| ABSTRACT OF JUDGMENT |
A summary of the essential
provisions of a court judgment which, when recorded in the county
recorder’s office, creates a lien upon the property of the debtor in
that county, both presently owned or after acquired.
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| ABSTRACT OF TITLE |
A history of a property’s title
record used in some states to prepare the Preliminary or Title
Commitment report. An Abstract of Title lists anyone who’s ever had a
claim to the property, past and present. Some states require mortgage
lenders to obtain a complete Abstract of Title. However, most states
condense the abstract into a document called either the Preliminary or
Title Commitment which lists only current claims to the property.
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| ACCEPTANCE |
Offeree's consent to enter into
a contract and be bound by the terms of the offer.
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| ACCEPTED FEE APPRAISER PANEL |
Panel of authorized fee
appraisers that complete property appraisals for Data Mortgage Company
loans.
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| ACCESS RIGHTS |
Right to come and go.
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| ACCRUED INTEREST |
Interest on a note, bond, etc.,
which has been earned but not yet paid.
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| ACKNOWLEDGMENT |
Formal declaration, attached to
or a part of an instrument, made before a duly authorized officer
(usually a notary public) by the person who has executed that
instrument, the execution being a free act and deed.
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| ACRE |
Measure of land: [ 1acre =
43,560 square feet ].
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| ACQUISITION COST/MORTGAGE BASIS |
Total cost to the buyer for the
real estate securing the mortgage, including the sales price, cost of
any required repairs paid for by the buyer, plus Allowable Closing
Costs. Total acquisition does not include non-realty items, prepaid
expenses (i.e., taxes, assessments, and insurance premiums), or seller
concessions.
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| ACTIVE DUTY |
Because of Public Law 97-66,
service in the armed forces, for the purpose of Eligibility for
Entitlement, does not commence until entry into actual active duty
status, regardless of any reserve duty prior to that date OR enlistment
under the Delayed Entry Program (considered in the reserves until
reporting for active duty).
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| ADDENDUM |
An attachment to a contract,
deed or other document that incorporates additional terms of information
to the original.
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| ADDENDUM TO DEED/MORTGAGE |
|
Attachment to Deed Of Trust or Mortgage that governs the loan transaction during the construction phase of an
OTC loan. This document is removed from the Deed Of Trust/Mortgage
at permanent loan commencement.
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| ADDENDUM TO NOTE |
This addendum governs the loan
during the construction phase of an OTC loan, stating the start date and
completion date of the construction phase as well as the interest rate
and payment parameters of the construction phase.
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| ADJUSTABLE-RATE MORTGAGE (ARM) |
A mortgage loan where the
interest rate is not fixed for the entire term of the loan, and can
change during the life of the loan in line with movements of an index
rate. So, it Is a mortgage in which the interest rate is adjusted
periodically based on a pre-selected index. Also sometimes known as the
re negotiable rate mortgage, the variable rate mortgage or the Canadian
rollover mortgage.
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| ADJUSTABLE-RATE RIDER |
A rider is an addition to a
security instrument. The adjustable-rate rider outlines terms and
conditions specific to an adjustable-rate loan. It must be recorded
along with the security instrument at the county recorder’s office. See
also SECURITY INSTRUMENT.
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| ADJUSTMENT DATE |
The date on which the interest
rate changes for an adjustable-rate mortgage (ARM).
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| ADJUSTMENT PERIOD |
The period that elapses between
the adjustment dates for an adjustable-rate mortgage (ARM).
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| ADJUSTMENT CAP |
The adjustment cap limits the
degree of interest rate changes during a specific period, during the
life of the loan.
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| AGREEMENT FOR SALE |
Written document in which the
purchaser agrees to buy, and the seller agrees to sell, certain real
estate (or personal property) under stated terms and conditions. Also,
known as sales contract, binder, or earnest money contract.
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| ALL-INCLUSIVE TRUST DEED (AITD) |
Refinancing technique in which
a new trust deed is created, which includes the balance due on the
existing Note plus the new funds advanced. Also known as a wraparound
mortgage.
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| ALLOWABLE CLOSING COSTS |
Nonrecurring closing costs that
are customary and reasonable charges common to the area and normally
paid for by the borrower.
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| ALIMONY |
Periodic payments made under a
divorce decree or a written separation agreement toward the support of a
former spouse. Alimony may be taken as a deduction from adjusted gross
income by the person who pays it, while the person who receives it must
claim it as a taxable income.
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| ALTA |
An acronym for American Land
Title Association. Commonly used in reference to a particular type of
Title policy. See AMERICAN LAND TITLE ASSOCIATION.
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| AMENITY |
Feature of real property that
enhances its attractiveness and increases the occupant or user's
satisfaction, although the feature is not essential to the property's
use. Natural amenities include a pleasant or desirable location near
water, scenic views of the surrounding area, etc. Manmade amenities
include swimming pools, tennis courts, community buildings, and other
recreational facilities.
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| AMERICAN LAND TITLE ASSOCIATION
(ALTA) |
An organization composed of
title insurance companies, which has adopted certain insurance policy
forms to standardize title insurance coverage on a national basis. See
also TITLE INSURANCE.
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| AMORTIZATION |
Payment of debt in regular,
periodic installments of principal and interest, as opposed to interest
only payments. Amortization is the process of reducing principal and
interest in equal installment payments at specific intervals over a set
term. For example, a fully amortized loan payment is a portion of which
will be applied to pay the accruing interest on the loan with the
remainder being applied to principal. Over time, the interest portion
decreases as the loan balance decreases and the amount applied to
principal increases so that the loan is paid off in the specified term.
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| ANNUAL PERCENTAGE RATE
|
The Annual Percentage Rate
("APR") is a measure of the cost of credit, expressed as a yearly rate.
The APR takes into account the amount financed, the finance charge, and
the amounts and timing of the payments. Under the Truth in Lending Law,
the APR must be disclosed and labeled.
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| ANNUITY |
Fixed payments an individual
receives for a lifetime or specified number of years at consistent
intervals. For example, a customer may receive an annuity from a pension
plan or from an investment.
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| APPLICATION |
Form used to record pertinent
information about a prospective borrower and the proposed security.
Standard application forms include FNMA 1003.
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| APPLICATION FOR COMMITMENT FOR
INSURANCE |
HUD Form 92900, copy 4 of the
URLA Addendum. Whenever HUD refers to the application, they are
referring to this form.
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| APPRAISAL
|
Opinion as to the monetary
value of the property. For example, an appraisal of property provides an
idea of how much money the property is worth in the housing market at a
given time.
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| APPRECIATION |
An increase in value. Example:
An increased value of property due to either a positive improvement of
the area or the elimination of negative factors.
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| APPURTENANCE |
Anything-concrete or
abstract-attached to the land and part of the property, such as a ban,
garage, or an easement.
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| APR |
Acronym for Annual Percentage
Rate.
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| ARM'S LENGTH TRANSACTION
|
Transaction in which the
parties involved are entirely independent of each other, deal with each
other as strangers, and have no reason for collusion.
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| "AS-BUILT" APPRAISAL |
Appraisal that is based on the
value of the project assuming all construction has been completed.
Includes land value. The appraiser utilizes the builder's line
item budget and plans and specifications to arrive at the appraised
value.
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| AS IS CONDITION |
Premises accepted by a buyer or
tenant in the condition existing at the time of the sale or lease,
including all physical defects.
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| ASSESSMENT |
Value placed on property for
the purpose of taxation. May also refer to a levy against property
for a special purpose, such as a sewer assessment.
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| ASSESSED VALUE |
Value placed upon property for
property-tax purposes by the tax assessor.
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| ASSIGNMENT |
Transfer of a right or contract
from one person to another.
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| ASSIGNMENT OF RENTS |
Written agreement in which the
owner of a property transfers possession, but not ownership, of the
property to another party (usually a mortgagee or creditor), including
the right to collect rents, manage the property, and apply the net
income toward delinquent mortgage payments.
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| ASSUMPTION |
An act that occurs when the
buyer of a property assumes the seller's debt or obligation without
obtaining new financing. This must be approved by the lender and be
permitted under the terms of the note that the seller executed with the
lender. So, assumption is a method of selling real estate in which the
property purchaser agrees to take over the primary liability for payment
of an existing mortgage. The seller remains secondarily liable
unless specifically released by the lender.
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| ATTACHMENT |
A legal process whereby the
judgment creditor may obtain a lien against the debtor’s property. See
also LIEN.
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| ATTORNEY CLOSINGS |
This practice is prevalent in
states where attorneys’ opinions are used in place of title reports.
Closings by attorneys follow much the same procedures as escrow
closings. The lender delivers to the attorney the settlement statement
and the net loan proceeds, as well as instructions for their use.
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| ATTORNEY IN FACT |
A person given the authority to
act on behalf of another under a power of attorney.
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| ATTORNEY'S OPINION OF TITLE (in
absence of a title co.) |
| A statement issued by an
attorney in states that don’t use a Preliminary Title Report or Title
Commitment. All liens recorded against the property are disclosed in
this statement. The attorney also advises on items that require
completion to gain a clear title insurance policy before recording our
security instrument. |
