Abstract (of title) - A summary of the conveyances, transfers and other facts appearing of record and relied upon as evidence of title to real property.
Access Right - A landowner's right to have ingress to and egress from the property to a public street.
Adverse Possession - Claim of ownership of property based upon open and hostile possession and occupancy.
Administrator - Person appointed by a court to take possession of property of a person who died without leaving a will, to pay debts and to distribute the property to those entitled to it according to law.
Affidavit - A written statement or declaration, sworn to before an officer who has authority to administer an oath.
A.L.T.A. (American Land Title Association) - An organization, composed of title insurance companies, which has adopted certain insurance policy forms to standardize coverage on a national basis.
Assessed Value - Value placed upon property for property tax purposes by the tax assessor.
Assessment - (1) The estimating of value of property for tax purposes. (2) A levy against property in addition to general taxes. Usually for improvements such as streets, sewers, etc.
Assignment - When ownership of your mortgage is transferred from one company or individual to another, it is called an assignment.
Attorney in Fact - Agent who holds the power of attorney allowing him or her to transact business and execute legal documents on behalf of a principal. Decisions made and actions taken by an attorney in fact (within the scope of his or her authority) are legally binding on the principal. An attorney-in-fact need not be an attorney-at-law.
Beneficiary - One for whose benefit a trust is created.
Binder or Commitment - A report issued by a title insurance company setting forth the condition of title to certain property as of certain date, and also setting forth conditions which, if satisfied, will cause a policy of title insurance to be issued. Also called a commitment.
Building (Restriction) Line or Setback - A building setback or building setback line on a survey, site plan or plat in regards to land development is the distance the building is setback from a street, alley, property line or road. Building setbacks are set up by land developers and local Planning and Zoning Offices and are different for every subdivision.
Chain of Title - An analysis of the chronological transfers of title to a specific piece of property.
Chattel - An item or article of personal property.
Closing - In real estate sales, the final procedure in which documents are executed and/or recorded, and the sale (or loan) is completed.
Closing Costs - Expenses incidental to the sale or refinance of real estate, such as loan fees, title fees, appraisal fees, etc.
Collateral - Property pledged as security for a debt. In a home loan, the property is the collateral. The borrower risks losing the property if the loan is not repaid according to the terms of the mortgage or deed of trust.
Commitment - (1) Title insurance term for the preliminary report issued before the actual policy. Said report shows the condition of title and the steps necessary to complete the transfer of title as contemplated by buyer and seller. (2) A written promise to make or insure a loan for a specified amount and on specified terms.
Condominium - A structure of two or more units, the interior space of which are individually owned; the balance of the property (both land and building) is owned in common by the owners of the individual units. The size of each unit is measured from the interior surfaces (exclusive of paint or other finishes) of the exterior walls, floors, and ceiling. The balance of property is called the common area.
Condominium Declaration - A Condominium Declaration, also sometimes known as Master Deed, is a fundamental document that establishes the existence of and further governs the use and maintenance of a condominium property. It is regulated by the Condominium Act and it includes legal descriptions of the condominium and of each individual unit, the nature and scope of the development project (when applicable), and several provisions regarding the use of the condominium units and common areas.
Construction Disbursement Service – A direct payment plan for disbursement of loan and equity funds to pay for construction improvements as completed, inspected, and approved.
Construction Loan - Short term financing of real estate construction to pay for construction improvements. This is sometimes referred to as “Temporary Financing”. We generally refer to this as a “Construction Setup”. Upon completion of construction improvements, it is generally followed by a separate loan taken out referred to as “Permanent Financing” – see Construction Permanent Financing.
Construction to Perm Loan - a single-close loan that starts as a construction loan where money is drawn as needed to pay building costs for construction improvements, then converts to a permanent mortgage upon the completion of the home. This is sometimes referred to as a “Construction One Time Close Loan”. We generally refer to this as an “All In One”
Construction Permanent Financing – A loan secured by the land and improvements after the improvements have been completed. This is sometimes referred to as “Permanent Financing” We generally refer to this as an “End Loan”.
Contract of Sale - An agreement entered into for the sale and purchase of property.
Conveyance - Transfer of title or an interest in land. Includes most instruments by which an interest in real estate is created, mortgaged, or assigned.
Covenant - An agreement between the parties in a deed whereby one party promises either (1) the performance or non-performance of certain acts with respect to the land or (2) that a given state of things with respect to the land are so; e.g., covenant that the land will be used for residential purposes.
Date Down - The date a title examination is to be brought down to from the date of the last examination. Generally, the date of recording of instruments and documents in the Recorder's Office.
Declaration of Trust - A written instrument by a person (settlor-trustor), acknowledging that he or she holds title to property (as trustee) for the benefit of another or others (beneficiary/ beneficiaries).
Deed - Written document transferring title to land from one person to another.
Deed In Lieu of Foreclosure – A deed given by the owner/borrower to a lender to prevent the lender from bringing foreclosure proceedings.
Default - Omission or failure to fulfill a duty, observe a promise, discharge an obligation, or perform an agreement.
Discount Points - a sum of money paid by the borrower or home buyer to the lender of their mortgage to decrease the interest rate
Draw - Disbursement of a portion of the mortgage loan or equity funds to pay for partial advances as improvements to the property progress
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 the right to cross parcel A to get to B, or "in gross", such as public utility easement.
Eminent Domain - The right of a government to take private property for public use upon payment of its fair market value.
Encroachment - Generally, construction onto the property of another, such as a wall, fence, building, etc.
Encumbrance - 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.
End Loan - The "permanent" (long term) financing of real estate after completion of construction.
Endorsement - As to a title insurance policy, a rider or attachment forming a part of the insurance policy expanding or limiting coverage.
Equity - (1) A legal doctrine based on fairness, rather than strict interpretation of the letter of the law. (2) The market value of real property, less the amount of existing liens. (3) Any ownership investment (stocks, real estate, etc.) as opposed to investing as a lender (bonds, mortgages, etc.)
Escrow - Delivery of a deed from a Grantor, funds, and/or documents to a Neutral Third Party, with instructions as to their use and disbursement.
Estate - The ownership interest of an individual in real property. The sum total of all the real property and personal property owned by an individual.
Examination of Title - The process of determining the vesting of title, and encumbrances burdening land.
Exception - A deduction, subtraction or exclusion.
Exclusion - Those general matters affecting title to real property excluded from coverage of a title insurance policy.
Executor - A person named in a will to administer an estate. The court will appoint an administrator if no executor is named. "Executrix" is the feminine form.
Fannie Mae (FNMA) - The Federal National Mortgage Association, which is a congressionally chartered, shareholder-owned company that is the nation's largest supplier of home mortgage funds.
Fee Simple - Absolute ownership. An estate under which the owner is entitled to unrestricted powers to dispose of the property, and which can be left by will or inherited.
FHA (Federal Housing Administration) – A federal agency which insures first mortgages, enabling lenders to loan a very high percentage of the sale price.
FHLMC (Federal Home Loan Mortgage Corporation a/k/a Freddie Mac) – is a government-sponsored enterprise that purchases, guarantees, and securitizes home loans.
Fixture – Personal property that becomes real property when attached in a permanent manner to real estate.
Foreclosure – The legal process by which a borrower in default under a mortgage is deprived of his or her interest in the mortgaged property. This usually involves a forced sale of the property at public auction with the proceeds of the sale being applied to the mortgage debt.
General Warranty Deed – A deed in which the grantor fully warrants good clear title to the premises. Used in most real estate deed transfers, a general warranty deed offers the greatest protection of any deed.
GNMA (Ginnie Mae) – Government National Mortgage Association. A federal association, working with FHA, which offers special assistance in obtaining mortgages and purchases mortgages in a secondary capacity.
Grantee – The person acquiring title to real property by a deed.
Grantor – The person transferring title to real property by a deed.
Heir – The person who, at the death of the owner of land, is entitled to the land if the owner has died without a will.
Homestead – A dwelling with its land and buildings occupied by the owner(s) as a fixed residence.
HUD (the Department of Housing and Urban Development) – the United States federal department that administers federal programs dealing with better housing and urban renewal; created in 1965
I.L.T.A (Illinois Land Title Association) – The Illinois Land Title Association is a statewide organization focused on providing professional level education and government advocacy to companies in the business of insuring titles to real estate. These activities provide a consortium of value-added services and industry networking that expands ILTA member standing within the community of the real estate market, while at the same time, protecting the consumer on what perhaps is their single most important purchase.
Insurable Title – A land title which a title company is willing to insure.
Interest – A share of, right to or concern in something of Value; also, a premium paid for the use of money
Intestate – Without leaving a will, or leaving an invalid will, so that the property of the estate passes by the laws of succession rather than the direction of the deceased.
Joint Protection Policy – A policy of title insuring more than one interest. I.E. the interest of both the owner and the lender.
Joint Tenancy – A form of ownership or taking title to property which means each party owns the whole property and that ownership is not separate. In the event of the death of one party, the survivor owns the property in its entirety.
Judgment – The decision of a court of law. Money judgments, when recorded, become a lien on real property of the defendant.
Junior Lien – A lien which is subordinate to a prior lien.
Leasehold Interest – Having possession of a property by virtue of a Lease.
Legal Description – A method of geographically identifying a parcel of land, which is acceptable in a court of law.
Lien – A legal claim against a property for money, either voluntary or involuntary, that must be paid off when the property is sold.
Lien Waiver (Waiver of Liens) – For our purposes, it is a document completed by a general contractor, subcontractor, material supplier, or service provider that releases a claim of a mechanics lien right to a specific property.
Life Estate - An estate in real property for the life of a living person.
Lis Pendens - A legal notice recorded to show pending litigation relating to real property, and giving notice that anyone acquiring an interest in said property subsequent to the date of the notice may be bound by the outcome of the litigation.
Loan 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 of priority of the mortgage or deed of trust.
Marketable Title - also known as Merchantable Title is title that can be readily marketed (sold) to a reasonably prudent purchaser aware of the facts and their legal meaning concerning liens and encumbrances.
Master Deed – See Condominium Declaration.
Mechanic's Lien - A lien created by statute for the purpose of securing priority of payment for the price or value of work performed and materials furnished in construction or repair of improvements to land, and which attaches to the land as well as the improvements.
Mortgage - (1) To hypothecate as security, real property for the payment of a debt. The borrower (mortgagor) retains possession and use of the property. (2) The instrument by which real estate is hypothecated as security for repayment of a loan.
Mortgage Policy - See Loan Policy.
Mortgagee - The lender in a mortgage agreement.
Mortgagor - The party executing a mortgage.
Note - A legal document that obligates a borrower to repay a mortgage loan at a stated interest rate during a specified period of time.
Open-End Mortgage - An open-end mortgage is a type of mortgage that allows the borrower to increase the amount of the mortgage at a later time. Open-end mortgages permit the borrower to go back to the lender and borrow more money if certain conditions have been met. There is usually a set dollar limit on the additional amount that can be borrowed.
Owner's Policy - Title insurance for the owner of the property, rather than a lien holder.
Partition - (1) Any division of real or personal property between co-owners, usually by a legal proceeding, resulting in individual ownership of the interest of each. (2) A wall, sometimes moveable and not load-bearing, used to divide a room or building.
Permanent Financing – This is a long term loan.
Planned (Unit) Development - A subdivision of five or more individually owned lots with one or more other parcels owned in common or with reciprocal rights in one or more other parcels.
Plat (Plat Map) - A map dividing a parcel of land into lots, as in a subdivision.
Power of Attorney - An authority by which one person (principal) enables another (agent/attorney in fact) to act for him or her. (1) General power -- Authorizes sale, mortgaging, etc. of all property of the principal. Invalid in some jurisdictions. (2) Special Power -- Specifies property and powers.
Prepayment Penalty - A penalty under note, mortgage, or deed of trust, imposed when the loan is paid before it is due.
Priority - The relative superiority of competing liens and encumbrances.
Probate - Relating to proof; the proof of validity of a will of a decedent; the proof of ownership.
Public Records - Usually at a county level, the records of all documents, which are necessary to give, notice. The records are available to the public. All transactions for real estate sales should be recorded.
Purchase Money Mortgage - A mortgage issued to the borrower for a purchase transaction where all funds are used for the purchase of the property with no refund or additional debt being paid.
Quitclaim Deed - A deed operating as a release; intended to pass any title, interest, or claim, which the grantor may have in the property, but not containing any warranty of a valid interest or title in the grantor.
Recording - The noting in the registrar’s office of the details of a properly executed legal document, such as a deed, a mortgage note, a satisfaction of mortgage, or an extension of mortgage, thereby making it a part of the public record.
Release - An instrument releasing property from the lien of the mortgage, judgment, etc. When a trust deed is used, the instrument is called a reconveyance.
Restriction - Most commonly used to describe a use or uses prohibited to the owner of land. Restrictions are set forth by former owners in deeds or in the case of a subdivision, a declaration of restrictions is recorded by the developer. A limitation on use of the property by law (zoning ordinances) may also be termed a restriction.
Right of Way – a right to pass over or to cross a parcel of land.
Setback – See Building Line.
Settlement Statement - A statement prepared by escrow giving a complete breakdown of costs involved in a real estate sale.
Special Warranty Deed - A special warranty deed is a real estate deed by which the seller only warrants or guarantees the title against defects in clear title that may have arisen during the period of its tenure or ownership of the property. The grantor of a special warranty deed does not provide a warranty or guarantee against any defects in clear title that existed prior to its ownership. A special warranty deed is an exception to the more commonly issued general warranty deed.
Subdivision - A housing development that is created by dividing a tract of land into individual lots for sale or lease.
Subordination - The procedure of allowing a new loan or obligation to take priority over an existing encumbrance.
Survey - A drawing or map showing the precise legal boundaries of a property, the location of improvements, easements, rights of way, encroachments, and other physical features.
Tax Deed - (1) Deed from tax collector to government 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.
Tenancy by the Entirety - A form of co-ownership by husband and wife, characterized by the inability of one spouse alone to convey or encumber whereby each owns the entire property. In the event of death of one the survivor owns the property without probate.
Tenancy in Common - As opposed to joint tenancy, when there are two or more individuals on title to a piece of property, this type of ownership does not pass ownership to the others in the event of death.
Title - A legal document evidencing a person's right to or ownership of a property.
Trust - A fiduciary relationship in which a trustee holds title to property for the benefit of a beneficiary.
Trustee's Deed - The deed given by the trustee under a deed of trust when the secured property is sold under power of sale.
Veteran's Administration (VA) Loans - Housing loans to veterans by banks, savings and loans, or other lenders which are insured by the Veteran's Administration, enabling veterans to buy a residence with little or no down payment.
Waiver of Liens – See Lien Waiver.
Warranty Deed - A deed used in many states to convey fee title to real property. Until the widespread 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 practical means of recovery by the grantee for defective title.
Zoning - Governmental regulation of the use of real property.