Encumbrance: Any interest, right, lien or liability attached to a parcel of land (such as unpaid taxes or an unsatisfied mortgage) that constitutes or represents a burden upon the property.
Equity: The market value of real property, less the amount of existing liens.
Escrow: Closing a real estate transaction when all required documents and funds are in place with a third party for processing and disbursement.
Execute: To sign a legal instrument. A deed is said to be executed when it is signed, sealed, witnessed and delivered.
Federally-Insured Loan: A mortgage loan that originates in a federally-insured government program like the Federal Housing Authority (FHA).
Foreclosure: A legal proceeding following a default by a borrower in which real estate secured by a mortgage of deed of trust is sold to satisfy the underlying debt.
Instrument: A written document.
Judgment: The decision of a court regarding the rights of parties in an action.
Junior Mortgage: A mortgage lower in lien priority than another. For example, a second mortgage or home equity line.
Lawsuit: A dispute between two or more parties that has been filed in the court system by one of them.
Lien: A monetary charge imposed on a property, usually arising from some debt or obligation.
Lis Pendens: A recorded legal notice that there is litigation pending relating to the land, and a warning that anyone obtaining an interest subsequent to the date of the notice by be bound by the judgment.
Market Value: The average of the highest price that a buyer would pay and lowest price a seller would accept.
Mortgage: A conditioned pledge of property to a creditor as security for the payment of a debt.
Note (also called a Promissory Note): A written promise to pay a sum of money, usually at a specified interest rate, at a stated time to a named payee.
Power of Attorney: A written instrument by which one person, the principal, authorizes another, the attorney-in-fact, to act on his or her behalf.
Principal: A sum of money owed as a debt on which interest is payable.
Public Records: Records which by law disclose constructive notice of matters relating to the land.
Real Estate (also called Real Property): Land and anything permanently affixed to the land such as buildings, fences, and those things attached to the buildings, such as plumbing and heating fixtures, or other such items that would be personal property if not attached.
Recording: The noting in a public office of the details of a legal document, such as a deed or mortgage, affecting the title to real estate.
Redemption: The right of the owner in some states to reclaim title to property if he or she pays the debt to the mortgagee within a stipulated time after foreclosure.
Release: To relieve from debt or security or abandon a right, such as release of a mortgage lien from a part or all of the land mortgaged.
RESPA: The Real Estate Settlement Procedures Act (12 U.S.C. 2601 et.seq.) that, together with Regulation X promulgated pursuant to the Act, regulates real estate transfers involving a “federally-related mortgage loan” by requiring, among other things, certain disclosures to borrowers.
Satisfaction: An instrument releasing the lien of a mortgage.
Senior Lien or Mortgage: If there is more than one lien on land, those liens are ranked by priority. A senior lien or mortgage is entitled to be paid first in foreclosure or bankruptcy, before a junior lien.
Tenant: One who has right of possession of land by any kind of title.
Title Defect: Any possible or patent claim or right outstanding in a chain of title that is adverse to the claim of ownership.
Title Insurance Policy: A contract of title insurance under which the insurer, in keeping with the terms of the policy, agrees to indemnify the insured against loss arising from claims against the insured interest. Trustee: Person or entity who is given the legal authority to manage money or property on behalf of somebody else. In a foreclosure action, this is often the title company.
Trustor: A person who creates a trust by transferring property to a trustee. When a borrower signs the Deed of Trust, the borrower becomes a trustor.
Satisfaction: An instrument releasing the lien of a mortgage.
Senior Lien or Mortgage: If there is more than one lien on land, those liens are ranked by priority. A senior lien or mortgage is entitled to be paid first in foreclosure or bankruptcy, before a junior lien.
Tenant: One who has right of possession of land by any kind of title.
Title Defect: Any possible or patent claim or right outstanding in a chain of title that is adverse to the claim of ownership.
Title Insurance Policy: A contract of title insurance under which the insurer, in keeping with the terms of the policy, agrees to indemnify the insured against loss arising from claims against the insured interest. Trustee: Person or entity who is given the legal authority to manage money or property on behalf of somebody else. In a foreclosure action, this is often the title company.
Trustor: A person who creates a trust by transferring property to a trustee. When a borrower signs the Deed of Trust, the borrower becomes a trustor.