Glossary of Terms
Abstract (of Judgment)
A summary of a money judgment obtained in court. (When this summary or abstract is recorded in the county clerk’s or recorder’s office, in some states the judgment becomes a lien on the debtor’s property.)
Abstract (of Title)
A summary of the public records relating to the title to a particular piece of property. An abstract in some states or areas is reviewed by an attorney or title insurance company to determine whether there are any title defects affecting the property, which must be cleared or paid before a buyer can purchase marketable and insurable title.
A reduction or decrease. Usually applies to a decrease in the assessed value of a property resulting in lower property taxes after the assessment.
Clause in a deed of trust or mortgage, which “accelerates” the time when the balance of the loan becomes due. For example, some mortgages contain a provision (an acceleration clause) stating that the full amount of the note shall become immediately due and payable upon the sale of the property or if regular mortgage payments are not made.
The recording of an instrument with the county clerk or recorder by a title company merely as a convenience to a customer; such as a deed between family members. There is no title insurance, nor does the title company assume any responsibility for the correctness or validity of the instrument.
A formal declaration before a duly authorized officer (normally a notary public) by a person who has executed an instrument that such execution is his or her own act and deed. An acknowledgment is usually necessary before a county clerk’s or recorder’s office will accept an instrument for recording. The acknowledgment is either part of, or attached to, the instrument.
Adjustable Rate Mortgage (ARM)
A loan with an interest rate that changes periodically, to more closely coincide with current interest rates. The amounts and times of adjustment are agreed to at the inception of the loan. Typically, however, ARMs can increase two percentage points per year or six percentage points above the initial interest rate.
A person appointed by a probate or surrogate court to carry out the administration of a decedent’s estate, when the decedent has left no will. If a woman is appointed, she is called an Administratrix.
A process of acquiring title to land by taking possession for a certain (statutory) period of time, in addition to fulfilling certain other conditions.
A written statement or declaration, sworn to before an officer who has authority to administer an oath, such as a notary public.
One who has authorization, either expressed or implied, to act for or represent another party, usually in business matters. For example, a title agent is authorized to issue title insurance policies on behalf of a particular title insurer (underwriter) for a portion of the title premium.
Agreement of Sale
A written contract entered into between a seller (vendor) and buyer (vendee) for the sale/purchase of real property (land). It is known by various names such as contract of sale, sales agreement, contract of purchase, purchase agreement.
A title premium rate, which includes the charge for the title insurance policy, as well as the costs associated with the search, abstract, and examination incidental to the issuance of the title insurance policy. Check with your title company to determine if this rate is available in your state.
ALTA (American Land Title Association)
An organization composed of title insurance companies, title agents, and others involved in the title insurance industry, which sets standards for the industry, including title insurance policy forms used on a national basis.
A payment plan which enables a borrower to reduce his or her debt gradually through periodic regular payments of both interest and principal that are equal or nearly equal.
Note: The terms contained on this website are defined in their most commonly used form. Should more precise interpretations of these terms be necessary, we advise you to seek the counsel of an attorney.