commission
will be divided between the broker making the sale and the broker who filed
the listing.
Multiple Exchange- A trade of three or more properties in one transaction.
Muniments of Title- Written evidence (documents) that an owner
possesses to prove his or her title to property.
Note (return to top)
- Also called "promissory note." A written promise to pay a sum of
money, usually at a specified interest rate, at a stated time to a named
payee.
Owner's Policy (return
to top) - A policy of title insurance insuring an owner of
real estate against loss occasioned by defects in, liens against or
un-marketability of the owner's title.
Performance Mortgage - A mortgage where the accompanied note is paid
based on the performance of something else, usually the income of the
secured property.
Plat (return to top)
- Also called "plat map." A map dividing a parcel of land into lots, as
in a subdivision. A plat book contains the plat maps for a given area.
Point- Also called "commission points" or "discount points." One
percent of the amount of the loan = one point..
Premium- The amount payable for an insurance policy.
Prescriptive Easement- A right to use another's property that is not
inconsistent with the owner's rights and that is acquired by an open,
notorious, adverse and continuous use for the statutory period, for example
20 years.
Principal- (1) A sum of money owed as a debt on which interest is
payable. (2) A person who empowers another to act as his representative or
agent. (3) The person having prime responsibility for an obligation as
distinguished from one who acts as a surety or endorser.
Purchase Money Mortgage- A mortgage given by a purchaser to a seller
on the subject property to secure payment of a part of the purchase price.
Quit Claim Deed (return
to top) - A deed that does not imply that the grantor holds
title, but that surrenders and gives to the grantee any possible interest or
rights that the grantor may have in the property.
Real Estate (return
to top) - Also called "real property." (1) Land and anything
permanently affixed to the land, such as building, fences and those things
attached to the buildings, such as light fixtures, plumbing and heating
fixtures, or other such items that would be personal property if not
attached. (2) May refer to rights in real property as well as the property
itself. Often misspelled as realestate.
Recording- The noting in a public office of the details of a legal
document - such as a deed or mortgage - affecting the title to real estate.
When such an instrument is properly recorded, it is considered to be a
matter of public record. Legally, that means that all subsequent purchasers
are deemed to have constructive knowledge of that information.
Reinsurance- A contractual relationship between two insurance
companies under which one insurer assumes a portion of the risk of the
insurance policy written by the other.
Release- (1) To relieve from debt or security or abandon a right,
such as the release of a mortgage lien from a part or all of the land
mortgaged. (2) The instrument effecting a release.
Restrictions- Limitations on the use of property imposed or created
by deeds or other documents in the chain of title. A restriction, for
example, may prohibit the placement of trailer or the construction of a
commercial structure on the property.
Riparian Rights- The rights of owners of lands bordering watercourses
which relate to the water and its use.
Sale Agreement (return
to top) - A contract entered into between a buyer and seller,
setting forth the terms, provisions and conditions of a sale of real estate.
Sale and Leaseback- The sale of an asset to a buyer who immediately
leases it back to the seller.
Search- A careful exploration and perusal of the public records in an
effort to find all recorded instruments relating to a particular chain of
title.
Second Mortgage- A mortgage ranking in priority immediately below a
first mortgage.
Subordination- The act or process by which a person's rights are
ranked below the rights of others. For example, a second mortgagee's rights
are subordinate to those of the first mortgagee.
Surety- (1) A person who agrees to be responsible for a debt or
obligation of another. (2) The pledge or agreement by which one undertakes
responsibility for the debt or obligation of another.
Title (return to top)
- (1) A combination of all the elements that constitute the highest
legal right to own, possess, use, control, enjoy and dispose of real estate
or an inheritable right or interest therein. (2) The rights of ownership
recognized and protected by the law.
Title Covenants- Covenants ordinarily inserted in conveyances and in
transfers of title to real estate for the purpose of giving protection to
the purchaser against possible insufficiency of the title received. A group
of such covenants known as "common law covenants" includes: covenants
against encumbrances; covenants for further assurance (in other words, to do
whatever is necessary to rectify title deficiencies); covenants of good
right and authority to convey; covenants of quiet enjoyment; covenants of
seisin; covenants of warranty. (See Warranty or Covenant.)
Title Defect- (1) Any possible or patent claim or right outstanding
in a chain of title that is adverse to the claim of ownership. (2) Any
material irregularity in the execution or effect of an instrument in the
chain of title.
Title Insurance Policy- A contract of title insurance under which the
insurer, in keeping with the terms of the policy, agrees to indemnify the
insured against loss arising from claims against the insured interest.
Title Plant- Also called "abstract plant" in some areas. A
geographically filed assemblage of title information that helps in
expediting title examinations, such as copies of previous attorneys'
opinions, abstracts, tax searches and copies or take-offs of the public
records. New plants are computerized often using the county or
institution's data based.
Trust Deed- aka Deed
of Trust: The purpose is similar to a mortgage however mechanics much
different. The barrower is the Trustor who Deeds to the Trustee (Usually a
title company) who deeds to the beneficiary if the note is not paid or to
the Trustor when the note is paid in full.
Underwriter (return
to top) - An insurance company that issues insurance policies
to the public or to another insurer.
Variable Interest Rate (return
to top) - Also called "flexible interest rate." An interest
rate that fluctuates as the prevailing rate moves up or down. In mortgages,
there are usually maximums as to the frequency and amount of fluctuation.
Veterans Administration (VA) Loans- Housing loans to veterans by
banks, savings and loans, or other lenders that are guaranteed by the
Veterans Administration, enabling veterans to buy a residence with little or
no down payment.
Waiver (return to
top) - The voluntary and intentional relinquishment of a
known right, claim or privilege.
Warranty- In a broad sense, an agreement or undertaking by a seller
to be responsible for present or future losses of the purchaser occasioned
by deficiency or defect in the quality, condition or quantity of the thing
sold. In a stricter sense, the provision or provisions in a deed, lease or
other instrument conveying or transferring an estate or interest in real
estate under which the seller becomes liable to the purchaser for defects in
or encumbrances on the title. (See Title Covenants.)
Will- A testamentary disposition of property, usually in a form
prescribed by law, that takes effect upon death.
X No entries for X (return
to top)
Y No
entries for Y (return to top)
Zoning (return
to top) - Laws passed by local governments regulating the
size, type, structure, nature and use of land or buildings. |
