Collateral - In a property loan, the property is the collateral. The borrower risks losing the property if the loan is not repaid according to the terms of the mortgage or deed of trust.

-D-

Deed - The legal document conveying title to a property.

Deed-in-lieu - Short for "deed in lieu of foreclosure," this conveys title to the lender when the borrower is in default and wants to avoid foreclosure. The lender may or may not cease foreclosure activities if a borrower asks to provide a deed-in-lieu. Regardless of whether the lender accepts the deed-in-lieu, the avoidance and non-repayment of debt will most likely show on a credit history. What a deed-in-lieu may prevent is having the documents preparatory to a foreclosure being recorded and become a matter of public record.

Deed of trust - Some states, like California, do not record mortgages. Instead, they record a deed of trust which is essentially the same thing.

Default - Failure to make the mortgage payment within a specified period of time. For first mortgages or first trust deeds, if a payment has still not been made within 30 days of the due date, the loan is considered to be in default.

Delinquency - Failure to make mortgage payments when mortgage payments are due. For most mortgages, payments are due on the first day of the month. Even though they may not charge a "late fee" for a number of days, the payment is still considered to be late and the loan delinquent. When a loan payment is more than 30 days late, most lenders report the late payment to one or more credit bureaus.

Due-on-sale provision - A provision in a mortgage that allows the lender to demand repayment in full if the borrower sells the property that serves as security for the mortgage. However, federal law prevents the due-on-sale clause from being enforced with respect to a transfer between spouses or the transfer from a person to himself, as trustee of an intervivos grantor trust.

-E-

Equity - A homeowner's financial interest in a property. Equity is the difference between the fair market value of the property and the amount still owed on its mortgage and other liens.

Escrow - An item of value, money, or documents deposited with a third party to be delivered upon the fulfillment of a condition. For example, the earnest money deposit is put into escrow until delivered to the seller when the transaction is closed.

Escrow account - Once you close your purchase transaction, you may have an escrow account or impound account with your lender. This means the amount you pay each month includes an amount above what would be required if you were only paying your principal and interest. The extra money is held in your impound account (escrow account) for the payment of items like property taxes and homeowner’s insurance when they come due. The lender pays them with your money instead of you paying them yourself.

-F-

Foreclosure - The legal process by which a borrower in default under a mortgage is deprived of his or her interest in the mortgaged property. This usually involves a forced sale of the property at public auction with the proceeds of the sale being applied to the mortgage debt.

-G-

Grantee - The person to whom an interest in real property is conveyed.

Grantor - The person conveying an interest in real property

GAAP - generally accepted accounting principles

-I-

Inter vivos - Latin: from one living person to another living person. For example, an inter vivos trust is one which the settler sets up to take effect while he or she is still alive. It can be contrasted with the testamentary trust which is to take effect only upon the settlor’s death. Another example is the sale of a life estate which can only occur between persons living; i.e. inter vivos.

-L-

Loan origination - How a lender refers to the process of obtaining new loans.

Loan servicing - After you obtain a loan, the company you make the payments to is "servicing" your loan. They process payments, send statements, manage the escrow/impound account, provide collection efforts on delinquent loans, ensure that insurance and property taxes are made on the property, handle pay-offs and assumptions, and provide a variety of other services.

Loan-to-value (LTV) - The percentage relationship between the amount of the loan and the market value.

-M-

Mortgagee - The lender in a mortgage agreement

Mortgagor - The borrower in a mortgage agreement

-N-

Note - A legal document that obligates a borrower to repay a mortgage loan at a stated interest rate during a specified period of time.

Note rate - The interest rate stated on a mortgage note.

Notice of default - A formal written notice to a borrower that a default has occurred and that legal action may be taken.

-O-

Owner financing - A property purchase transaction in which the property seller provides all or part of the financing.

-P-

Parcel - a tract or plot of land

Plat - a plan, map, or chart of a piece of land with actual or proposed features (as lots); also : the land represented.

Principal - The amount borrowed or remaining unpaid. The part of the monthly payment that reduces the remaining balance of a mortgage.

Principal balance - The outstanding balance of principal on a mortgage. The principal balance does not include interest or any other charges.

Promissory note - A written promise to repay a specified amount over a specified period of time.

Purchase agreement - A written contract signed by the buyer and seller stating the terms and conditions under which a property will be sold.

-Q-

Quitclaim - to release or relinquish a legal claim to; especially : to release a claim to or convey by a quitclaim deed.

Quitclaim deed - A deed that transfers without warranty whatever interest or title a grantor may have at the time the conveyance is made.

-S-

Settlor - The person who actually creates a trust by donating property to be managed and administered by a trustee but from which all profits would go to a beneficiary. The law books of some countries refer to this person as a "donor."

Survey - A drawing or map showing the precise legal boundaries of a property, the location of improvements, easements, rights of way, visible encroachments, and other physical features.

-T-

Title - A legal document evidencing a person's right to or ownership of a property.

Title company - A company that specializes in examining and insuring titles to real estate.

Title insurance - Insurance that protects the lender (lender's policy) or the buyer (owner's policy) against loss arising from disputes over ownership of a property.

Title search - A check of the title records to ensure that the seller is the legal owner of the property and that there are no liens or other claims outstanding.

Transfer of ownership - Any means by which the ownership of a property changes hands. Lenders consider all of the following situations to be a transfer of ownership: the purchase of a property "subject to" the mortgage, the assumption of the mortgage debt by the property purchaser, and any exchange of possession of the property under a land sales contract or any other land trust device.

-W-

Warranty Deed - a deed warranting that the grantor has a good title free and clear of all liens and encumbrances and will defend the grantee against all claims.