KEY WORD LIST:

 -or: This is a word ending showing who starts or is at CAUSE over the action.

 Grantor = one who grants something. The seller/owner of a property is the “Grantor” as he

is granting the right to buy the property to someone else.

 Lendor = one who lends something. The person or company loaning money is the “lendor”.

Mortgagor = one who mortgages property. The buyer of property is the mortgagor as he

gives a mortgage to the lender. (See definitions below for mortgage, mortgagee & mortgagor.)

 Trustor = one who puts his trust in another. Both the buyer and the lender could be considered a“trustor” as they each entrust the title company to oversee that the terms of the loan are carried out by both parties.

 -ee: This is a word ending showing who receives or is the EFFECT of an action.

Grantee = one who receives a grant. The buyer of a property is the “Grantee” as he is receiving the right to buy the property.

 Lendee = one who receives a loan. The buyer would be the lendee of a loan.

Mortgagee = person to whom something is mortgaged. The bank/lender is the “mortgagee”

because it receives the mortgage from the buyer.

 Trustee = one who receives something in trust. An attorney or title company is a “trustee” because they are entrusted to oversee the terms of a loan.

 GLOSSARY OF BASIC DEFINITIONS:

 Abstract: A brief summary. A short statement of the main content of an article, speech, document, etc.

 Abstract of Judgment: A brief transcript of the essentials of a judgment.

 Abstract of Title: A summary of the conveyances, transfers and other recorded facts regarding proof of title to real property.

 Acknowledgment: A legal document or statement made before a notary public, or other duly authorized officer, by a person whose identity and signature are verified by the notary.

 Assignment: The transfer to another of any right or interest in real property, or of the title to and interest in an item of personal property, as a patent or a receivable. This is often the selling of a loan from one lender to another.

 Assumption Agreement (Assumption of Mortgage): This is an agreement where a person takes over the payment of a property loan from another person. A Veteran’s loan is usually ‘assumable’ by another qualify veteran.

 Beneficiary (also called Lender): Someone who receives a benefit. The Lender is a beneficiary because he either benefits by receiving money (interest on the loan) or the property if the owner does not pay the loan back as agreed.

Someone who receives or is to receive money or property from an insurance policy, will, etc., is also called a beneficiary.

 By Rights of Survivorship: If one of the people named on the document dies, the other person(s) named gets ownership of the property.

 Capital Assets: All of a company’s tangible property, including securities, real estate and other property.

 Capital Gain: The profit made when capital assets are sold for greater than their original cost.

 Capital Gains Tax: The tax paid on the profis gained from selling Capital Assets.

 Capital Loss: The loss made when capital assets are sold for less than their original cost.

 CC&R’s (Covenants, Conditions, & Restrictions): Legal limitations as to how a property may be used. The ‘zoning laws’ determine whether a property can be used for commercial, residential or farming purposes.

 Cloud (on Title): An invalid encumbrance (see definition) on real property, which, if valid would affect the rights of the owner. Example: “A” sells Lot 1, Block 1, to “B”. The deed is mistakenly drawn to read Lot 2, Block 1.

A cloud is created on Lot 2, by the recording of the erroneous deed. The cloud may be removed by a quitclaim deed or, if necessary, by court action.

 Collateral: Something of value which is used by its owner to borrow money against. Often this would be a house and property. It can also be anything listed as personal property. If the borrower fails to repay the debt, the property used as collateral can be taken as repayment.

 Consideration: Anything of value exchanged for something else of value to make a binding contract. On a Deed of Trust one normally sees an amount of money given as the consideration.

On a Quitclaim Deed one may see a “consideration of love and affection”.

 Conveyance: A document which transfers (conveys) ownership or interests in real property from one party to another. A conveyance must be ‘acknowledged’ before a notary public and recorded with the County Recorder or Recorder of Deeds.

 Current Owner Search: A search of a property and all pertinent documents for the specific time period of one owner or spouse, co-owners, etc.

 Deed: A legal document which shows who owns a particular property. For example, the buyer of real estate receives a deed to the property from the former owner. (See Types of Deeds.)

 Encumbrance (or Incumbrance): A right or interest in land decreasing its value but not hindering its sale or transfer. A mortgage would be an encumbrance as it would have to be paid off to the bank before a new person could own the property. (See Lien.)

 Execution Date: The date a document was signed and notarized.

 Fee: (in law) an estate of land that may be passed on to the owner’s heirs.

 Fee Simple: Absolute ownership. A person inheriting property would own it outright, therefore having “an estate in fee simple”.

 Fixture Filing: See UCC filing.

 Grantee: The person buying or receiving the property. If you were buying a house, you would be the grantee.

 Grantor: The person or company selling the property. The owner of the property or a bank selling the property is the grantor.

 Instrument: Any document in writing that gives a right or forms a contract. Any document recorded by a government (federal, state or county) is an ‘instrument’.

A deed, sales contract, check, loan agreement, etc. Are all examples of ‘instruments’.

 Joint Tenancy: Joint ownership of real or personal property. If one of the joint tenants dies, the other(s) inherit his share of the property rather than his share of the property going to his estate.

The ownership of property in this manner would be “James Smith and Alice Smith as joint tenants with right of survivorship and not as tenants in common.” (See Tenancy by the Entirety.)

 Judgement: A legal decision made by a judge in a court of law usually regarding a dispute of some kind.

 Lien: A debt or obligation filed against a property which must be settled/paid by the owner of the property in order to clear the title and sell the property to another. Examples of liens are Federal taxes owed, unpaid repairs, lawsuits against the owner, etc.

 Modification: A document which changes a loan in some way. This could be to change the terms of the loan, such as the amount, the length of time to pay it off, etc.

 Mortgage: A 2-party, document in which the owner pledges his title to real property to a lender as security for a loan described in a promissory note (loan).

To be enforceable, the mortgage must by signed by the new owner (borrower), acknowledged before a notary public, and recorded with the County Recorder or Recorder of Deeds.

If the new owner (mortgagor) fails to make payments on the loan (becomes delinquent), then the lender (mortgagee) can foreclose on the mortgage to force a sale of the real property to obtain payment from the proceeds, or obtain the property itself at a sheriff’s sale upon foreclosure.

Under the Deed of Trust system, title is technically given to a trustee to hold for the lender, who is called the beneficiary. When the loan is paid off, the Trustee then conveys (transfers) the title to the borrower who then owns the property free and clear.

 Mortgagee: The lender is the mortgagee because he receives the mortgage from the buyer which entitles the lender to a claim on the property if the debt is not paid when due.

 Mortgagor: The buyer is the mortgagor because he mortgages his property to the lender which gives the lender a claim to the property in case the debt of the loan is not paid when due.

 Mortgage Search: All related documents to a certain mortgage as requested by an individual customer.

 Notarize: To sign a legal paper and stamp it with one’s seal as a notary public.

 Notary Public (or Notary): An official who has the legal power to witness the signing of a deed, will, contract, etc. and to declare that a person has sworn to the truth of something.

 Note Date: The date the document was drawn up and signed.

 Notice of Trustee Sale: Notice is given that the trustee is selling the property by auction. The notice itself will say why the trustee is selling.

 Personal Property: Movable property, property which is not real property.

A refrigerator or washer & dryer are personal property that are often sold with a house.

 PMM (Purchase Money Mortgage): This is basically a seller-financed sale of property. The seller of the property, rather than a lending institution, loans a sum of money or gives credit to the purchaser in return for holding the mortgage on the property.

 Power of Attorney: A legal instrument authorizing one to act as another’s attorney or agent.

 Real Property: Immovable property such as land, buildings, improvements, etc.

Any built-in appliances are generally considered real property as they are part of the house being sold.

 

Real Estate Contract: A contract between two people where person “A” buys property from person “B”. Person “B” is still on the title until person “A” pays off the contract. This is usually done in installments.

 Reconveyance: An instrument which shows that a loan (Deed of Trust or Mortgage) has been paid off and the title/ownership of the property is fully reconveyed back to the recorded owner with no further claim for that loan.

 Recording Stamp: A stamp that the county puts on a document that says it has been recorded or filed in the county records. Recording stamps include date, time of day, county name and instrument number in most cases.

 Release: (See Reconveyance.)

 Revocable: That which can be taken away or withdrawn. A driver’s license can be revoked. (See revocable trust.)

 Revocable Trust: A trust that may be altered or cancelled during the grantor’s lifetime. Since the trust may be altered at any time until the grantor’s death, it is considered part of the grantor’s estate and is subject to taxation. The property is passed on to the beneficiaries only after the grantor’s death, and the revocable trust then becomes irrevocable. For example, parents might allow their children the use of property without the right to sell it. The parents can take the property back at any time.

 Rider: Something added to an official document. For example, a “second home rider” may be added to a deed of trust allowing for a second home to be built on a property at a future time.

 Satisfaction: (See Reconveyance.)

 Tenancy: The condition of living on land or in a building by renting it;

(See Tenants in Common, Joint Tenancy and Tenants in the Entirety.)

 Tenancy (Tenants) By the Entirety: A form of ownership by husband and wife whereby each owns the entire property. In the event of the death of one, the survivor owns the property outright.(See Joint Tenants.)

 Tenancy (Tenants) in Common: A form of ownership by one or more people, whereby upon the death of one his share of the property is included in his estate. There is no right of survivorship as in joint tenancy. Tenancy in common of property is indicated by an ownership inscription such as “James Smith and Alice Smith.”

 Title: The documentation that shows the legal right’s of a person to the ownership of property.

 Title Company: A company which issues insurance against loss resulting from defects of the title, i.e. ownership of property or encumbrances. Title companies represent attorney responsibilities in property title matters.

 Trust: A right to the beneficial enjoyment of property that is legally owned by another. The person creating the trust is the creator, settlor, grantor, or donor. (Borrower) The holder of the legal title is the trustee. (Attorney or title company) The holder of the beneficial interest is the beneficiary. (Lender)

 Trustee: An attorney or title company. The trustee holds the title to real property under the terms of a title insurance policy for transferring ownership or for ensuring the terms of a Deed of Trust are met for a loan.

 UCC = Uniform Commercial Code: The Uniform Commercial Codes are rules governing the use of personal property to secure loans, sales, warranties, and other commercial matters. They have been adopted with minor variations by all states except Louisiana.

 UCC Filing: (This is also called Fixture Filing.) A loan on personal property. Service companies which have quantities of non-property related stock, equipment, etc., such as a car dealership’s auto stock, a carpet company’s carpet stock, a metal ship’s large machinery, etc. will use this equipment or merchandise as ‘collateral’ for a loan. (The owner of the property or ‘grantor’ is the one who owes the money.)

 UCC-1: A financing agreement form for using personal property (such as company equipment) to secure a loan under the provisions of the Uniform Commercial Code (UCC) adopted in almost all states.

 Vest: 1) To give some power or right to. For example, the power to levy taxes is vested in Congress. 2) To give an immediate fixed right to property. For example, the ownership of property is vested to the buyer.

 Warranty: A guarantee made by the one who makes or sells something. In the case of merchandise, the seller promises to repair or replace it if it is not as good as it is supposed to be or if something goes wrong within a certain time. In the case of property, clear title and the right of possession are guaranteed by the seller via a Warranty Deed. (See Warranty Deed)

 TYPES OF DEEDS:

 Bargain & Sale Deed: A deed in which the persons involved make an agreement and sell the property from one person to the other without using an outside agency. John D oe sells his property to John Smith directly for cash or per a loan agreement where John Smith pays John Doe monthly payments defined in the loan agreement.

 Deed creating an Estate By the Entirety: A deed that creates whole ownership between more than one person. These people are named on the document. If one owner dies, the others automatically become owners of his share. (See Tenancy By Entirety.)

 Deed of Trust: A 3-party document that conveys title to property to a trustee who is entrusted to see that the agreements made in the mortgage are followed by the borrower and the lender. When the loan is paid off, the trustee transfers the title to the borrower.

 Good Stop: A Warranty Deed, followed by an institutional mortgage, recorded together (i.e. Prior Deed of Trust filed with Deed and release information). Other good stops could be a deed from a developer, a deed from HUD, or a foreclosure proceeding greater than 10 years old.

 Quit Claim Deed: A deed which passes ownership from one person(s) to another. Usually a personal deed between persons. This instrument does not always represent money being paid or changing hands and is therefore not always the Vesting Deed. For example, parents may “give” property that they own to their children this way. (See example)

 Vesting Deed: Deed where the person originally acquired the property. This could be any of various types of instruments.

 Warranty Deed: Deed which shows ownership. This is the m ost commonly used instrument which transfers a particular property into a certain person’s name. It warrants title and ownership of the property named.