Title Insurance Dictionary-Glossary

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

A

Abstract
The notes made by a title examiner based on his examination of the land records. These notes are a concise summary of the transactions affecting the property. The title agency produces a BINDER from the information in the abstract.

Acceleration
The right of the mortgagee (lender) to demand the immediate repayment of the mortgage loan balance upon the default of the mortgagor (borrower), or by using the right vested in the Due-on-Sale Clause.

Acceleration Clause
A condition in a real estate financing instrument giving the lender the power to declare all sums owing lender immediately due and payable upon the happening of an event, such as the sale of the property, or a delinquency in the repayment of the note.

Accretion
The buildup of land from natural forces such as wind or water.

Acknowledgement
As a verb, the confirmation by a party executing a legal document that this is his signature and voluntary act. This confirmation is made to an authorized officer of the Court or notary public who signs a statement also called an acknowledgment.

Acre
43,560 square feet of land.

Adequate Protection Order
Forces trustees to release Post petition payments being held prior to the Chapter 13 Confirmation Hearing.

Adjustable Rate Mortgage (ARM)
Is a mortgage in which the interest rate is adjusted periodically based on a preselected index. Also sometimes known as the re negotiable rate mortgage, the variable rate mortgage or the Canadian rollover mortgage.

Adjustment Interval
On an adjustable rate mortgage, the time between changes in the interest rate and/or monthly payment, typically one, three or five years, depending on the index.

Administrator
A person appointed by the Court to settle the estate of a person who dies without a will. The feminine form is Administratrix. Compare, EXECUTOR.

Adverse Possession
A claim made against land titled in another person based on open, notorious and hostile possession and use of the land to the exclusion of the titled owner.

Agency
A relationship in which the agent is given the authority to act on behalf of another person (Principal).

Agent
Person who legally represents another, called a principal, from whom authority has been derived.

Agreement
A change to the correct or alteration to the original document/agreement without changing its principal essence.

Amortization
Means loan payment by equal periodic payment calculated to pay off the debt at the end of a fixed period, including accrued interest on the outstanding balance.

Amortized Loan
A loan to be repaid, interest and principal, by a series of regular payments that are equal or nearly equal, without any special balloon payment prior to maturity.

Amount Financed
The amount applied for less the prepaid finance charges. Prepaid finance charges can be found on the Good Faith Settlement Statement (HUD1 or HUD1A). For example, if the borrower's Note is for $100,000 and the prepaid finance charge total is $5,000, the Amount Financed would be $95,000. The Amount Finance is the amount on which the Annual Percentage The amount applied for less the prepaid finance charges. Prepaid finance charges can be found on the Good Faith Settlement Statement (HUD1 or HUD1A). For example, if the borrower's Note is for $100,000 and the prepaid finance charge total is $5,000, the Amount Financed would be $95,000. The Amount Finance is the amount on which the Annual Percentage Rate (APR) is calculated.

Annual Cap
The limit on the amount an adjustable rate mortgage's interest rate can change over a 12-month period. An annual cap prevents your payments from changing too dramatically, even if the factors that determine changes in an adjustable mortgage's rate rise or fall sharply during that period.

Annual Percentage Rate (A.P.R)
This is not the Note rate for which the borrower applied. It is an interest rate reflecting the cost of a mortgage as a yearly rate. This rate is likely to be higher than the stated note rate or advertised rate on the mortgage, because it takes into account points and other credit costs, such as private mortgage insurance, loan discount, origination fees, and other credit costs. The APR allows home buyers to compare different types of mortgages based on the annual cost for each loan.

Appraisal
An estimate of the value of property, made by a qualified professional called an appraiser. Most states require licenses. Various lenders have their own lists of approved appraisers.

Appraised Value
An opinion of value reached by an appraiser based upon knowledge, experience, and a study of pertinent data.

Approved Attorney
An attorney authorized by a title insurance company to handle closings and render title opinions.

Appurtenance
Anything attached to the land or used with it passing to the new owner.

Arbitrage
In mortgage banking, the simultaneous purchase and sale of mortgages, futures contracts, or mortgage backed securities in different markets to profit from differences in price.

Arm's Length Transaction
A transaction in which the parties involved are entirely independent of each other, deal with each other as strangers, and have no reason for collusion.

Assessed Value
The determination, for tax purposes, of how much a home and the property it occupies is worth.

Assessment
A local tax levied against a property for a specific purpose, such as a sewer or street lights.

Assign
To transfer interest.

Assignee
One who receives an assignment or transfer of rights. An assignment of a contract transfers the right to buy property.

Assignment of Mortgage
A document that evidences a transfer of ownership of a mortgage from one party to another.

Assignor
The one who assigns to another person.

Associate Broker
A person who has qualified as a real estate broker but works for a particular broker licensed in the state.

Assumption Agreement
The agreement between buyer and seller where the buyer takes over the payments on an existing mortgage from the seller. Assuming a loan can usually save the buyer money since this is an existing mortgage debt, unlike a new mortgage where closing cost and new, possibly higher, market-rate interest charges will apply.

Assumption Fee
The fee paid to a lender resulting from the assumption of a mortgage.

Assumption of a Mortgage
Assumption by a purchaser of the primary liability for a payment of an existing mortgage or deed of trust. The seller remains secondarily liable unless specially released by the lender.

Attachment
Seizure of property through Court process to repay a debt.

Attoryney in Fact
A type of agency relationship where one person holds a POWER OF ATTORNEY allowing him to execute legal documents on behalf of another. Decisions made by the attorney in fact are binding on the principal.

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z