Absentee Owner - An owner of property who does not occupy said property.

Abstract of Judgment - A summary of money obtained in court.
(When this summary of abstract is recorded in the county recorder's
office in some states the judgment becomes a lien on the debtor's
property, both presently owned or after acquired.)

Accrued Interest - Interest on a note, bond, etc. which has been earned
but not yet paid. Since interest is usually paid in arrears, accrued interest does not necessarily indicate a delinquency in payment.

Adjustable Mortgage Loans (AMLS) - Mortgage loans under which the interest is periodically adjusted to more closely coincide with current
interest rates. The amounts and time of adjustment are agreed to at the inception of the loan. Also called: Adjustable Rate Loans, Adjustable
Rate Mortgages (ARMS), Flexible Rate Loans or Variable Rate Loans.

ALTA -(American Title Association) - An organization, composed of
title insurance companies, which has adopted certain insurance policy
forms to standardize coverage on a national basis.

Amortization - Payment of debt in regular, periodic installments of
principal and interest, as opposed to interest only payments.

Annual Percentage Rate (APR) - The yearly interest percentage of
a loan, as expressed by the actual rate of interest paid. The A.P.R. is
disclosed as a requirement of Federal Truth in Lending statutes.

Appraisal - An opinion of value based upon a factual analysis. Legally, an estimation of value by two disinterested persons of suitable qualifications.

Appraisal Report - A written report by an appraiser containing his
opinion as to the value of a property and the reasoning leading to this
opinion. The factual data supporting the opinion, such as comparables, appraisal formulas, and qualifications of the appraiser, will also be set forth.

Appraised Value - An opinion of the value of a property at a given time, based on facts regarding the location, improvements, etc. of the property
and surroundings.

Appraiser - One who is trained and educated in the methods of
determining the value of property through analysis of various factors which determine said value.

Appreciation - An increased value of property due to either a positive improvement of the area or the elimination of negative factors. Commonly,
and incorrectly, used to describe an increase in value through inflation.

Arrears - (1) Payment made after it is due is in arrears. (2) Interest is
said to be paid in arrears since it is paid to the date of payment rather in advance, as is rent. Example: A rental payment made July 1 pays the rent
to August 1. An interest payment made July 1 pays the interest to July 1.

Assets - Everything owned by a person or corporation which can be
used for the payment of debts.

Balloon Note - A note calling for periodic payments which are
insufficient to fully amortize the face amount of the note prior to maturity,
so that a principal sum known as a "balloon" is due at maturity.

Broker, Real Estate - One who is licensed by the state to carry on the business of dealing in real estate. A broker may receive a commission for
his or her part in bringing together a buyer and seller, landlord and tenant,
or parties to an exchange.

Buydown - A payment to the lender from the seller, buyer, third party, or some combination of these, causing the lender to reduce the interest rate during the early years of a loan. The buydown is usually the 1st 1 to 5
years of the loan.

Cap - The maximum increase of an Adjustable Rate Mortgage.
Example: the original loan is made at 10% with a 5% cap. The interest
rate on the loan may not exceed 15% regardless of index changes.

CC&R's (Covenants, Conditions, and Restrictions) - A term used in
some areas to describe the restrictive limitations which may be placed
on property. In other areas, simply called restrictions.

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 a sale of real estate, such as loan fees, title fees, appraisal fees, etc.

Closing Statement - The statement which lists the financial settlement between buyer and seller, and also the costs each must pay.
A separate statement for buyer and seller is sometimes prepared.

Combined Loan To Value (CLTV) - The combined loan amounts
as a percentage against the value of the property.

Community Property - Property owned in common by a husband and wife, which was not acquired as separate property. A classification of property peculiar to certain states.

Compound Interest - Interest paid on accumulated interest as well as
on the principal.

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 surfaced (exclusive
of paint or other finishes) of the exterior walls, floors, and ceiling.
The balance of the property is called common area.

Construction Loan - Short term financing of real estate construction. Generally followed by long term financing called a "take out" loan,
issued upon completion of improvements.

Conventional Loan - A mortgage or deed of trust not obtained under a government insured program, (such as FHA or VA).

Conveyance - Transfer of title to land. Includes most instruments by
which an interest in real estate is created, mortgaged, or assigned.

Credit - The financial worthiness of a borrower. The history of
whether this borrower has met financial obligations on time in the past.

Credit Report - A report on the past ability of a loan applicant to pay installment payments. Several national and local companies make such reports.

DBA (Doing Business As) - An identification of the owner or owners
of a business and the business name. Not a partnership or corporation.

Debit - An accounting term used to designate a payment or owing,
as opposed to a credit which is a receiving or being used.

Debtor - One who owes a debt.

Decree - The judgment of a court.

Deed - Actually, any one of many conveying or financing instruments,
but generally a conveying instrument, given to pass free title to
property upon sale.

Deed In Lieu Of Foreclosure - A deed given by an owner/borrower
to a lender to prevent the lender from bringing foreclosure proceedings.
The validity of the deed depends to some degree on "fairness" under the circumstances, and adequacy of consideration will be considered.

Deed of Trust - An instrument used in many states in place of a mortgage. Property is transferred to a trustee by the borrower (trustor), in favor of the lender (beneficiary), and reconveyed upon payment in full.

Defective Title - (1) Title to a negotiable instrument obtained by fraud.
(2) Title to real property which lacks some of the elements necessary to transfer good title.

Deferred Payments - (1) Payments to begin at a future time.
(2) Installment Payments.

Deficiency Judgment - Commonly, the amount for which the borrower is personally liable on a note and mortgage if the foreclosure sale does not
bring enough to cover the debt. Actually the judgment is for the total
amount and not for the deficiency, the recovery from the foreclosure
sale being deducted from this amount.

Demand - (1) The quantity of goods which can be sold at a specified price,
in a given market, at a particular time. (2) A letter from a lender showing
the amount due in order to pay off a mortgage or trust deed.

Department of Real Estate - That department of the state government responsible for the licensing and regulation of persons engaged in the real estate business. The person heading the department is usually called
The Real Estate Commissioner. Other names for the department are the division of Real Estate and The Real Estate Commission.

Depreciation - (1) Decrease in value to real property improvements
caused by deterioration obsolescence, (2) A loss in value as an
accounting procedure to use as a deduction for income tax purposes.

Derog - A slang shortening of the word derogatory. Used in reference to information on a credit report.

Discount - The difference between face value on an installment note and mortgage or deed of trust, and the present cash value.

Documentary Transfer Tax - A state tax on the sale of real property,
based on the sale price or equity transferred, being $.55 for each $500 of
the taxable amount in most states. Some states use $1.10 per $1,000;
$.50 per $500; $1.00 per $1,000.

Equity - The market value of real property, less the amount of
existing liens.

Escrow - Delivery of a deed by a grantor to a third party for delivery to
the grantee upon the happening of a contingent event. Modernly, in some states, all instruments necessary to the sale (including funds) are
delivered to a third (neutral) party, with instructions as to their use.

Escrow Instructions - Instructions which are signed by both buyer and
seller, and which enable an escrow agent to carry out the procedures necessary to transfer real property, a business, or other assignable interest.