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

- S -


Savings And Loan Association

Originally an association chartered to hold savings and make real estate loans. Federally insured and regulated. Active in long term financing rather than construction loans. Recent changes in federal controls have enabled these associations to offer checking accounts, consumer loans, and other services traditionally offered by banks.

Secondary Financing

A loan secured by a mortgage or trust deed, which lien is junior (secondary) to another mortgage or trust deed.

Secondary Mortgage Market

The buying and selling of first mortgages of trust deeds by banks, insurance companies, government agencies, and other mortgagees. This enables lenders to keep an adequate supply of money for new loans. The mortgages may be sold at full value (par) or above, but are usually sold at discount. The secondary mortgage market should not be confused with second mortgage.

Second Mortgage

A mortgage which ranks after a first mortgage in priority. Properties may have two, three, or more mortgages, deeds of trust, or land contracts, as liens at the same time. Legal priority would determine whether they are called a first, second, third, etc. lien.

Shared Appreciation

The gaining or retaining of equity in a property by someone other than the buyer. For example: the seller retains a 25% interest in the property. This makes the buyer responsible for only 75% of the purchase price and, therefore, lowers the necessary financing by 25%. This obviously makes the property more affordable. By agreement, expenses are shared as well as any increase in value when the property is sold. Statement of Information (SI): A confidential information statement completed by the buyer, seller and borrower in every transaction where a policy or policies of title insurance are requested. Allows the title company to competently search documents affecting the property to be insured, documents which may not refer to said property. Allows title companies to differentiate between parties with similar names when searching matters such as liens and court decrees.

"Subject To" Clause

A clause in a deed, stating that the grantee takes title "subject to" an existing mortgage. The original mortgagor is alone responsible for any deficiency, should there be foreclosure of the mortgage. Differs from an "assumption" clause, whereby the grantee "assumes" and agrees to pay the existing mortgage.

Sweat Equity

A program which allows a purchaser to do work on the property in place of all or part of the down payment and other costs of purchase.

Subordination Agreement

An agreement under which a prior or superior lien is made inferior or subject to an otherwise junior lien.

Survey

The measurement of the boundaries of a parcel of land, it's area, and sometimes its topography.

[back to top]

- T -


Take Out Commitment

Agreement by a lender to place a long term (take out) loan on real property after completion of construction.

Tax Base

The assessed valuation of real property, which is multiplied by the tax rate to determine the amount of tax due.

Tax Deed

(1) Deed from tax collector to governmental body after a period of non-payment of taxes according to statute. (2) Deed to a purchaser at a public sale of land taken for delinquent taxes. The purchaser receives only such title as the former owners had and strict procedures must be followed to prevent attachment of prior liens.

Tax Lien

A statutory lien imposed against real property for nonpayment of taxes.

Tenancy In Common

An undivided ownership in real estate by two or more persons. The interests need not be equal. and, in the event of the death of one of the owners, no right of survivorship in the other owners exists.

Tenant At Will

One who holds possession of premises by permission of the owner or landlord, but without agreement for a fixed term of possession.

Title Plant

The information warehouse of a fide company in which it has accumulated and is constantly updating records of properties in its area which it can use to search title to real property.

Title Policy

A title insurance policy insuring a mortgagee, or beneficiary under a deed of trust, against loss caused by invalid title in the borrower, or loss caused by invalid title in the borrower, or loss of priority of the mortgage or deed of trust.

Townhouse

Originally a house in a city as opposed to a country estate. More recently the term is applied to certain types of row houses, whether planned unit developments or condominiums.

Transfer Tax

State tax on the transfer of real property. Based on purchase price or money changing hands. Check statutes for each state. Also called documentary transfer tax.

Treasury Bills

Interest bearing U.S. Government obligations sold at a weekly sale. The change in interest rates paid on these obligations is frequently used as the Rate Index of Adjustable Mortgage Loans.

Trustee

A person who holds title in trust for the benefit of another. In a deed of trust, the trustee is the person named to hold title in trust for the benefit of the lender until the loan is paid off.

Trustee In Bankruptcy

One appointed by a bankruptcy court, and in whom the property of the bankrupt vests. The trustee holds the property in trust, not for the bankrupt, but for the creditors.

Trustor

The borrower under a deed of trust. One who deeds their property to a trustee as security for repayment of a loan.

[back to top]

- U -


Unavoidable Cause

A cause which reasonable prudence and care could not have prevented, such as death, illness, papers lost in the mail, etc.

Underlying Financing

A mortgage, deed of trust, etc., prior to (underlying) a land contract, mortgage, etc , on the same property.

Undisclosed Principal

A principal whose identity is not revealed by an agent.

Uniform Laws

Laws approved by the National Conference of Commissioners on Uniform State Laws. Many have been adopted in one or more states. Among these are the Uniform Commercial Code, Uniform Negotiable Instruments Act, Uniform Partnership Act, Uniform Residential Landlord and Tenant Act, etc.

Uniform Settlement Statement

The Standard HUD Form 1 required to be given to the borrower, lender and seller at, or prior to, settlement.

Unilateral Contract

A contract under which one party expressly makes a promise, the other party, although making no reciprocal promise, may be obligated by law or may have already given consideration.

Unmarketable Title

Title which contains defects that would allow a purchaser to be released from his obligation to purchase.

Unrecorded Instrument

A deed, mortgage, etc., which is not recorded in the county recorder's office and, therefore, not protected under recording statutes. Valid between the parties involved, but not against innocent third parties.

Useful Life

(1) In appraisal for sale purposes, the true economic value of a building in terms of years of use to the owner. (2) For tax purposes, the life set for depreciation. At any time during that period, a new life could begin for a new owner.

[back to top]

- V -


Vacancy Factor

The estimated percentage of vacancies in a rental project. May be based on past records of the property, or a professional guess if a new project. Surrounding area buildings, it similar, may be used for comparison.

Variable Interest Rate

An interest rate which fluctuates as the prevailing rate moves up or down. In mortgages there are usually maximums as to the frequency and amount of fluctuation. Also called "flexible interest rate."

Veneered Construction

The placing of a facing material over the external surface of a structure.

Vesting

Denotes the manner in which title is held. Examples of common vestings are: Community Property, Joint Tenancy and Tenancy in Common.

Vital Statistics

Data regarding births, deaths, marriages, health records, etc., and usually kept by a governmental bureau. Federally, the Bureau of Vital Statistics.

Voluntary Lien

A lien placed against real property by the voluntary act of the owner. Most commonly, a mortgage or deed of trust.

[back to top]

- W -


Waive

To knowingly abandon, relinquish, or surrender a right, benefit, or claim.

Warranty

A legal, binding, promise, given at the time of a sale, whereby the seller gives the buyer certain assurances as to the condition of the property being sold. Warranties as to real property have taken on a lessor role with the increase of the use of title insurance.

Warranty Deed

A deed used in many states to convey fee title to real property. Until the wide spread use of title insurance, the warranties by the grantor were very important to the grantee. When title insurance is purchased, the warranties become less important as a practical means of recovery by the grantee for defective title.

Without Recourse

A finance term. A mortgage or deed of trust securing a note without recourse allows the lender to look only to the security (property) for repayment in the event of default, and not personally to the borrower.

[back to top]

- X -


[back to top]

- Y -


Yield

Ratio of income from an investment to the total cost of the investment over a given period of time.

[back to top]

- Z -


Zero Lot Line

The construction of a building on any of the boundary lines of a lot. Usually built on the front line such as a store built to the sidewalk.

Zero Side Yard

The building of a subdivision with each house built on a side boundary line. This gives more usable yard space on narrow lots. An easement for maintenance is given over a portion of the lot adjoining each house.

Zone

(1) An area of a county or city in which the use of the land is restricted by law (zoning ordinance). (2) An area designated by a number for the delivery of mail. Zip codes incorporate the zones.

[back to top]