Title Insurance Dictionary-Glossary

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P

Par
A situation where the face value of a mortgage (or bond) principal equals its actual selling price -- that is, with no discount or premium.

Parcel
A piece of land or property under one ownership. Parcels are created when a single large property is sub-divided into many smaller pieces of property.

Partition
The forced division of land among parties who were formerly co-owners. A partition suit may ask to divide the land or if that is not practical, sell the land and divide the proceeds.

Pay-Off Amount
A total balance, mount of a full payment on existing loan or lien.

Pay-Off Schedule
The dollar figure in the Payment Schedule represent the principal, interest, plus Private Mortgage Insurance (if applicable) over the life of the loan. These figures will not reflect taxes and insurance escrows or any temporary buydown payments contributed by the seller.

Per Diem Interest
Interest charges that cover the period of time—usually a matter of days, or a few weeks—between when you close on your home, and the first day of the first month of your regular loan payments.

Permanent Loan
A long term mortgage, usually ten years or more. Also called an end loan.

Piggyback Financing
Two different mortgagors participating in the same loan.

Pipeline
Term used to express loan applications in process up until closing or until the mortgage is sold; used when analyzing mortgage loan inventory or commitment coverage.

Pipestem Lot
A lot connected to a public street by a narrow strip of land. Usually several adjacent pipestems are combined to form one driveway with each owner having a mutual-reciprocal easement to use and maintain the driveway to the street.

PITI
Principal, Interest, Taxes and Insurance. Also called monthly housing expense.

Pledged Account Mortgage (PAM)
Money is placed in a pledged savings account and this fund plus earned interest is gradually used to reduce mortgage payments.

Plot
A map showing the division of piece of land with lots, streets and, if applicable, common area.

Power of Attorney
A written document authorizing another to act on his behalf as an ATTORNEY IN FACT. One does not need to be a licensed attorney to act as an attorney in fact but, power of attorney forms are powerful legal documents that should be used only under advice of a licensed attorney at law.

Pre-Approval
A way you can establish your ability to get a home loan worth a certain amount of money, even before you've found the home you want to buy. The pre-approval process is done in conjunction with a specific lender; the results are based on the total income of your household, the amount of your monthly debt, as well as other factors—depending on your situation as a home buyer.

Pre-Foreclosure Short Sale
Mortgagor may sell the secured property for an amount that will produce insufficient proceeds to pay the mortgagee in full. The Mortgagee agrees to accept a payoff which is short of the full amount in lieu of incurring the expense and time of foreclosing. Pre-foreclosure Short Sales are usually the product of a reduced market value.

Prepaid Expenses
Necessary to create an escrow account or to adjust the seller's existing escrow account. Can include taxes, hazard insurance, private mortgage insurance and special assessments.

Prepaid Finance Charge
Certain charges made in connection with the loan and which must be paid upon closing. The charges are defined by the Federal Reserve Board in Regulation Z and the charges must be paid by the borrower. Examples include, loan origination fees, points, PMI, and tax service fees. Prepaid finance charges are totaled and then subtracted from the Loan Amount. The net figure is the amount financed.

Prepayment
A privilege in a mortgage permitting the borrower to make payments in advance of their due date.

Prepayment Clause
A condition written into a mortgage that gives a borrower the privilege of paying off a loan in full before the final scheduled payment date. The borrower usually must agree to pay a pre-determined fee to do so.

Prepayment Penalty
An additional charge imposed by the lender for paying off a loan before the due date. Prepayment penalties are allowed in some form (but not necessarily imposed) in many states.

Primary Mortgage Market
Lenders making mortgage loans directly to borrower's such as savings and loan associations, commercial banks, and mortgage companies. These lenders sometimes sell their mortgages into the secondary mortgage markets such as to FNMA or GNMA, etc.

Prime Rate
The most favorable interest rate charged by lenders on a short term loans to qualified customers.

Principal
The amount of debt, not counting interest, left on a loan.

Private Mortgage Insurance (PMI)
In the event that you do not have a 20 percent down payment, lenders will allow a smaller down payment
as low as 3 percent in some cases. With the smaller down payment loans, however, borrowers are usually required to carry private mortgage insurance. Private mortgage insurance will usually require an initial premium payment and may require an additional monthly fee depending on you loan's structure.

Pro Forma Statement
Latin word meaning according to form; a projection of anticipated income, expenses, and cash flow from an investment enterprise.

Probate
Court process to prove a valid will.

Promissory Note
A written unsecured note promising to pay a specified amount of money on demand, transferable to a third party.

Property Preservation
Taking adequate steps to preserve a vacated property from casual entry and inclement weather such as changing locks, repairing/replacing/boarding windows or doors, fixing leaking roofs and general maintenance and upkeep.

Prorate
To divide in proportionate shares, such as taxes, insurance, rent, or other items which the buyer and seller share as of the time of closing, or other agreed upon time.

Prospectus
A proposal or offering in conjunction with the sale of improved or unimproved property that outlines all aspects of the offer. Regulations of the Securities and Exchange Commission require many real estate offerings to be described by a detailed prospectus.

Public Records
The documents that are evidence of real estate transactions, which are usually stored at the county courthouse and are accessible, by law, to the general public.

Public Sale
Sale, auction open to the public.

Punch List
A written inventory of things that need to be done to a home in order to meet the requirements of a sales contract.

Purchase Agreement
An unconditional sales contract that defines the terms and conditions under which real property is conveyed.

Purchase Capital
The total amount of money a person uses to buy a home, regardless of the source.

Purchase Money Mortgage (PMM)
Seller financing as a part of the purchase price.

Put
An option to sell a specific security at a specified price within a designated period.

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