Glossary

A

Acceleration Clause

A clause that allows a lender to make the entire mortgage loan due immediately in response to a particular event.

Adjustable Rate Mortgage

A home loan with an interest rate that may increase or decrease at certain times within a specified range.

Appraisal

An estimate of a property’s value made by a licensed appraiser.

Assessor

See Tax Assessor.

Assignment

The transfer of rights from one party to another.

B

Bank-Owned Property

See REO.

Bankruptcy

A court-filed action that allows creditors to reorganize their debt.

Board Date

See Effective Date.

Broker Price Opinion (BPO)

A real estate broker’s estimate of a property’s value, usually less than that of a licensed appraiser.

C

Chapter 13

Bankruptcy code which calls for a reduction in debt payments that will allow the creditor the ability to repay all debts.

Chapter 7

Bankruptcy code which calls for liquidation, the sale of all non-exempt assets, to repay debts.

Closing Date

Date on which a buyer takes ownership of the property.

Cloud on the Title

An outstanding claim that may negatively affect title.

Collateral

Asset(s) pledged to back a loan.

Condominium

A type of ownership in which a party owns a single unit as well as part of a common area.

Consideration

The item of value a party gives up for exchange in a contract.

D

Deed in Lieu of Foreclosure

When a borrower gives up the property deed to the lender before foreclosure.

Deed of Trust (Trust Deed)

Document specifying financial interest in a property for a loan.

Default

To miss a loan payment or other legal obligation in a loan contract.

Deficiency

The balance owed to a lender after applying all proceeds from a foreclosure sale.

Delinquency

The state of having missed debt payments.

Down Payment

The initial sum of money paid to a seller excluding closing costs.

Due on Sale

Mortgage agreement in which the borrower pays off the entire loan in the event of a sale.

E

Earnest Money

Deposit for a real estate purchase to demonstrate seriousness.

Easement

The right to use property owned by another person for a specific purpose.

Effective Date

Shows how up-to-date a county's records are. Also commonly known as thru-date or board date.

Encroachment

When one landowner’s property intrudes on another landowner’s property.

Equity

The value of ownership in a property usually the difference between the fair market value and the unpaid balance on the mortgage.

Exclusive Right to Sell

an agreement that gives only a one broker the right to sell a property and the right to collect compensation regardless of who made the actual sale.

F

Fannie Mae

See Federal National Mortgage Association.

Federal Home Loan Mortgage Corporation

The government-owned company that buys mortgages from savings and loans institutions.

Federal National Mortgage Association

The government-owned company that buys mortgages from mortgage companies to provide funding for future homeowners. Also commonly known as Fannie Mae.

FHA (Federal Housing Administration)

The government agency in charge of housing standards as well as insuring home loans.

FHA Mortgage

Home loan insured by the FHA.

Foreclosure

When a bank takes a property to public auction because of non-payment of mortgage. Browse through our foreclosure properties list or learn more about the foreclosure process in our knowledge base.

Freddie Mac

See Federal Home Loan Mortgage Corporation.

G

Ginnie Mae

See Government National Mortgage Association.

Government National Mortgage Association

government-owned company that buys mortgages from lending institutions.

Grantee

Buyer of a home or person taking out a mortgage.

Grantor

Seller of a home or person or bank lending out money for a mortgage.

I

Instrument

A written legal document.

Involuntary Lien

A claim placed on property without the owner’s consent, e.g. property taxes.

J

Judgment

A lawsuit attached to a property.

Judgment Amount

The amount that is still owed by the homeowner to the particular lender.

L

Lien

A debt that is attached to a property.

Lis Pendens

The official legal document filed against homeowners after being deliquent on their mortgage payments for a set amount of day. The deliquency period differs from state to state.

Loan Balance

The amount owed on a loan.

Loan Modification

The process of changing the terms of a loan.

Loan Officer

Person who looks for borrowers.

M

Mechanic’s Lien

Claim on a property for unpaid improvements.

Metes and Bounds

A method of describing land boundaries.

Mortgage

A written legal document that puts a claim on a property for the payment of a loan.

Mortgage Commitment

Formal indication made by lender that grants a mortgage loan on property for a specified amount and terms.

Mortgage Lien

A claim against a property for a mortgage loan.

Negative Equity

When outstanding loans exceed a property’s worth.

N

Notice of Default

A letter sent to a borrower indicating a missed payment.

O

Open Mortgage

One which may be paid off prior to maturity with no penalty.

Owner-Occupied

A home used as the borrower’s primary residence.

P

Power of Attorney

A document signed by a property’s owner that gives a third party the right to act on his behalf.

Purchase Money Mortgage

A loan given by the seller when the buyer cannot qualify for a bank loan.

Pre-Foreclosure

The initial stage of the foreclosure process when a lender files a public default notice against the homeowner for an excessive amount of missed mortgage payments. A pre-foreclosure property will be foreclosured upon if the homeowner is unable to pay off the amount in default.

Browse through our list of pre-foreclosure properties or learn more about the pre-foreclosure process in our knowledge base.

Q

Quitclaim Deed

A document which transfers all of a grantor’s interest in a property to the grantee.

R

Recording

Writing in public documents which affect the title of a property.

Recording Date

The date that a document was officially filed at the courthouse.

Redemption Period

The time period during which a mortgagor has the right to reclaim a property after repaying all debts before the sale at foreclosure. In some states such as NJ, the redemption period lasts up to 10 days after the sale.

Refinance

Replacing a loan with a new one usually with a lower interest rate.

REO (Real Estate Owned)

A property that has been repossessed by the lender (bank) after an unsuccessful foreclosure auction. Also commonly known as a bank-owned property.

S

Sheriff’s Deed

The deed of a property involved in a court-ordered sale to repay debt.

Sheriff's Sale

See Foreclosure.

Short Sale

Process in which the lender allows a property to be sold for less than the amount owed on a mortgage, taking a loss.

Subject-To Clause

The part of a deed which transfers title to a buyer in a transaction in which the buyer assumes the seller’s mortgage.

T

Tax Assessor

A public official that is responsible for the valuation of real property to determine the amount of property tax owed.

Tax Sale

The government auction of a home because the homeowner failed to make tax payments.

Thru-Date

See Effective Date.

Title

Official document for property ownership.

Title Insurance

Insurance that protects you in case something was missed on the title search.

Title Search

A search of a property's legal history to determine ownership, outstanding debts attached to the property, as well as any other legal restrictions. View our title search products page for a more detailed description.

Trustee

The appointed party who makes legal decisions involving another’s assets. During the foreclosure processes, the trustee is the party assigned to represent the lender.

Trustee Sale

See Foreclosure.

U

Underwriter

Person who assesses a borrower’s eligibility for mortgage loans.

W

Warranty Deed

A written guarantee of title from the grantor to the grantee.

Writ of Execution

A court order calling for the sale of property to satisfy a judgment.