Glossary

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ACCELERATION CLAUSE
Clause in a deed of trust or mortgage which "accelerates" the time when the indebtedness becomes due.

ACTUAL NOTICE
Notice in fact to a party . . . directly and personally served.

ADJUDICATED NEWSPAPER
A newspaper that has met certain judicial requirements to be an official newspaper for the publication of legal notices.

ADJUSTABLE RATE MORTGAGE (ARM)
A loan with an interest rate that fluctuates based on a specified financial index.

ADVANCES
Moneys paid, on behalf of an owner, by any lien holder. Done to temporarily cure a delinquency on a senior encumbrance that threatens to extinguish their position..

AFFIDAVIT
A sworn, notarized statement that's signed by the affiant before witnesses.

AGREEMENT OF SALE
Also known as an agreement to convey. A signed, written contract entered into between the seller and buyer for sale of real property.

AMORTIZATION
The gradual repayment of a debt in a series of equal periodic amounts until the total debt, including interest, is paid in full. Loans are typically amortized over 30 years,

APN
Assessor's parcel number. The identifying number given by the County Assessor to a piece of property and used by the County Tax Collector on the tax bill.

APPRAISAL
Statement of value as of a certain date. It is prepared by a licensed and/or credentialed expert who has complied with the training requirements of the state and/or one of several recognized appraisal institutes.

APPRECIATION
IIncrease in value or worth. The difference between the increased value of property and the original sales price.

ARREARS
Generally, being overdue in an installment payment, Late Charges, advances, etc…..

ASSESSMENT
A bonded tax imposed to pay for public improvements (e.g. street/alley paving, curbs, sidewalks, etc.) beneficial to a limited area . Paid semi-annually over a 10 year period.

ASSIGNEE
One to whom a transfer of an interest is done.

ASSIGNMENT
Written document by which an interest, other than real property, is transferred from one entity/person to another.

ASSIGNOR
One who transfers property by assignment.

ASSUMPTION OF MORTGAGE
A formal agreement with a lender/debtor in which a new property owner agrees to be personally liable for the repayment of a pre-existing lien.

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BALLOON PAYMENT
A lump sum final installment payment of a promissory note that is much larger than the regular installment payments.

BANKRUPTCY
A proceeding in U.S. District Court wherein debtors who can not meet the claims of their creditors may be adjudged bankrupt by the court.

BENEFICIARY ("Bene")
One for whose benefit a trust is created; a lender secured by a deed of trust.

BENEFICIARY'S DEMAND
Payment required by a beneficiary under a deed of trust/mortgage before authorizing a reconveyance.

BENEFICIARY'S STATEMENT
Statement by a beneficiary under a deed of trust as to the total balance due on a promissory note and other information concerning the loan.

BENEFICIARY'S HIGH BID
Total indebtedness. (principal, interest, late charges, advances)

BENEFICIARY'S LOW BID
Total indebtedness less interest and late charges. Also called Specified bid (usually see on VA loans)

BID
Trustee's sales are conducted by verbal bid, with the auctioneer/trustee starting off with a minimum bid (total of all moneys due the beneficiary) on behalf of the beneficiary and then opening up the bidding to other qualified bidders.

BREACH LETTER (AKA Notice of Intent to Foreclose)
The first phase of the two step foreclosure process in most States. The notice, which is prepared by the lender or Trustee, contains particulars regarding the default in payment, the affected deed of trust, etc. The default period time to allow the debtor time to bring loan current or foreclosure action will commence.

BUSINESS DAY
Any day except Sunday or the following business holidays: New Years Day, Washington's Birthday, Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans Day, Thanksgiving, and Christmas.

BUY-DOWN
An up-front payment to a lender to reduce a loan's interest rate./ Balance

BUYER'S MARKET
A market with a lot fewer buyers than there are sellers. Indicated by a prolonged marketing time of more than 90 days and generally high mortgage interest rates of more than 12%.

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CANCELLED
A foreclosure file is terminated, usually through reinstatement, payoff or allowable postponement period expires.

CAP
A negotiated upper limit the interest rate on a variable rate mortgage can rise, both annually and over the life of the mortgage.

CASHIER'S CHECK
A check drawn on the issuing bank's funds and guaranteed payable (except in instances where it is lost or stolen).

CHAIN OF TITLE
A chronological list of documents that comprises the title record history to a specific real property.

CLEAR TITLE
Title that is not encumbered or burdened with defects.

CLOSING COSTS
The miscellaneous costs that the buyer and seller incur to complete or "close" a real estate transaction. These costs are in addition to the price of the property.

CLOUDED TITLE
Any claim, encumbrance or defect that contradicts the title record as understood by the property owner or interested party

CODE
A collection of laws relating to a certain topic.

COLLECTION SERVICE
A neutral third party who receives and disburses moneys according to a mutually executed collection agreement signed by the payor and payee of a debt.

COMMISSION
A fee paid to a real estate agent/broker.

COMMON AREA
Property in a condominium project that is jointly owned and used by all owners.

COMMON LAW
The unwritten body of English Law founded upon customs, precedents and usage.

COMMUNITY PROPERTY
A category of property, existing in some states (viz. California, Washington..) in which all property acquired by a husband and wife, or by either, during marriage, is owned in common by the husband and wife.

COMPARABLES (Comps)
Similar properties (situated in the neighborhood the property you're interested in) that are currently listed for sale or have recently sold.

CONDEMNATION
The taking of private property for public use by a governmental entity via the power of eminent domain.

CONDOMINIUM
The composite of individual ownership and exclusive possession of an enclosed cube of space in a multi unit building, plus a collective ownership of (and right to use) facilities common to all the separately owned units.

CONFORMING LOAN
A loan that complies with national secondary market guidelines promulgated by FNMA "fannie mae", FHLMC etc.

CONSTRUCTIVE NOTICE
Notice imparted by the public records (e.g. the county recorder's records).

CONTIGUOUS
Two or more parcels of land that abut against each other.

CONTINGENT
Dependent upon an uncertain future event/condition

CONVENTIONAL (Conforming) LOAN
A loan, secured by a deed of trust that's truly based on the value of the property, rather than a loan that's primarily secured by a government guarantee (VA) or insurance (FHA). The loan amount usually will not exceed 80% of the property's value.

CONVEY
The act of deeding or transferring title to individual/entity.

CONVEYANCE
A written instrument that transfers title to or an interest in land from one party to another (i.e. a deed, an assignment, a bill of sale, etc.)

COVENANTS, CONDITIONS, AND RESTRICTIONS (CC&R's)
A recorded, controlling declaration or deed that limits and qualifies what individual unit owners are free to do (for purposes of maintaining uniformity) in a community such as a condominium project or planned urban development, etc.

CREDIT BID
The opening bid at a trustee's sale is made on behalf of the foreclosing beneficiary. If it is less than the total amount of money owed to the beneficiary it will be made on a credit basis. But once the bid surpasses the total payoff amount then the beneficiary must begin to bid with cash at hand, just like all other bidders.

CREDIT LINE MORTGAGE
A deed of trust or mortgage that provides for an additional future advance(s) to the borrower. An uncertainty can exist regarding the priority of subsequent advances. The problem facing the foreclosure speculator is that there are no reliable independent elements detailing the true facts in every instance.

CROSS COLLATERAL LOAN
Two or more properties used to secure a loan, one of which may be personal property (e.g., a hotel, together with furniture and furnishings).

CURE THE DEFAULT
Reinstatement or payoff.

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DATE-DOWN
A supplement to the on-going title search that's undertaken during the foreclosure process via a trustee's sale guaranty. A date-down is done anytime a document is recorded and to make sure all lien holders get notification of the foreclosure action.

DECLARATION
A non-notarized statement made under of penalty of perjury.

DEED
A written document that transfers ownership of land from one party to another. The seller is called the "grantor" and the buyer is called the "grantee". Deeds may be of many kinds. Depending upon the language of the deed, the legal capacity of the grantor, and other circumstances.

DEED OF TRUST (TRUST DEED)
A three party security instrument conveying the legal title to real property as security for the repayment of a loan. The owner is called the "Grantor". The neutral third party to whom the bare legal title is conveyed is the "trustee". The lender is the "beneficiary". When the loan is paid off the trustee is directed by the beneficiary to issue a deed of reconveyance to the Grantor, which extinguishes the trust deed lien.

DEED-IN-LIEU OF FORECLOSURE
Used by owners to voluntarily convey the title of their property to the beneficiary (lender) to avoid the negative credit consequences of a foreclosure. Lenders are generally reluctant to accept a "deed in lieu" unless the title is free and clear of any other encumbrances junior to theirs and the owners execute an estoppel affidavit and special warranty deed acknowledging that they are acting volitionally, with informed consent.

DEFAULT
Failure to make the loan payments as agreed in the promissory note.

DEFAULT JUDGMENT
A judgment against a defendant who made no appearance in court.

DEFICIENCY JUDGMENT
A personal judgment against a debtor for the amount remaining due after a judicial foreclosure of a trust deed.

DEMAND
The payoff amount necessary to retire a secured debt.

DEPRECIATION
A decline in the value of property. Usually due to the obsolescence or wear and tear of the improvements on the land or adverse changes in the neighborhood.

DISCLOSURE
Regarding real estate, it is revealing all known facts concerning the property being transferred.

DOC STAMPS
Documentary transfer excise tax collected by the County Recorder.

DOCUMENTARY TRANSFER TAX
A local tax levied on recorded transfers of title to real property. The tax declaration is generally found on the face of the deed.

DOWN PAYMENT
The up-front cash commitment paid by the buyer. It makes up the difference between the sales price of a property and the loan amount.

DUE ON SALE CLAUSE
Provision in a deed of trust calling for the total pay-off of the loan balance in the event of a sale or transfer of title to the secured real property.

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EARNEST MONEY
An advance payment towards the purchase price of property that binds the parties to a purchase contract for property. It is usually not refundable if the purchase doesn't go through as a fault of the buyer, unless specified otherwise.

EASEMENT
A right of way allowing someone to cross over another's property for a limited, specific purpose.

ENCROACHMENT
An intrusion or overlap of an adjoining neighbor's improvement into a contiguous neighbor's property.

ENCUMBRANCE
A legal right, claim or lien upon real property that diminishes the owner's equity or the land's value. Typical encumbrances are trust deeds, judgments, assessments, mechanic's liens, C C & R's, easements, etc.

ENDORSEMENT
Guaranteeing a loan in the event the Grantor fail to pay as promised.

EQUITABLE TITLE
The present right to possession, coupled with the right to acquire legal title once some condition precedent has been met.

EQUITY (IN PROPERTY)
The property's current value minus the sum of all liens against it.

EQUITY LINE OF CREDIT
A loan that works much like a credit card, wherein a homeowner borrows money as needed, up to a pre-negotiated limit. Interest is paid only on the amount of the loan used and the borrower can pay off the balance as quickly or as slowly as they like.

ESCROW
An impartial third party that acts on behalf of both seller/buyer or borrower/lender in carrying out the principals' instructions through to an eventual "closing". Escrow acts as the custodian for the documents and funds involved - and makes disbursements, delivers documents and effects the consequential changes to the title record of the subject property.

ESTATE
The degree, nature and amount of interest or ownership a person may have in any property. Usually used to describe property that's left after death.

ESTOPPEL
A bar to the assertion of a right or a defense in consequence of a previous position, act or representation.

EXCEPTION
An interest in real property that is excluded from conveyance to the grantee and remains in the grantor.

EXCHANGE
The reciprocal transfer of real property that has certain tax advantages over a sale of the same properties.

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FAIR MARKET VALUE
The highest price a property will bring on the open market, given an informed and freely willing buyer and seller.

FANNIE MAE
Federal National Mortgage Association . . . the largest secondary-market investor in residential mortgages in the United States. Provides a constant and orderly market for banks to go to when they need to sell mortgages in order to keep their loan portfolios in balance with government-mandated liquidity ratios.

FEE SIMPLE
The most absolute, complete ownership of land without any limitation to any particular class of heirs or other restrictions.

FHA
Federal Housing Administration (formed in 1934). It's now a branch of H.U.D. It's basic function is to spur housing in the directions that Congress mandates by issuing mortgage insurance to institutional lenders on the loans they make under the 47 different loan programs that FHA now sponsors. With such loan insurance lenders are willing to lend with smaller down payments and at lower rates of interest.

FINANCING STATEMENT
The document prescribed by the Uniform Commercial Code (UCC) which provides notice that a security agreement encumbering personal property exists between parties. It is recorded locally or filed with the Secretary of State. The procedure does not apply to real estate mortgages. However, since it's sometimes unclear whether specified items are real or personal property, a financing statement is often recorded by a lender.

FIRST TRUST DEED
A lien on real property which is superior to any other lien of record.

FIXED RATE LOAN
A loan bearing a constant interest rate that does not vary over the life of the loan. Monthly payments on a fully amortized, fixed rate loan will not change over time.

FLIPPING or PIVOTING
Buying and then reselling property within a very short holding period.

FORBEARANCE AGREEMENT
A formal agreement between a borrower and a lender to temporarily postpone an on-going foreclosure, by making payments on the funds owed.

FORCED SALE
When one sells or loses his property without actually wanting to dispose of it.

FORECLOSURE
The forced sale of property pledged as security for a debt that went into default.

FORTY THIEVES
The local group of professional foreclosure speculators working in concert at the trustee's sales rather than in direct competition. Their orchestrated, sideline bidding activity acts to keep bidding levels down, resulting in reduced over-bids going to junior interest holders.

FREE AND CLEAR
Ownership of property free of all indebtedness. When an owner's equity is equal to the fair market value of her property.

FRIENDLY FORECLOSURE
A foreclosure that is actually instigated by the debtor/owner for some ulterior reason - generally to clear up clouded title, etc.

FUTURE ADVANCES
Additional moneys lent that are secured by an already existing promissory note and trust deed.

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GENERAL LIEN
A lien against an individual. By operation of law it will automatically attach to any real property the individual owns or comes into title to, once the lien is recorded and becomes part of the public record.

GRACE PERIOD
A period of days during which a debtor may cure a delinquency without penalty.

GRADUATED RATE LOAN
A loan that starts out with low payments that increase at a pre-determined rate at the beginning of the loan term, and then once the payment is up to a certain level it remains constant for the remaining life of the loan.

GRANT DEED
A deed used extensively in several States to transfer title. There are a number of implied warranties attributed to it, the main ones being that the grantor has the right to convey the property, and that the grantor hasn't encumbered the property any more than already disclosed. The grantee may hold the grantor liable if the title proves to be defective.

GRANTEE
The person acquiring title to real property by a deed.

GRANTOR
The person transferring title to real property by a deed.

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HARD MONEY LOAN
A loan transaction wherein actual money changed hands rather than an extension of credit.

HAZARD INSURANCE
Protects against damage to property from fire, windstorms and other common hazards.

HOMEOWNER'S WARRANTY (HOW)
An insurance policy that insures the new homeowner against defects in systems such as wiring, plumbing, heating and air-conditioning.

HOMEOWNER'S ASSOCIATION
A private, nonprofit organization of homeowners operating in accord with the recorded "covenants, conditions and restrictions" of their particular development. Its primary purpose is to provide for the maintenance of the common area facilities and amenities by assessing each unit owner share of the project's operating expenses.

HOMESTEAD EXEMPTION
The dwelling in which an owner resides is protected to a limited extent iby a recorded declaration of homestead. It has no effect against voluntary liens, like trust deeds, regardless of their priority. But it does protect the owner's equity from involuntary liens as long as the property's value doesn't surpass the total of all liens plus the homeowner's homestead exemption.

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IMPROVEMENTS
Man-made additions to and on real property that enhance its value.

IN LIEU OF
Substituting for; in place of. An alternative.

INJUNCTION/TRO
Defensive courthouse tactic compelling the postponement of an ongoing foreclosure action long enough for a judge to determine if the proceeding is just and proper.

INSTITUTIONAL LENDERS
Banks, savings & loan associations, and insurance companies who lend out depositors' money as contrasted with private individuals lending out personal funds.

INSTRUMENT
Any legal document such as a deed, trust deed, reconveyance, etc. Also referred to as a document.

INSURABLE INTEREST
An interest in property substantial enough to cause the owner of it an actual loss if it were damaged or destroyed. The beneficiary of any insurance policy, even a title insurance policy, must show an "insurable interest" in order to be covered by it.

INTER PLEADER
A court filing that petitions the court to take custody of a sum of money and distribute it amongst the disputants as it sees fit - absolving the third party from any liability therefrom.

INTEREST
The cost of using borrowed money. It's quoted as an annual percentage of the loan amount. The rate can either be fixed or fluctuate ("adjust") over the life of the loan.

INTERPLEADER ACTION
Asking the court to decide.

INVOLUNTARY LIEN
A lien imposed upon property by the operation of law rather than at the will of the owner.

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JOINT TENANCY
An estate owned by two or more parties in equal shares that is created by a single transfer document. Upon the death of a joint tenant the surviving joint tenants take the entire decedent's share of the property, so nothing passes to the heirs of the deceased.

JOINT VENTURE
The association of two or more individuals in a business transaction.

JUDGMENT LIEN
A general lien (good for 10 years) created by a court ordering a debtor to pay a certain amount of money to the judgment creditor. The lien will bind to the debtor's real property once an abstract of the judgment is recorded.

JUDICIAL FORECLOSURE
A foreclosure that's processed via a court action.

JUMBO LOAN
A loan that exceeds the statutory size limit eligible for purchase or securitization by Federal agencies.

JUNIOR BENE BUYOUT
The purchase of a junior beneficiary's trust deed position at a steep discount because of an impending foreclosure on a senior trust deed.

JUNIOR LIEN
A lien that does not have first claim on the property it is secured by because it was recorded later than a competing lien secured by the same property.

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LAND CONTRACT
An agreement for the installment sale of property wherein the buyer receives possession of the property, but the title thereto is withheld until all or most of the purchase price is paid.

LEASE OPTION
A lease coupled with an option to buy the property being leased.

LEGAL CITATION
A "cite" refers to a state or federal legal point that was established either by a code, a regulation or a court case.

LEGAL DESCRIPTION
A formal description of real property sufficient to locate it by reference to government surveys or approved recorded maps.

LIEN
A claim against real property.

LIS PENDENS
A recorded notice of pending litigation, the outcome of which could affect the title to a particular piece of property.

LISTING AGREEMENT
A limited-time agreement with a licensed real estate broker that authorizes the broker to represent the seller in the sale of their property.

LOAN-TO-VALUE ratio (LTV)
Lenders require a protective equity cushion between their loan positions and the fair market value of a secured property. Non-guaranteed lenders generally require that their loans amount to no more than 75% to 85% of their appraiser's estimate of the market value of the encumbered property.

LOT BOOK/JUDGMENT LIEN REPORT
A title record report similar to that of a preliminary but absent any information regarding easements.

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MAILINGS
Any mailing, certified or regular, called for by the Civil Code.

MARGIN
The lender's profit that's added to the cost of funds index the lender uses to determine the overall interest rate to charge borrowers on their variable rate loans.

MARKET VALUE
The current value of property as determined by exposure to offers from willing buyers in the open market.

MARKETABILITY
The condition of title that's clear enough that a buyer wouldn't object to it.

MECHANIC'S LIEN
A non-voluntary, statutory lien recorded against a specific property in favor of contractors/materialmen for unpaid improvements made to the property. A mechanic's lien priority is established when the improvements were begun rather than when it was recorded.

MEMORANDUM OF AGREEMENT
A writing meant to memorialize the essentials of a transaction or act as an actual contract.

MODIFICATION AGREEMENT
A mutual agreement between the parties to a deed of trust and promissory note to change one or more of the terms in the promissory note.

MORTGAGE
A written pledge of property that is put up as security for the repayment of a loan. The lender is the mortgagee and the property owner is the mortgagor.

MULTIPLE LISTING SERVICE (MLS)
The combined property listings of local real estate agent/members that are pooled together in an MLS book and computer network for the widest marketing exposure to their membership at large.

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NEGATIVE AMORTIZATION
The gradual increase in the balance of a loan. Caused by payments that amount to less than the interest being charged. The shortfall is added to the total balance due, causing it to grow, rather than diminish, over time. The practice is not permitted in some states to protect consumers from the hopelessness of an ever-increasing debt balance.

NEUTRAL MARKET
A real estate market that doesn't favor buyers or sellers. A "flat market"... one that requires a marketing time of 61 to 90 days and mortgage interest rates in a range of 10+% to 12%.

NON-JUDICIAL FORECLOSURES
This method of foreclosure does not go through the court system.

NOTARY PUBLIC
A bonded officer licensed by the state to "acknowledge and attest" to the validity of signatures of others. Notarized signatures are required of the general public for any documents that individuals record in order to prevent the perpetration of fraud by forgery.

NOTICE OF DEFAULT
The first phase of the two step foreclosure process in most States. The notice, which is prepared and either recorded, mailed and/or posted by the foreclosing trustee, contains particulars regarding the default in payment, the affected deed of trust, etc. The default period time to allow the debtor time to bring loan current or payoff.

NOTICE OF INTENT (TO FORECLOSE - AKA Breach Letter)
The first phase of the two step foreclosure process in most States. The notice, which is prepared by the lender or Trustee, contains particulars regarding the default in payment, the affected deed of trust, etc. The default period time to allow the debtor time to bring loan current or foreclosure action will commence.

NOTICE OF NON-RESPONSIBILITY
A statutorily provided notice wherein the owner of real property avers that she will not be responsible for any liability arising out of any work being done on her property at the behest of any tenant, any buyer or any other party. Said notice is usually prominently displayed on the property within 10 days of learning of such work effort.

NOTICE OF TRUSTEE'S SALE
The notice is prepared and recorded by the foreclosing trustee. It recites the legal description of the property being foreclosed upon and gives the date, time and place of the pending trustee's sale.

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OFF CALENDAR/DROPPED
An on-going foreclosure that's been taken off the trustee's sale calendar. A new Notice of Trustee's Sale will have to be recorded to establish a new sale date.

OFFICIAL FEES
Only what is covered by the Civil Code, of guidelines

OFFICIAL RECORD
The record in which all instruments filed in the County Recorder's Office are recorded. In the instance of determining the validity of "wild" recordings or ambiguous legal descriptions, names, etc. courts are required to make their determination in accord with the "official record" as it appears in the county recorder's records.

OPTION
A legal right to purchase property at some future date for a specified price and terms.

OVERBID
That amount of money bid in excess of the trustee's or sheriff's minimum bid. It is distributed, to the succeeding equity holders.

OWNER CARRY BACK
When a property owner takes back a portion of their sales price in the form of a purchase money or deed of trust.

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P.I.T.I.
Refers to the monthly housing expenses of: Principal, Interest, Taxes and Insurance.

PAID OFF
Obligation paid in full.

PARCEL
Any area of land contained within a single description.

PERFECTED TITLE
Generally it means a title interest that's been recorded.

PERSONAL PROPERTY
Property that is movable or harvestable.

PETITION
A formal, written request to an authority that something be done.

PLAT, PLOT, or SURVEY
A map made by a licensed surveyor showing how a parcel of land has been divided into separate lots.

POINTS
A charge made by a lender that's part of the borrower's cost of obtaining a loan. Each point equals one percent (1%) of the loan amount. Points increase the effective yield on the loan above the nominal interest rate being charged.

PORTFOLIO LOAN
A loan that a lender intends to hold in inventory rather than resell in the secondary market. Such a loan only has to satisfy the lender's guidelines rather than the arbitrary rules of the secondary mortgage market.

POST
After, afterward.

POSTING
Giving notice by physically attaching it to a prescribed bulletin board and/or attaching it to the affected property itself.

POSTPONEMENT
An oral announcement, made in lieu of a scheduled trustee's sale, that reschedules the pending sale.

PREEMPTION
Usurping another person's opportunity.

PRELIMINARY TITLE REPORT ("Prelim")
A title company report showing the open title record of a property prior to the issuance of a title insurance policy.

PREPAYMENT PENALTY
A fee charged by a lender if a loan is paid off earlier than required.

PRINCIPAL
The amount of money owed on a loan, excluding interest and other charges.

PRIORITY
A clause in a subordinate lien (such as a 2nd trust deed) which states that it is subject to a prior lien.

PRIORITY CLAUSE
A clause in a subordinate lien (such as a 2nd trust deed) which states that it is subject to a prior lien.

PRIVATE MORTGAGE INSURANCE (PMI)
Insurance against a loss by a lender, due to a default in payments from a borrower. Often required when a buyer is paying a small down payment .

PRIVATE OFFERING
An investment issue which is exempt from registration with the SEC and state regulatory agencies if it adheres to both state and federal mandates concerning same.

PROBATE
The process by which a court changes the title to a deceased person's real property. The property is from a decedent to either: 1) his or her heirs (as determined under the laws of intestacy), called an "intestate estate"; or 2) pursuant to the terms of his or her will or trust, called a "testate estate". All techniques which "avoid probate" involve changing title to the decedent's real property without court involvement.

PROMISSORY NOTE
An unconditional instrument of indebtedness between borrower and lender that is commonly secured by a deed of trust. Since the note is not recorded its terms aren't freely available.

PROPERTY PROFILE
Complimentary title company copies of some of the documents pertaining to the ownership, legal description, concurrent liens, and property data of a specific parcel of land. A tax roll, plat map and comps are also generally included.

PURCHASE MONEY DEED OF TRUST
A trust deed, given as part or all of the purchase price of real property, that is secured by the property being bought.

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QUALIFYING
The process of registering with the auctioneer before the trustee's sale begins by showing the auctioneer how much money you brought and the form it is in.

QUIET TITLE
An action at law to remove an adverse claim or cloud from the title of property. The court decree obtained is a "Quiet Title" decree.

QUIT CLAIM DEED
A form of deed containing no warranties as to the quality or validity of the title being transferred.

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R.E.O.
"Real estate owned" by a beneficiary/lender because it wasn't bought by an outside bidder at the trustee's sale.

RECONVEYANCE
A recorded document issued by a trustee that extinguishes a deed of trust lien when the note it secured is paid off. The trustee will require the original note, a copy of the deed of trust, a request for reconveyance, and their fee as applicable.

RECORDING
Filing a document with the county recorder to have it entered into the public record, giving constructive notice to the public at large of its contents.

REDEMPTION RIGHT
Generally refers to a debtor's right to reacquire title to property lost via a judicial foreclosure within a year or so afterward. It also refers to IRS's right to redeem property that had secured a federal tax lien prior to a non-judicial foreclosure by a senior lien. IRS's right is limited to120 days after the trustee's sale and requires reimbursement to the winning bidder of the trustee's sale.

REINSTATEMENT RIGHT
A trustor's or junior lienor's statutory right to cure a default in the payment of a promissory note rather than having to pay off the whole loan.

RELIEF FROM STAY
An order from the bankruptcy court allowing a lender to proceed with his default remedies against a debtor... exempt from the automatic stay.

REQUEST FOR NOTICE
A recorded document that requires a trustee to send to the requester a copy of any Notice of Default or Notice of Trustee's Sale that the trustee records concerning a specific deed of trust that's in foreclosure. Though the requester can be anyone, it's usually a junior lienor who wants to be alerted to the foreclosure action of a senior lien that could wipe out his/her junior lien.

RESCISSION
The act of canceling or annulling the effect of a recorded document.

REVERSE MORTGAGE
A home loan tailored to senior citizens who own their home free and clear or almost so. It's a loan that pays the borrowers a monthly cash amount until their deaths whereupon the home is sold to repay the loan and accumulated interest.

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SECONDARY MARKET
Most lenders sell the loans they originate to large-scale, national investors such as "Fannie Mae" and Freddie Mac". The reason they do is to recycle their money to create more loans. In order to sell their loans originating lenders have to adhere to Fannie Mae's underwriting guidelines.

SELLER'S MARKET
A market with a lot fewer sellers than there are buyers. The number of days it takes to market property in a seller's market will average 60 days of less and mortgage interest rates will generally be less than 10%.

SHORT RATE
The adjusted, pro-rated premium for a canceled insurance policy. The rate is higher than that regularly charged to compensate for a period shorter than originally contemplated.

SHORT SALE
The sale of property at a fair market price that's lower than the loan balance.

SIMULTANEOUS PRIORITY
Two or more liens recorded one right after the other in the same transaction, against the same property, are of equal parity unless there's a written indication on one of them as to their respective priorities.

SOLDIER'S AND SAILOR'S RELIEF ACT
Protects certain military personnel from losing their homes to foreclosure while on they're on active duty.

STANDING MORTGAGE
A synonym for an "interest only" mortgage; where the periodic payments only cover interest expense-so there's no amortization of the principal balance.

STREAMLINING
Refinancing down to 1/2% above the existing loan rate with minimal qualifying, paperwork and cost. Introduced in 1989 and associated with FHA and VA type loans. VA loans can only be streamlined by the original borrower, whereas FHA loans can be streamlined by anyone making their first 6 months payments on time.

SUBDIVISION
The division of a parcel of land into smaller lots, by means of a map, for resale or development into residential or agricultural use.

SUBJECT TO
The purchase of a property with an existing lien against the title without assuming any personal liability for its payment.

SUBORDINATION AGREEMENT
An agreement wherein an earlier recorded lien holder agrees to be junior in priority to a later recorded lien holder.

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TAX SEARCH
A search made at the offices of the various taxing authorities to determine the amount of taxes due.

TENANT
Any person in possession of real property with the owner's permission.

TITLE
The evidence of a person's right or interest in real property.

TITLE INSURANCE POLICY
A "contract of indemnity" protecting the insured from loss due to unknown, hidden clouds, liens or defects affecting the title to the covered property. Since insurance benefits will be paid only to the "named insured" in the title policy, it's important that an owner purchase an "owner's title policy" (CLTA) that's separate from the "lender's policy" (ALTA).

TITLE PLANT
The records of a title company, collected over the years, that enable it to accurately ascertain the current condition of title to specific property.

TITLE SEARCH
A detailed check of the title records at the recorder's office to make certain that the buyer is purchasing a property from the legal owner and that there are no more liens against the property's title than those already disclosed by the seller.

TRANSFER TAX
A tax collected from sellers upon the transfer of their title to real property.

TRUST DEED
See Deed of Trust.

TRUSTEE
The third party to a deed of trust, usually an entity like a title company, that holds the bare legal title to property tendered by the grantor as security for the repayment of a loan.

TRUSTEE'S DEED
The deed issued by a trustee to the highest bidder at a trustee's sale.

TRUSTEE'S SALE
A non-judicial auction sale of real property, conducted by a trustee in the exercise of the power of sale clause, pursuant to the terms of the defaulted deed of trust.

TRUSTEE'S SALE GUARANTEE (TSG)
A special title report, for trustees only, that discloses all items pertaining to the ownership interests and encumbrances on a property in foreclosure. Also included is a list of all parties who recorded a special request to be notified if any NOD or NTS is filed against the particular trust deed in foreclosure. Furthermore it gives the trustee a list of all the local publications that qualify to advertise the Notice of Trustee's Sale . It's also a contract of indemnification that protects the trustee and the beneficiary from the consequences of any title record error in their foreclosure proceeding.

TRUSTOR
The property owner who voluntarily puts a deed of trust against his/her property.

TWO STEP MORTGAGE
A 30 year mortgage split into two separate, fixed rate segments. A "7-23" mortgage is a typical arrangement where the monthly payment for the first seven years is designed to be a lot lower than the monthly payment for the subsequent 23 years.

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UNDERBID
A minimum bid that only reflects the beneficiary's actual cost in the defaulted loan (it doesn't include the unpaid interest). Done when the beneficiary guesses they won't be bought out by any bidders at the trustee's sale. Thus, if they are going to get title to the property, they don't want included in its value the profit (interest charges) they never received! That way there's no income tax liability on phantom profits. If an outside bidder does appear the beneficiary will instruct the trustee to increase its opening bid to include the unpaid interest.

UNDERWRITING REQUIREMENTS
The standards established by a lender to determine if a person qualifies for a loan. The criteria is usually based on a property appraisal, a review of the buyers' current credit history (usually 2 years) and their capacity and willingness to repay in a timely manner.

UNLAWFUL DETAINER
An eviction lawsuit brought to recover the possession of real property from a holdover occupant.

USURY
A rate of interest charged on a loan that is in excess of the statutory maximum.

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VA
Veterans Administration... established under the Servicemen's Readjustment Act of 1944. It provides two very helpful housing benefits to servicemen and veterans by guaranteeing a lender's housing loan made to an eligible vet without any down payment requirement and by requiring that the subject property conform to VA's housing standards as determined by an on-site appraisal conducted by an approved VA appraiser.

VA SPECIFIED BID
On VA insured loans, the VA tells the beneficiary how much the opening bid should be at the trustee's sale. This amount is lower than the amount advertised in the Notice of Sale.

VARIABLE RATE LOAN
A loan bearing an interest rate that fluctuates according to some specified financial index of the current cost of money - wherein both the interest rate and the monthly payment are subject to adjustment at some pre-established interval.

VESTED INTEREST
Having an interest in the property.

VESTEE
Present record owner.

VESTING
The names or manner in which the fixed, determinable title to real property is held.

VOLUNTARY LIEN
Any lien placed on property with the consent and cooperation of the owner.

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WAIVER
A release or abandonment of a right or privilege.

WARRANTY DEED
A deed containing express and implied covenants as to good title and right to possession.

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ZONE
Area in a community that's designated for a specified use and purpose.

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