| A
Abstract of Title — A condensed history or summary
of all transactions affecting a particular tract of land.
Access — The right to enter and leave a tract
of land from a public way. Can include the right to enter
and leave over the lands of another.
Accretion — The slow build-up of lands by natural
forces such as wind or water.
Acknowledgment — The act by which a party executing
a legal document goes before an authorized officer or notary
public and declares the same to be his or her voluntary act
and deed.
Acre — A tract of land 208.71 feet square and
containing 43,560 square feet of land.
Administrator — A person appointed by a probate
court to settle the affairs of an individual dying without
a will. The term is "administratrix" if such a person
is a woman.
Adverse Possession — A claim made against the
lands of another by virtue of open and notorious possession
of said lands by the claimant.
Affidavit — A sworn statement in writing.
Agent — A person or company that has the power
to act on behalf of another or to transact business for another,
e.g., a title agent under contract with Old Republic Title
to issue policies of title insurance.
Air Rights — The right to ownership of everything
above the physical surface of the land.
ALTA — American Land Title Association, a national
association of title insurance companies, abstractors and
attorneys specializing in real property law. Its headquarters
are in Washington, D.C.
Appurtenance — Anything so annexed to land or
used with it that it will pass with the conveyance of the
land.
ARM — Adjustable Rate Mortgage. See "Variable
Rate Mortgage."
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.
Assignee — One to whom a transfer of interest
is made. For example, the assignee of a mortgage or contract.
Assignor — One who makes an assignment. For example,
the assignor of a mortgage or contract.
Assumable Mortgage — A mortgage which, by its
terms, allows a new owner to take over its obligations.
Attachment —Legal seizure of property to force
payment of a debt.
Attorney in Fact — One who holds a power of attorney
from another allowing him or her to execute legal documents
such as deeds, mortgages, etc., on behalf of the grantor of
the power.
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B
Balloon Mortgage — A mortgage that is amortized
over a specific period of years, but requires a lump sum payment
in full at an earlier date.
Bankruptcy — A federal court proceeding in which
debtors are relieved of liability for their debts after surrender
of their assets to a court appointed trustee .
Bureau of Land Management — The branch of government
in charge of surveying and managing public lands.
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C
C & R ’ s — Covenants, Conditions and
Restrictions.
See "Conditions and Restrictions ."
Chain — A term of land measurement that is 66
feet in length.
Chain of Title — A term applied to the past series
of transactions and documents affecting the title to a particular
parcel of land.
Clear Title — One which is not encumbered or
burdened with defects.
Closing — Also known as "escrow" or
"settlement." The process of executing legally binding
documents, such as deeds and mortgages most commonly associated
with the purchase of real estate and the borrowing of money
to assist in the purchase .
Clouded Title — An encumbered title.
Commitment to Insure — A report issued by a title
insurance company, or its agent, committing the title insurance
company to issue the form of policy designated in the commitment
upon compliance with and satisfaction of requirements set
forth in the commitment.
Common Interest Community (CIC) — Ownership characterized
by mutual ownership of common areas, either jointly or through
membership in an association, e.g., condominiums, planned
unit developments, and townhomes.
Company Loan — Loan by employer to facilitate
relocation of employee. Usually short term .
Condemnation — Taking private property for public
use through court proceedings .
Condition or Conditions — A proviso in a deed
or will that, upon the happening or failure to happen of a
certain event, limits, enlarges, changes or terminates the
title of the purchaser or devisee.
Conditions and Restrictions — A common term used
to designate conditions and restrictions on the use of land.
Includes penalties for failure to comply. Commonly used by
land subdividers on newly platted areas.
Condominium — A system of individual fee ownership
of units in a multi-unit structure, combined with joint ownership
of common areas of the structure and land.
Conservator — See "Guardian . "
Contract for Deed — An agreement to sell and
purchase under which title is held as security by the seller
until such time as the required payments to the seller have
been completed.
Convey — The act of deeding or transferring title
to another.
Conveyance — An instrument by which title is
transferred; a deed. Also, the act of transferring title.
Cooperative — A residential multi-unit building
owned by a corporation in which each unit is occupied by a
member of the corporation pursuant to a lease or occupancy
agreement .
Covenant — An agreement written into deeds and
other instruments promising performance or non-performance
of certain acts, or stipulating certain uses or non-uses of
the property.
Cul-de-Sac — The terminus of a street or alley.
Usually laid out by modern engineers to provide a circular
turn around for vehicles.
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D
Deed — A written document by which the ownership
of land is transferred from one person to another.
Deed of Trust — See " Mortgage."
Delivery — The final and absolute transfer of
a deed from seller to buyer in such a manner that it cannot
be recalled by the seller. A necessary requisite to the transfer
of title.
Devise — The disposition of real property by
will.
Due on Sale Clause — Provision in a mortgage
or deed of trust which requires loan to be paid in full if
property is sold or transferred.
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E
Earnest Money — Advance payment of part of the
purchase price to bind a contract for property.
Easement — An interest in land owned by another
that entitles its holder to a specific limited use, such as
laying a sewer, putting up electric power lines, or crossing
the property.
Egress — The right to leave a tract of land.
Often used interchangeably with "access."
Eminent Domain — The power of the state to take
private property for public use upon payment of just compensation.
Encroachment — A trespass or intrusion onto another’s
property, usually by a structure, wall or fence.
Encumber — To burden a parcel of land with a
lien or charge, e.g., a mortgage.
Encumbrance — A lien, liability or charge upon
a parcel of land.
Escheat — A reversion of property to the state
in those cases where an individual dies without heirs or devisees,
and, in some states, without a will.
Escrow — A pro c e d u re whereby a disinterested
third party handles legal documents and funds on behalf of
a seller and buyer, and delivers them upon performance by
the parties.
Estate — A person’s possessions. The extent
of a person’s interest in real property.
Examination of Title — The investigation and
interpretation of the record title to real property based
on the title search or abstract.
Exception — In legal descriptions, that portion
of land to be deleted or excluded. The term often is used
in a different sense to mean an objection to title or encumbrance
on title.
Executor — A person appointed by the probate
court to carry out the terms of a will. The term is "executrix"
if that person is a woman.
Extended Mortgage — One in which the due date
of a mortgage is extended for a longer period, often at a
higher interest rate than the original mortgage.
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F
Fannie Mae — Federal National Mortgage Association
(also FNMA) is a private corporation, federally chart e re
d to provide financial products and services that increase
the availability and affordability of housing by purchasing
mortgage loans.
Fee Simple Estate — The greatest interest in
a parcel of land that it is possible to own. Sometimes designated
simply as "Fee."
Federal Housing Administration (FHA) Guarantee —
An insurance contract in which HUD through FHA insures that
the named lender will recover a specific percentage of the
loan amount from the insurer (FHA) in the event that the loan
goes bad.
Financing Statement — A document filed with the
Register of Deeds or Secretary of State securing the title
to personal property.
Fixtures — Any item of property so attached to
real property that it becomes a part of the real property.
Flood Certification — A common term for a Federal
Emergency Management Agency (FEMA) Standard Flood Hazard Determination
Form (SFHDF). This determines whether land or a building is
located within a Special Flood Hazard Area for purposes of
flood insurance requirements under the National Flood Insurance
Pro g r a m .
Forfeiture of Title — Provision in a deed creating
a condition which will cause title to be passed to another
should certain circumstances occur.
Freddie Mac — Federal Home Loan Mortgage Corporation
(also FHLMC) is a stockholder owned corporation chartered
by Congress that purchases mortgage loans.
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G
Ginnie Mae — Government National Mortgage Association
(also GNMA) is a wholly-owned United States corporation that
guarantees privately issued securities backed by pools of
mortgages insured by FHA (Federal Housing Administration),
FMHA (Farm e r s Home Administration) or VA (Veterans Administration).
Graduated Payment Mortgage — A loan in which
monthly payments are relatively small in the beginning and
gradually increase in dollar amount over the life of the mortgage.
Grantee — A person who acquires an interest in
land by deed, grant, or other written instrument.
Grantor — A person, who, by a written instrument
, transfers to another an interest in land.
Guardian — One appointed by the court to administer
the affairs of an individual not capable of administering
his or her own affairs.
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H
Harbor Line — An arbitrary line set by authorities
on navigable rivers, beyond which wharves and other structures
may not be built. Also designated as line of navigation.
Heir — One who might inherit or succeed to an
interest in land of an individual who dies without leaving
a will (intestate).
Hiatus — A gap or space unintentionally left,
when attempting to describe adjoining parcels of land.
Home Equity Conversion Mortgage — A reverse or
reverse annuity mortgage in which HUD through FHA guarantees
that the borrower will receive monthly payments from the insurer
(FHA) in the event the lender is unable to make payments to
the borrower.
Home Repair Loan — Used for repairs and additions
to existing structures without affecting existing mort g a
g e . Typically 10 years or less in length.
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.
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I
Improvements — Those additions to raw lands tending
to
Inchoate Dower — The imperfect interest which
the law gives a wife in the lands of her husband. This is
an interest which upon the death of the husband may ripen
into possession and use. Most states have abolished dower
rights.
Inchoate Curtesy — The imperfect interest which
the law gives a husband in the lands of his wife. This is
an
Indemnify — To make payment for a loss.
Ingress — The right to enter a tract of land.
Often used
Insurance — A contract of indemnity against specified
perils.
Insurance Loan — When cash value of a life insurance
policy is borrowed by the insured.
Interim Financing — Temporary or short term loans.
Often used with new construction. Usually replaced with a
permanent long-term mortgage.
Intestate — Designates the estate or condition
of failing to leave a will at death. "To die intestate."
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J
Joint Tenancy — An estate where two or more persons
hold real estate jointly for life, the survivors to take the
Judgment — A decree of a court. In practice this
is the lien or charge upon the lands of a debtor resulting
from the Court ’s award of money to a creditor.
See "Judgment Lien."
Judgment Docket — The record book of a County
Clerk where a judgment is entered in order that it may become
a lien upon the property of the debtor.
Judgment Lien — The charge upon the lands of
a debtor resulting from the decree of a court properly entered
into the judgment docket.
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K
There are no items in this category.
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L
Land Contract — See "Contract for Deed ."
Landmark — Any conspicuous object that helps
establish land boundaries.
Lease — A grant of the use of lands for a term
of years in consideration of the payment of a monthly or annual
rental.
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.
Lessee — One who takes lands upon a lease.
Lessor — One who grants lands under a lease.
Lien — A hold, claim, or charge allowed a creditor
upon the lands of a debtor. Some examples are mortgage liens,
judgment liens, mechanics’ liens.
Life Estate — A grant or reservation of the right
of use, occupancy and ownership for the life of an individual.
Link — A term of land measurement being 1/100th
of a chain or 66/100ths of a foot.
Lis Pendens — A notice recorded in the official
records of a county to indicate that a suit is pending affecting
the lands where the notice is recorded.
Loan Policy — See " Lender’s Policy
."
Loss Payable Clause — Provision added to a Fire
and Casualty Policy which says any loss will be paid to two
or more parties as their interest may appear. Usually the
owner and the mortgage lender.
Lot — A part of a subdivision or block having
fixed boundaries ascertainable by reference to a plat or survey.
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M
Majority — The age at which a person is entitled
to handle his or her own affairs.
Marketable Title — A good title about which there
is no fair or reasonable doubt.
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.
Minor — One who because of insufficient age or
status is legally incapable of making contracts.
Monument of Survey — Visible marks or indications
left on natural or other objects indicating the lines and
boundaries of a survey. May be posts, pillars, stones, cairns,
and other such objects. May also be fixed natural objects,
blazed trees, roads and even a water course.
Mortgage —An instrument used to encumber land
as security for a debt.
Mortgage-Backed Security — A security evidencing
either the ownership of an interest in a mortgage loan or
pools of mortgage loans, or a separate obligation secured
by a mortgage loan or pool of mortgage loans.
Mortgage Banker — A specialized lending institution
that lends money solely with respect to real estate and secures
its loans with mortgages on the real estate.
Mortgage Broker — A person or company that buys
and sells mortgages for another on commission or who arranges
for and negotiates mortgage contracts.
Mortgage Revenue Bonds — Issued by communities
as a means of providing lower cost mortgage funds to certain
qualified borrowers.
Mortgagee — The mortgage lender.
Mortgagee’s Policy — See "Lender’s
Policy ."
Mortgagor — The mortgage borrower.
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N
Negative Amortization — An actual increase in
the principal amount of real estate loan because of the addition
of matured but unpaid interest to the loan balance. Usually
the result of monthly payments which a re temporarily set
at a lower than needed level.
Notary — One authorized to take acknowledgments.
See "Acknowledgment."
Note — The instrument evidencing the indebtedness
secured by a security instrument such as a mortgage or deed
of trust.
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O
Owner’s Policy — A policy of title insurance
which
Ownership — The right to possess and use property
to the exclusion of others.
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P
Patent — A document or grant by which the federal
or state government originally transferred title to public
lands to an individual. The first in the series of transfers
by which title comes down to present owners.
Personal Representative — A person appointed
by the probate court to administer a decedent’s estate.
See also "Executor" or "Administrator."
Plat or Plot — A map representing a piece of
land subdivided into lots with streets shown there on.
P.M.I. — Private Mortgage Insurance. An insurance
contract which insures that the named lender will re cover
a specific percentage of the loan amount from the insurer
in the event the loan goes bad. Many lenders require this
on higher percentage loans.
Points — A one-time special fee or extra charge
paid to a lender in order to secure a loan. Expressed as a
percentage of face amount of mortgage.
Policy — A written contract of title insurance.
Policyowner — The insured on a title insurance
policy.
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 terms of the clause.
Prorate — To allocate between seller and buyer
their proportionate share of an obligation paid or due. For
example, a proration of real property taxes or fire insurance
premiums.
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Q
Quiet Title — An action in a proper Court to
remove record defects or possible claims of other parties
named in the action.
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R
Range — A part of the government survey, being
a strip of land six miles in width, and numbered east or west
of the principal meridian.
Real Property — Land, together with fixtures,
improvements and appurtenances.
Realtor® —A federally registered collective
membership mark which identifies a real estate professional
who is a member of the National Association of Realtors ®
a n d subscribes to its strict Code of Ethics.
Realty — A brief term for real property.
Redeem — Literally "to buy back." The
act of buying back lands after a mortgage foreclosure, tax
foreclosure, or other execution sale.
Registered Land — See " Torrens Ti t l e
."
Reinsurance — To insure again by transferring
to another insurance company all or part of an assumed liability,
thus spreading the loss risk any one company has to carry.
REIT — Real Estate Investment Trust. A product
of federal tax legislation formed as a business trust, under
a special state REIT statute or as a corporation for the purpose
of investing in real estate or mortgages on real estate.
REMIC — Real Estate Mortgage Investment Conduit.
A product of 1986 federal tax legislation in which a business
entity such as a corporation, partnership, or trust in which
substantially all of the assets consist of qualified mortgages
and permitted investments, elects to be treated as a REMIC.
Qualification avoids treatment as a corporation for tax purposes.
Reverse or Reverse Annuity Mortgage — A mortgage
for which the borrower pledges home equity in return for regular
(monthly) payments, rather than a lump sum distribution of
loan proceeds. Repayment is usually not required until the
home is sold or the borrower’s estate is settled, provided
the borrower continues to live in the home and keeps current
all taxes and insurance.
See also "Home Equity Conversion Mortgage."
Right - of - Way — The right which one has to
pass across the lands of another. An easement.
Riparian — Rights to use of water and waterways
in adjoining lakes or rivers.
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S
Second Mortgage — A second loan on real estate
that a l ready has a mortgage. It is subordinate to the first
mortgage. Usually of shorter term and often at a higher interest
rate.
Section or Section of Land — A parcel of land
comprising one square mile or 640 acres.
Set Back Lines — Those lines which delineate
the required distances for the location of structures in relation
to the perimeter of the property.
Sub-surface Right — The right of ownership to
things lying beneath the physical surface of the property.
Survey — The process of measuring land to determine
its size, location and physical description and the resulting
drawing or map.
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T
Tenancy by the Entirety — Ownership by married
persons where each owns the entire estate, with the survivor
taking the whole upon the other’s death.
Tenancy in Common — An estate or interest in
land held by two or more persons, each having equal rights
of possession and enjoyment, but without any right of succession
by survivorship between the owners.
Tenant — Any person occupying real property with
the owner’s permission.
Testament — Another term for a will. Commonly
referred to as "last will and testament."
Testate — The estate or condition of leaving
a will at death. "To die testate."
Testator — A man who makes or has made a testament
or will.
Testatrix — A woman who makes or has made a testament
or will.
Title — The evidence of right which a person
has to the ownership and possession of land. Commonly considered
as a history of rights.
Title Defect — Any legal right held by others
to claim property or to make demands upon the owner.
Title Insurance — Insurance against loss or damage
resulting from defects or failure of title to a particular
parcel of real property.
Title Plant — The total facilities — records,
equipment, fixtures, and personnel — required to function
as a title insurance operation. Technically, the organization
of official records affecting real property into a system
which allows quick and efficient recovery of title information.
Title Search — An examination of public records,
laws, and court decisions to disclose the current facts regarding
ownership of real estate.
Torrens Title — A system whereby, after court
proceedings, a certificate is issued setting forth the extent
of the applicant’s estate in land subject to the exceptions
shown. Most popular in the early 1900’s, the system was
adopted in 19 states. It is presently used only in parts of
six states.
Township — A division of territory six miles
square, containing 36 sections or 36 square miles.
Tract — A particular parcel of land.
Trust — A property right held by one as a fiduciary
for the benefit of another.
Trustee — A person holding property in trust
as a fiduciary for the benefit of another.
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U
There are no items in this category.
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V
VA Guarantee — An insurance contract in which
the Veterans Administration (VA) insures that the named lender
will recover a specific percentage of the loan amount from
the insurer in the event the loan goes bad.
Variable Rate Mortgage — A loan in which the
interest rate fluctuates with the cost of funds or some other
index.
Vendee — A purchaser of real property under land
contract.
Vendor — A seller of real property under land
contract.
Vest — To pass to a person an immediate right
or interest. Title may be said to vest in John Smith.
Vestee — A nonlegal term used by title insurers
to indicate the owner of real property in a policy or report.
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W
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 as represented.
Will —A written document providing for the distribution
of property owned by a person after his or her death.
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X
There are no items in this category.
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Y
There are no items in this category.
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Z
Zoning — The right of a municipality to regulate
and determine the compatible character and use of property.
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Note
The terms contained in this booklet are defined in their most
commonly used form. Should more precise interpretations of
these terms be necessary, we advise you to seek the counsel
of an attorney.
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