GLOSSARY

ABSTRACT OF JUDGEMENT: A condensation or summary of the essential provisions of a court judgment.

ACCOMMODATOR: A person or entity serving as an intermediary in an exchange transaction.

ADMINISTRATOR: A person appointed by a probate court as the representative of a decedent's estate where the decedent left no will.

ADVERSE POSSESSION: A method of acquisition of property based on continued use and payment.

AGENCY: The relationship between a principal and an agent arising out of contract where an agent is employed to act on behalf of the principal in dealings with third parties.

ALIENATION CLAUSE: A clause in a note or trust deed permitting the payee or beneficiary to declare the entire balance immediately due and payable upon subsequent transfer of the property. Also referred to as a "due on sale" clause.

ALL-INCLUSIVE DEED OF TRUST: A deed of trust that includes within the terms of the note the obligations owning under a prior deed of trust.

APPURTENANCE: Anything incidental or belonging to land which is considered part of the real property, such as an improvement on real property or an easement for ingress and egress.

ASSESSMENTS: Special taxes imposed to pay for public improvements beneficial to a limited area.

ASSUMPTION: The taking over by one party of an obligation that was originally incurred by another, as in the assumption of an existing trust deed by the new owner when property is sold.

ASSIGNMENT OF NOTE AND DEED OF TRUST: The holder of a promissory note and deed of trust wants to sell the note to a third party, possibly at a "discount."

BALLOON PAYMENT: The final payment on an installment note which is greater than the preceding payments and which pays the note in full. Also, a payment that exceeds the normal payment program.

BALLOON PAYMENT PROVISION: (Civil Code Section 2966) applicable to one-four family units where the note maturity date is one year or greater than the origination date.

BENEFICIARY: As used in a trust deed, the lender is designated as the beneficiary, i.e. obtains the benefit of the security.

BILL OF SALE: A written instrument evidencing the transfer of title for personal property.

BOOT: Dissimilar property, such as money, given as part of the consideration in the exchange of properties having different values. Boot compensates for difference in value.

COLLATERAL: Any property pledged as security for a debt, e.g., the real estate pledged as security for a mortgage or deed of trust.

COMMUNITY PROPERTY: Property acquired by husband or wife or both during marriage when not acquired as separate property.

CONCURRENT ESCROW: A procedure in which the closing of one escrow is dependent on closing of another. The procedure is commonly used in exchanges of property as well as instances where the buyer depends on funds he expects from the sale of another property.

CONDOMINIUM: Ownership of a divided interest, i.e. an individually owned unit, in a multifamily or other structure, together with an undivided interest in common areas.

CONFIRMATION OF SALE: Court approval of the sale of property by an executor, administrator, guardian or conservator.

CONSERVATOR: A person appointed by the probate court to take care of the person or property of an adult person needing such care.

CONSIDERATION: The inducement for entering into a contract, it consists of either a benefit to the promisor, or a loss or detriment to the promisee.

CONTINGENT: Dependent upon an uncertain future event.

CONVENTIONAL LOAN: A mortgage loan which is not insured or guaranteed by a governmental agency.

CONVEYANCE: A written instrument transferring the title to land or an interest therein from one person to another.

COVENANTS: Agreements contained in deeds and other instruments for the performance or nonperformance of certain acts, or the use or nonuse of property in a certain manner.

DEED: Written instrument by which the ownership of land is transferred from one person to another.

DEED OF TRUST: A security instrument used in many states, including California, in place of a Mortgage. A deed of trust is a three-party instrument wherein the property described in the deed of trust is transferred to a trustee by the borrower (trustor) in favor of the beneficiary (lender) and reconveyed by the "trustee" upon payment in full.

DEED IN LIEU OF FORECLOSURE: The property which is the subject of a default in the payment of the note obligation can be deeded to the beneficiary named in the deed of trust securing the note instead of going though the foreclosure process. At the time the property is deeded to the beneficiary, the beneficiary must concurrently reconvey their deed of trust lien.

DEFAULT: Failure to perform a duty or to discharge an obligation.

DEFICIENCY JUDGMENT: A personal judgment in a foreclosure action for the amount remaining due after a sale of the security.

DEPOSIT RECEIPT: Used when accepting "earnest money" to bind an offer for property by a prospective purchaser; also includes terms of a contract..

DOCUMENTARY TRANSFER TAX: A tax on the transfer of real property located in any county in the state. Applies when the consideration exceed $100. Tax is computed at the rate of $.55 for each $500.00 of consideration or fraction thereof. Additionally, some cities have their own City Transfer Taxes.

DOMINANT TENEMENT: The tenement obtaining the benefit of an easement appurtenant.

EARNEST MONEY: Something given as a part of the purchase price to bind a bargain.

EASEMENT: A right or interest in the land of another existing apart from the ownership of the land, such as a right to cross over another person's property.

EASEMENT APPURTENANT: An easement created for the benefit of a parcel of land. Such an easement belongs with the land.

EASEMENT IN GROSS: An easement created for the benefit of an individual a part ownership of land. A public utility easement is an example.

ENCROACHMENT: The extension of an improvement onto the property of another.

ENCUMBRANCE: A lien or charge on land.

EQUITY: Property value in excess of mortgages and other liens.

ESCHEAT: The reverting of property to the State of California.

ESCROW: A deposit of a deed or other instrument with a third party for delivery upon performance or a condition.

ESCROW ACCOUNT: An account in which the borrower's monthly deposits for taxes, hazard insurance, and FHA mortgage insurance are placed and held in trust by the lender aka: Impound Account.

ESCROW ANALYSIS: The periodic examination of escrow accounts to determine if monthly deposits will provide sufficient funds to pay tax and insurance bills when due.

ESTOPPEL: A doctrine which bars one from asserting rights which are inconsistent with a previous position or representation.

EXCULPATORY CLAUSE: Provision in a contract by which one party seeks to be absolved of liability for his negligent or other wrongful acts. An example is a clause in a contract providing that the buyer takes the property "as is," defects not visible to him. Such clauses generally have only a limited effect.

EXECUTOR: A person who is designated in a will as the representative of a decedent's estate.

FEDERAL HOUSING ADMINISTRATION (FHA): A Federal agency, created by the National Housing Act of 1934, for the purpose of expanding and strengthening home ownership by making private mortgage insurance program, with premiums paid by the homeowner, to protect lenders against loss on these higher-risk loans. Since 1965, FHA has been part of the Department of Housing and Urban Development (HUD).

FEE SIMPLE ABSOLUTE: An estate in real property which gives the owner the greatest power over the title. It establishes the title or real property in the owner without limitation or end.

FIDUCIARY: One who holds a thing in trust for another.

FINANCING STATEMENT: Evidence of a personal property security agreement that may be filed or recorded. Has replaced the chattel mortgage. Affects real property if it relates to crop or timber.

FIXTURE: A thing which was originally personal property but which has become attached to and is considered as part of the real property.

FORECLOSURE: A non-judicial proceeding brought on by the beneficiary under a deed of trust to extinguish all right, title and interest of the property owner in order to sell the property described in the deed of trust which is the subject of the foreclosure. The foreclosure proceeding and subsequent Trustee Sale is usually conducted by the Trustee under the deed of trust, or a substituted trustee, who issues a Trustee's Deed to the highest cash bidder at the trustee sale.

FULL RECONVEYANCE: This is the document used to remove a deed of trust lien from the public records. Once recorded, the (full) reconveyance transfers title from the Trustee under the deed of trust to the equitable property owner (Trustor or current owner) upon repayment of note secured by a deed of trust.

GRANT DEED: A form of deed common in California which contains implied warranties to the effect that the grantor has not previously conveyed or encumbered the property.

GRANTEE: The person to whom a grant is made.

GRANTOR: The person who makes a grant.

GUARDIAN: A person appointed by the probate court to care for the person or estate of a minor or incompetent person.

HEIRS: The persons designated by law to succeed to the estate of a decedent who leaves no will.

IMPOUND ACCOUNT: An account in which the borrower's monthly deposits for taxes, hazard insurance, and FHA mortgage insurance are placed and held in trust by the lender aka: Escrow Account.

INSTALLMENT NOTE: A promissory note providing for payment of the principal in two or more certain amounts at different stated times.

INTESTATE: Having made no will. A decedent who has left no will is said to have "died intestate."

INURE: To accrue to the benefit of a person.

IRREVOCABLE: Not to be revoked or withdrawn.

JOINT TENANCY: Title held by two or more persons in equal shares with right of survivorship.

JUDGMENT LIEN: A statutory lien created by recording an abstract of judgment.

LAND SALES CONTRACT: A contract used in connection with the sale of real property where the seller retains legal title until all or a certain part of the purchase price is paid by the buyer. Often used when property is sold on a small down payment.

LEASE: A contract for the possession of land in consideration of payment of rent.

LESSEE: The tenant under a lease.

LESSOR: The landlord under a lease.

LEVY: A seizure of property by judicial process.

LIEN: A charge upon property for the payment of a debt or performance of an obligation. Taxes, special assessments, and judgments, as well as mortgages, are liens/encumbrances. In addition, there are mechanic's and materialmen's liens for furnishing labor or materials.

LIFE ESTATE: An estate measured by the life of a natural person.

LIMITED PARTNERSHIP: A partnership composed of some partners whose contribution and liability are limited.

LIQUIDATED DAMAGES: An agreed-to-sum of money to be paid under a contract in the event of a breach where it would be difficult to prove the amount of actual damages.

LIS PENDENS: A notice of the filing of an action.

LISTING: An employment contract between a broker and his client.

MARKETABLE TITLE: A title free from reasonable doubt in law and in fact.

MECHANIC'S LIEN: A statutory lien in favor of laborers and materialmen who have contributed to a work of improvement.

METES AND BOUNDS: Measurements and boundaries.

MINOR: A person under 18 years of age.

MORTGAGE: A written document executed by the owner of land by which the land is given as security for the payment of a debt or performance of an obligation.

MORTGAGEE: 1he party who obtains the benefit of a mortgage.

MORTGAGOR: The party who executes a mortgage.

MUNIMENTS OF TITLE: Deeds and other original documents comprising a chain of title to a parcel of real property.

NOTICE OF COMPLETION: Notice recorded within ten days after completion of a work of improvements signaling commencement of the time period within which claims of mechanic's liens must be recorded.

NOTICE OF DEFAULT: Recorded notice that a default has occurred under a deed of trust.

NOTICE OF NONRESPONSIBILITY: Notice recorded by an owner to relieve the land from mechanic's liens under prescribed conditions.

NOTICE TO QUIT: Notice to a tenant to vacate.

NUNC PRO TUNC: Now for then. An order used by the courts to correct the record usually after a proceeding has been concluded.

OBLIGOR: One who places himself under a legal obligation e.g. a mortgagor.

OFFSET STATEMENT: Statement furnished to an escrow from a tenant regarding his rights of possession; also, by an owner of land subject to an encumbrance as to the amount due.

OPTION: A right to require an act to be done in the future.

ORDINANCE: A legislative enactment of a city or county.

OWNERSHIP: The right to the use and enjoyment of property to the exclusion of others.

PARTIAL RECONVEYANCE: Releases a portion of the property (not the obligation) described in the deed of trust. For example, a Subdivider/Builder will obtain a partial reconveyance under a blanket deed of trust each time a unit or lot is sold.

PARTNERSHIP: A voluntary association of two or more persons to carry on as co-owners of a business for profit.

PERSONAL PROPERTY: Movable property; all property which is not real property. Property consisting of chattels as contrasted to real estates; e.g. furniture, car, clothing.

POWER OF ATTORNEY: A written authorization to an agent to perform specified acts on behalf of his principal. May be a general (broad powers) or a limited power.

PREPAYMENT PENALTY: A penalty imposed against the borrower/trustor for paying the debt, in part or in full, prior to the note maturity date. Prepayment penalty provisions are now limited to the first five years of the loan.

PREPAYMENT PRIVILEGE: The right to prepay the promissory note, in part or in full, prior to its maturity date, without penalty.

PRESCRIPTION: A method of acquiring an easement by adverse use of another person's property for a period of time.

PRINCIPAL REDUCTION: An amount given, in addition to the regular note payments called for, to reduce the principal balance of the note.

PRIORITY: That which is earlier or previous in point of time or right, as the priority of a first mortgage over a second mortgage.

PROBATE COURT: The branch of the Superior Court that administers the estates of decedents, incompetents, minors, missing persons and so on.

PROMISSORY NOTE: A written paper promising to repay a loan in accordance with stipulated terms. The promissory note establishes a personal liability for payment on the part of the maker.

PRORATE: To divide equally or proportionately to the time of use. In a sales escrow, it is the custom to prorate taxes, interest, rents, and hazard insurance premiums between buyer and seller in accordance with the respective periods of ownership.

PUBLIC REPORT: A report issued by the Real Estate Commissioner containing information of interest to a buyer about newly subdivided property.

PURCHASE MONEY DEED OF TRUST: A deed of trust to secure payment of all or a portion of the purchase price of real property.

QUIET TITLE: An action to establish title to real property.

QUITCLAIM DEED: A deed which conveys whatever present right, title or interest the grantor may have.

REAL PROPERTY: Land and buildings affixed to the land, including the air space above and mineral rights below, as opposed to personal property or chattels.

RECONVEYANCE: A conveyance to the land owner of the title held by a trustee under a deed of trust.

RECORDATION: Filing for record in the office of the county recorder.

REINSTATEMENT: The curing of all defaults by a borrower, the restoration of a loan to current status through payment of arrearage.

RELEASE CLAUSE: A clause in a deed of trust providing for release of specified portions of the property upon compliance with certain conditions.

RELEASE OF OBLIGATION UNDER DEED OF TRUST: California Civil Code Section 2941 authorizes the use of a Release of Obligation (recorded when a Full Reconveyance cannot be obtained) provided that the party issuing the Release of Obligation can prove they paid the loan off in full. This document is typically prepared by the title insurance company who handled the escrow that satisfied a deed of trust lien. This document is not recognized outside of California at this time.

REMAINDER: A future interest in real property. It is an estate which takes effect after the termination of the prior estate, such as a life estate.

REQUEST FOR NOTICE OF DELINQUENCY: A form completed by the trustor (maker of the note) and the beneficiary under the note, and recorded for the benefit of the beneficiary who is a junior lien holder. This Notice will provide that the junior lien holder be notified if the trustor is more than 4 months delinquent on his senior loan. The notice to the junior lien holder is sent prior to the recording of the Notice of Default.

REQUEST FOR NOTICE OF DEFAULT: A document typically completed by the beneficiary of a junior Deed of Trust that, once recorded, enables the junior lien holder to receive a notice from the senior Deed of Trust Holder, within ten days of recording a Notice of Default.

RESCISSION: An action to annul the effect of executing a contract or other document.

RESERVATION: The creation on behalf of the grantor of a new right issuing out of the thing granted; such right may be· temporary or permanent.

RESTRICTIONS: Limitations on the use and enjoyment of property; usually referred to as covenants, conditions and restrictions (CC&R).

REVERSIONARY INTEREST: The interest which a person has in lands or other property on the termination of a lesser estate, such as a leasehold estate.

RIGHT OF SURVIVORSHIP: The right to succeed to the interest of a deceased joint tenant. It is the distinguishing feature of a joint tenancy.

RIGHT OF WAY: A right to cross over a parcel of land.

SATISFACTION: Performance of the terms of an obligation.

SEAL: An impression upon a document which lends authenticity to its execution.

SECURITY: Collateral; property pledged to secure repayment of a debt.

SECURITY AGREEMENT: Document now used in place of a chattel mortgage as evidence of a lien on personal property. A financing statement may be filed or recorded to give constructive notice of the security agreement.

SECURITY DEPOSIT: A deposit made to assure performance of an obligation, usually by a lessee.

SECURITY INTEREST: The interest of the creditor in the property of the debtor pledged or hypothecated to secure payment of a debt or performance of an obligation.

SEPARATE PROPERTY: Property acquired before marriage and property acquired during marriage by gift, devise, descent or bequest.

SERVIENT TENEMENT: An estate burdened by an easement.

SERVITUDE: A right in the nature of an easement.

SEVERALTY OWNERSHIP: Ownership of property by one person alone; sole ownership.

SPECIAL ASSESSMENTS: Charge on property for its share of special levies, as distinguished from taxes levied for the general support of government.

SUBORDINATION AGREEMENT: An agreement under which a prior lien is made inferior to an otherwise junior lien.

SUBSTITUTION OF TRUSTEE AND FULL RECONVEYANCE: (Value in California) A document used when the beneficiary wishes to substitute a different trustee (or themselves) under their deed of trust in place of the beneficiary names in the original, recorded deed of trust.

SURVEY: A map or plat containing a statement of courses, distances and quantity of land and showing boundary lines of real property. Also, a process of measuring a parcel of land and ascertaining its area and boundaries.

TENANCY IN COMMON: Ownership of property by two or more persons in an undivided interest without right of survivorship.

TENDER: An unconditional offer of payment of a debt.

TENURE: The manner in which land is held.

TESTAMENTARY TRUST: A trust created by will, effective when the testator dies, as distinguished from a living or inter vivos trust (which is effective during the lifetime of the trustor).

TITLE: Evidence of a person's right or the extent of his interest in property.

TRUST: A fiduciary relationship in which one party (trustee) holds the title to property for the benefit of another party (beneficiary).

TRUSTEE: The person to whom property is conveyed in trust; or one who holds title to real property as trustee under terms of a deed of trust.

TRUSTEE'S DEED: Deed given by the trustee under a deed of trust when the property is sold under the power of sale.

TRUSTOR: The person who conveys property in trust; the borrower under a deed of trust.

UNLAWFUL DETAINER: An action to recover possession of real property.

USURY: An unconscionable or exorbitant rate of interest; an excessive and illegal requirement of compensation for forbearance on a debt; a bargain under which a greater profit than is permitted by law is paid, or is agreed to be paid, to a creditor by or on behalf of the debtor for a loan of money, or for extending the maturity of a pecuniary debt.

VEST: to give an immediate, fixed right in property, with either present or future enjoyment of possession; also denotes the manner in which title is held.

VESTED INTEREST: An interest that is fixed or determined.

WAIVER: A relinquishment or abandonment of a right.

WILL: A disposition of property effective upon the maker's death; often referred to as "last will and testament."

WRIT: A process of the court under which property may be seized and sold.