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.

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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.
Settlement Cost
    Money paid by borrowers and sellers to effect the closing of a mortgage loan, including payments for title insurance, survey, attorney fees, and such prepaid items as taxes and insurance escrow.
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.
Short Sale
    A workout program wherein the lender accepts less than the total payoff amount.
"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.
Subordination Agreement
    An agreement under which a prior or superior lien is made inferior or subject to an otherwise junior lien.
    The measurement of the boundaries of a parcel of land, it's area, and sometimes its topography.
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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 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.
    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.
    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.

Truth-In-Lending Act (TILA)

    Federal law which requires a truth-in-lending statement to be disclosed for consumer loans. This statement would include disclosure of the annual percentage rate, or APR, as well as other facets of the mortgage program. The law also requires the right of recission period which follows the closings of refinances.
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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.

Universal Residential Appraisal Report (URAR)

    The appraisal form which is utilized by appraisers of residential properties to estimate the value or properties to be financed with FHA, VA and conventional mortgages.
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.
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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."

Verification of Deposit (VOD)

    A form that requests and secures verifications of amounts on deposit at financial institutions. When a depository institution is also the applicant’s creditor, the VOD verifies the obligation.

Verification of Employment (VOE)

    A form that requests and secures documentation of a mortgage applicant’s work history and/or occupation, to assist in the lender’s credit investigation.

Verification of Mortgage (VOM)

    A form that requests and secures verification of payments made on an applicants current or past mortgage.
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.
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- W -

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


    An alternative action to foreclosure for the benefit of the lender and the borrower. Includes loan modification, short sales and various forms of forbearance. Also called “re-structure”.

Workout Agreement

    A plan between the lender and borrower to bring a delinquent or defaulted mortgage current.
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.
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    Ratio of income from an investment to the total cost of the investment over a given period of time.
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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.
    (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.

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