Regions | Terms and Definitions

Regions Mortgage is dedicated to providing you will all of the information you may need in considering your new home purchase, refinance or home equity financing. Our Information Center provides you with an important resource to assist you in making the right decision.

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

- E -

Easement

A right created by grant, reservation, agreement, prescription, or necessary implication, which one has in the land of another. It is either for the benefit of land (appurtenant), such as right to cross A to get to B or "in gross," such as a public utility easement. Easement of Necessity

An easement granted by a court when it is determined that said easement is absolutely necessary for the use and enjoyment of the land. Commonly given to landlocked parcels. Egress

A term concerning a right to come and go across the land (public or private) of another. Usually part of the term ingress and egress. Encumbrance, Incumbrance

A claim, lien, charge, or liability attached to and binding real property. Any right to, or interest in, land which may exist in one other than the owner, but which will not prevent the transfer of fee title. Equitable Conversion

A legal fiction applied to a land contract which treats the vendee's (buyer's) interest as a real property interest even though the seller holds legal title, and the seller's interest as a security interest (personal property). This enables the buyer to act as the "owner" of the property without having "legal" title. Equitable Mortgage

(1) A lien against real property (mortgage) which is enforceable in a court of equity, but does not legally constitute a mortgage. (2) A deed given as security for a debt will be held to be a mortgage rather than a transfer of title. Also called a constructive mortgage. Equity

The value of a person's interest in real property after all liens and charges have been deducted. Equity Line Of Credit

A combination of a line of credit and equity loan. A maximum loan amount is established based on credit and equity. A mortgage (deed of trust) is recorded against the potential borrower's property for said maximum loan amount. The potential borrower has the right to borrow, as needed, up to the amount of the mortgage. Escalation Clause

A clause in a lease providing for an increased rental at a future time. May be accomplished by several types of clauses, such as (1) Fixed increase - A clause which calls for a definite, periodic rental increase. (2) Cost of living - A clause which ties the rent to a government cost of living index, with periodic adjustments as the index changes. (3) Direct expense - The rent is adjusted according to changes in the expenses of the property paid by the lessor, such as tax increases, increased maintenance costs, etc. Escrow

Delivery of a deed by a grantor to a third party for delivery to the grantee upon the happening of a contingent event, modernly, in some states, all instruments necessary to the sale (including funds) are delivered to a third (neutral) party, with instructions as to their use. Excess Condemnation

Taking by right of eminent domain, more property than actually necessary for the intended purpose. This happens frequently, the excess property being sold at auction after completion of the project. Exception

A provision in a title insurance binder or policy excludes liability for a specified title defect or an outstanding encumbrance. Exclusive Listing

A written contract between a property owner and a real estate broker, whereby the owner promises to pay a fee or commission to the broker it certain real property of the owner is sold during a stated period, regardless of whether the broker is or is not the cause of the sale. The broker promises to put forth his or her best efforts to sell the property, and may make specific promises as to advertising or other promotion in certain instances. Exposure

(1) The degree to which a property for sale, lease, etc., is made noticeable (exposed) to potential buyers, tenants, etc., through advertising, multiple listing groups, etc. (2) The direction in which a property faces. For example: Does a store depending on walk-in trade face the sun in the morning when people walk in the sun to get warm (eastern exposure), or face the sun in the afternoon when people walk in the shade to keep cool (western exposure). [back to top]

- F -

Fair Market Value

An appraisal term for the price which a property would bring in a competitive market given a willing seller and willing buyer, each of whom has a reasonable knowledge of all pertinent facts, with neither being under any compulsion to buy or sell. Fee Simple

An estate under which the owner owns a contract interest in the property and is entitled to the unrestricted enjoyment of the property, including the right to dispose property. Federal Deposit Insurance Corporation (F.D.I.C.)

The federal corporation which insures against loss of deposits in banks, up to a maximum amount. Federal Home Loan Banks

Banks created under the Federal Home Loan Bank Act of 1932, in order to keep a permanent supply of money available for home financing. The banks are controlled by the Federal Home Loan Bank Board. Savings and loans, insurance companies, and other similar companies making long term mortgage loans may become members of the Federal Home Loan Bank System, and thus may borrow from one of the regional banks throughout the country. Federal National Mortgage Association - Fannie Mae

Fannie Mae is one of the Government Sponsored Enterprises (GSE), yet receives no government funding or backing. It is a private company, owned by shareholders and chartered by Congress to purchase mortgages thereby making funds available to lenders. It does not lend directly to borrowers; rather it buys mortgages made by lenders. Fee

(1) Modernly, and not in strict legal terms, synonymous with fee simple or "ownership." (2) A charge made by a landlord to a tenant, which is not refundable. For example: A cleaning deposit would be refunded if the tenant left the rented property reasonably clean. A cleaning fee would be a charge by the landlord for cleaning the rented property and would not be refunded regardless of the condition of the property. FHA (Federal Housing Administration)

A federal agency which insures first mortgages, enabling lenders to loan a very high percentage of the sale price. Federal Home Loan Mortgage Corporation - Freddie Mac

Freddie Mac is one of the Government Sponsored Enterprises (GSE), receiving no government funding or backing. It is a stockholder-owned corporation chartered by Congress to increase the supply of funds that lenders could make available to borrowers. It does not lend directly to borrowers, but buys mortgages made to borrowers. Finance Charge

A total of all costs imposed directly or indirectly by the creditor and payable either directly or indirectly by the customer, as defined by the Federal Truth-In-Lending laws. Financial Statement

An accounting statement showing assets and liabilities of a person or company. Used generally for large loans or other instances when the credit report (history of payment of debts) in itself is not sufficient. Finder's Fee

A fee paid to someone who finds a buyer or property for a broker, buyer, etc. The term is sometimes used to attempt to pay a commission to an unlicensed person. Generally, a finder's fee is considered a commission and may only be paid to one who holds a real estate license. First Mortgage

A mortgage on property that is superior in position to any other mortgage. Fixed Rate Loan

A loan on which the same rate of interest is charged for the life of the loan. FNMA Buydown

FNMA (Federal National Mortgage Association) accepts loans containing a buy down provision on single family residential, owner occupied properties. A prepayment (points) will buy a lower rate of interest during the first one to five years of the loan. Restrictions apply as to the amount of the buydown and rise in payment amount as the loan progresses. Forfeiture

The taking of an individual's properly by a government, because the individual has committed a crime. In the United States, private property cannot be taken, except by eminent domain upon payment of just compensation, or for nonpayment of taxes. Full Disclosure

In real estate, revealing all the known facts which may affect the decision of a buyer or tenant. A broker must disclose known defects in the property for sale or lease. A builder must give to a potential buyer the facts of his new development (are there adequate school facilities? sewer facilities? (an airport nearby?, etc.). A broker cannot charge a commission to buyer and seller unless both know (disclosure) and agree. Future Acquired Property

Property acquired after a loan or sale. For example: A loan agreement may state that the loan is a lien on all property presently owned or which the borrower may acquire in the future. [back to top]

- G -

Garnishment

A legal proceeding under which a person's money in control of another (such as salary) is taken for payment of a debt. The amount which may be taken is set by statute (usually as a percentage), and, in most states, a judgment is necessary before garnishment. General Lien

(1) A lien such as a tax lien or judgment lien which attaches to all property of the debtor rather than the lien of, for example, a trust deed, which attaches only to specific property. (2) The right of a creditor to hold personal property of a debtor for payment of a debt not associated with the property being held. Must be done under an agreement since against general precepts of law. General Membership

A partnership made up of general partners,without special (limited) partners. GNMA (Government National Mortgage Association) Options

A method of purchasing GNMA securities through "puts" and calls." A GNMA Call Option is the right to buy GNMA securities at a specific yield for a specified time, A Put Option is the right to sell GNMA securities at a specific yield for a specified time. The buyer pays for the option and may exercise it, not exercise it, or sell it. Graduated Payment Mortgage

A mortgage, deed, or trust calling for increasingly higher payments over the term of the loan. This allows the buyer low beginning payments. The payments then increase as (theoretically) the buyer's earnings increase. Grantee

One to whom a grant is made. The purchaser of real property. Grantor

One who has made a grant. The seller of real property. Grantor Grantee Index

The record of the passing of title to all the properties in a county as kept by the county recorder's office. Property is checked by tracing the names of the sellers and buyers (chain of title). Title companies usually have more efficient methods by keeping records according to property description, rather than peoples names. Gross Income

The scheduled (total) income, either actual or estimated, derived from a business or property. Gross Income Multiplier

A figure which, when multiplied by the annual gross income, will theoretically determine the market value. A general rule of thumb which varies with specific properties and areas. Gross Lease

A lease which obligates the lessor to pay all or part of the expenses of the leased property, such as taxes, insurance, maintenance. utilities, etc. Guarantee

Agreement to pay the debt or perform the obligation of another in the event the debt is not paid or obligation not performed. Differs from a surety agreement in that there must be a failure to pay or perform before the guaranty can be in effect. [back to top]

- H -

Hidden Defect

An encumbrance on a title that is not apparent in the public records; for example, unknown heirs, secret marriages and forged instruments. Holdback

Portion of a loan held back by the lender until a contingency is met. In the sale of a home insured by VA or FHA., funds may be held back to make necessary improvements to bring the property to VA or FHA standards. The money to make these repairs may not be available until closing. One and one halt to double the estimated amount necessary is held back. If repairs are not made in the time allowed, these funds are used to make the repairs. In construction financing, funds are held back until, for example, a certain percentage of a subdivision has been sold, or a certain portion of a building has been constructed. Holder In Due Course

A holder of a check or note who takes, for value and in good faith, the note before it is overdue or the check without knowledge that it has bounced, if, in fact it has. Holding Period

The time period used by the IRS to determine along or short term capital gain. The period during which the taxpayer owns the capital asset. Homestead

The dwelling (house and contiguous land) of the head of a family. Some states grant statutory exemptions, protecting homestead property (usually to a set maximum amount) against the rights of creditors. Property tax exemptions (for all or part of the tax) are also available in some states. Statutory requirements to establish a homestead may include a formal declaration to be recorded. Home Warranty Insurance

Private insurance insuring a buyer against defects (usually in plumbing, heating, and electrical) in the home he has purchased. The period of insurance varies and both new and used homes may be insured. Hypothecate

To mortgage or pledge without delivery of the security to the lender. [back to top]

- I -

Impound Account

Account held by a lender for payment of taxes, insurance, or other periodic debts against real property. The mortgagor or trustor pays a portion of, for example, the yearly taxes, with each monthly payment. The lender pays the tax bill from the accumulated funds. Improvements

Generally, buildings, but may include any permanent structure or other development, such as a street, utilities, etc. Inchoate Instrument

An unrecorded instrument (such as a deed) which is valid only between the parties and those having actual notice, but not against "the world" as it would be after recording. Income Averaging

A method of figuring income tax by paying tax on the average income per year for the past five years. For example: A, a real estate salesperson, earns $10,000 taxable income for 4 years. In the fifth year, A sells a shopping center and earns $100,000 taxable income. A-could take the total income for 5 years ($140,000), divide by 5 ($28,000), and pay tax on $28,000 for the past 5 years, less what A has already paid. Increasing And Diminishing Returns

An economic theory that an increase in capital or manpower will not increase production proportionately (five workers may do less than five times the work of one worker; and two workers may do more than twice the work of one worker). When the increase in production is proportionately greater than the addition, there is an increasing return, when production is proportionately less than the addition, the return diminishes. Industrial Tax Exemption

An exemption from local property taxes granted to encourage industries to come into an area. Has been used successfully in the South. Usually granted for a definite period. Inheritance Tax

A tax on the transfer of property from a deceased person: based on the right to acquire the property rather than the property itself. Installment Contract

A method of purchasing by installment (usually monthly) payments. When referring to real property, it is usually called a land contract. Institutional Lenders

Banks, savings and loan associations, and other businesses which make loans to the public in the ordinary course of business, rather than individuals, or companies which may make loans to employees. Insured Mortgage

A mortgage insured against loss to the mortgagee in the event of default and a failure of the mortgaged property to satisfy the balance owing plus costs of foreclosure. May be insured by FHA, VA, or by private mortgage insurance companies. Interest Cap

The maximum interest rate increase of an Adjustable Mortgage Loan. An interest rate cap places a limit on the amount your interest rate can increase. Interest caps come in two versions:

Periodic caps, which limit the interest rate increase from one adjustment period to the next; and
Overall caps, which limit the interest rate increase over the life of a loan.

Interpleader

A court action which may be filed in an existing case to be the initial action. One holding funds which are in dispute, but not having an interest in the funds, would file an interpleader. For example: An escrow agent is holding a deposit of a buyer which funds both buyer and seller claim to be entitled. Escrow is willing to give the funds to either buyer or seller but does not want to be liable for giving the funds to the wrong party. The interpleader filed by the escrow agent asks the court to determine to whom the funds should be awarded. Interstate Land Sales

Sales of land to a buyer in another state. Because the buyer is usually totally dependent on the seller for information regarding the property, federal disclosure laws have been passed to aid the buyer. The buyer also has a period (now 3 days) after signing a purchase agreement, in which to rescind. The laws were passed because of the large promotional land sales of the 50's and early 60's, some of which sold worthless desert and swamp land. IRA (Individual Retirement Account)

Savings programs available to individuals. The plans allow for a certain amount to be deposited each year. This money is not subject to income tax for that year or following years as long as it is not withdrawn. The money is taxed as withdrawn upon retirement, usually when the depositor is in a lower tax bracket. During the life of the account, the money may be put into various interest bearing investments. Securities dealers as well as banking institutions now offer IRA'S. [back to top]

- J -

Joint Appraisal

An appraisal by more than one appraiser, but one which states common conclusions of all. Joint Tenancy

An undivided interest in property, taken by two or more joint tenants. The interests must be equal, accruing under the same conveyance, and beginning at the same time. Upon the death of a joint tenant, the interest passes to the surviving joint tenants, rather than to the heirs of the deceased. Judgment

The decision of a court of law. Money judgments, when recorded, become a lien on real property of the defendant . Judgment Lien

A lien against the property of a judgment debtor. An involuntary lien. Judgment Proof

One against whom a judgment creditor cannot collect (no assets). If one can show he was defrauded by a "judgment proof" real estate licensee, he may recover from the state fund in states having such a fund. Jumbo VA Loan

A loan for an amount greater than the allowable 100% financed amount. It is determined by subtracting the maximum allowable 100% financed amount from the purchase price and financing 75% of the difference. Example: maximum allowable VA Loan-$110,000. Sale price-$130.000. Difference $20,000: 75% of the difference is $15,000. Total jumbo loan-$110,000 plus $15.000 = $125,000. Required down payment-$5,000. [back to top]

- K -

Keogh Plan

A retirement plan whereby a self-employed person may set aside a certain portion of income (tax deferred) into a retirement account. The money is taxable upon withdrawal at retirement when the person's tax bracket is often lower. [back to top]

- L -

Landowner's Royalty

In oil and gas leases, the portion of the value of each barrel of oil which goes to the property owner. Land Residual Technique

An appraisal technique by which land value is determined by first determining the net return attributable to the building only, and deducting it from the total return to the property (may be estimated), the residual amount is capitalized to find the land value. The building value may be determined by construction costs (new building), depreciated construction costs (it only a few years old), or estimated present construction costs (if an older building). Late Charge

A penalty for failure to pay an installment payment on time. Usually not allowed as interest for tax deductions. May or may not be included as usury. If not, the amount of late charge is either set by statute or must be "reasonable." Lease With Option To Purchase

A lease under which the lessee has the right to purchase the property. The price and terms of the purchase must be set forth for the option to be valid. The option may run for the length of the lease or only for a portion of the lease period. Legal Description: A description by which property can be definitely located by reference to surveys or recorded maps. Sometimes referred to simply as the legal. Legal Owner

The term has come to be used as a technical difference from the equitable owner, and not as opposed to an illegal owner. The legal owner has title to the property, although the title may actually carry no rights to the property other than a lien. Lessee's Interest

In appraising the value of a lessees interest to determine the value of a potential sublease of assignment (sale) of the lease, the value is the market value of the property, less the interest of the lessor. The lessor's interest would be largely determined by the ratio of the return on the lease to the market value without the lease. Lien

A recorded document which claims an interest in real property as security for a debt owed. Such liability may be created by contract, such as a deed of trust, or by a court judgment. Lien Waiver (Waiver Of Liens)

For our purposes, a waiver of mechanic's lien rights, signed by subcontractors so that the owner or general contractor can receive a draw on a construction loan. Loan Ratio

The ratio, expressed as a percentage, of the amount of a loan to the value or selling price of real property. Usually, the higher the percentage, the greater the interest charged. Maximum percentages for banks, savings and loans, or government insured loans, is set by statute. Loan to Value Ratio

The ratio of the mortgage loan's principal to the property's appraised value or its sales price, whichever is lower. Long Term Capital Gain

Gain on the sale of a capital asset which has been held for a specified time or longer. Long term capital gain is taxed at a special rate and not as ordinary income. [back to top]

OPEN AN ACCOUNTLOCATE AN ATM / BRANCHABOUT REGIONSCONTACT USFAQs

Privacy and SecurityTerms and ConditionsCareersInvestor RelationsSite MapEn Español