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					Dictionary of Mortgage Terms

                   Select the appropriate letter
                   for a listing of all the glossary
                   terms that begin with that
                   letter. Then, locate the word
                   you are looking for.

           A   B   C       D        E         F

           G   H   I       J        K         L

       M   N   O   P       Q        R         S

       T   U   V   W       X        Y         Z
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TERM                                                         DEFINITION
Acceleration Clause    A provision in a mortgage that gives the lender the right to demand payment of the entire principalbalance if a
                       monthly payment is missed. The clause in a mortgage or deed of trust that can be enforced to make the entire debt
                       due immediately if the borrower defaults on an installment payment or othercovenant.

Abandonment            Surrender of property rights with no intention of reclaiming them mere nonuse is not necessarily abandonment.

Abstract               A summary; an abridgement. Before the use of photo static copying, public records were kept by abstracts of
                       recorded documents

Abstract Of Title      The condensed history of a title to a particular parcel of real estate, consisting of a summary of the original grant
                       and all subsequent conveyances and encumbrances affecting the property and certification by the abstractor that
                       the history is complete and accurate.

Acceptance             An offeree’s consent to enter into a contract and be bound by the terms of the offer.

Accession              Acquiring title to additions or improvements to real property as a result of the annexation of fixtures or the accretion
                       of alluvial deposits along the banks of streams.

Account                Relationship under a particular name, usually evidenced by a deposit against which withdrawals can be made.
                       Among them are demand, time, custodial, joint, trustee, corporate, special, and regular accounts.

Accretion              The increase or addition of land by the deposit of sand or soil washed up naturally from a river, lake or sea.

Accrued Interest       Interest that has accumulated between the most recent payment and the sale of a bond or other fixed income
                       security. Accrued interest is calculated by multiplying the rate by the number of days that have elapsed since last

Accrued Items          On a closing statement, items of expense that are incurred but not yet payable, such as interest on a mortgage loan
                       or taxes on real property.

Acknowledgment         A formal declaration made before a duly authorized officer, usually a notary public, by a person who has signed a

Acquired Lands         Lands owned by the United States, obtained by purchase, donation, or condemnation.

Acquisition            Real property acquired by purchase, condemnation, donation, new construction, exchange, or
                       assignment/reassignment by GSA.

Acre                   A measure of land equal to 43,560 square feet, 4,840 square yards, 4,047 square meters, 160 square rods or
                       0.4047 hectares. The (English) acre is a unit of area equal to 43,560 square feet, or 10 square chains, or 160
                       square poles. It derives from a plowing area that is 4 poles wide and a furlong (40 poles) long. A square mile is 640
                       acres. The Scottish acre is 1.27 English acres. The Irish acre is 1.6 English acres.

Activation (AF)        Starting up an Air Force function at an Air Force installation or facility.

Actual Eviction        The legal process that results in the tenants being physically removed from the leased premises.

Actual Notice          Express information or fact; that is which known; direct knowledge

Ad Quod Damnum         A writ causing an evaluation of damages that might result from someone’s actions. Example: you wish to dam a
                       creek on your land to power a mill. The pond may damage another’s land.

Ad Valorem Tax         A tax levied according to value, generally used to refer to real estate tax. Also called the general tax.

Additional Principal
Payment                A payment by a borrower of more than the scheduled principal amount due in order to reduce the remaining
                       balance on the loan.

Mortgage (ARM)         A loan characterized by fluctuating interest rate, usually one tied to a bank or savings and loanassociation cost-of-
                       funds index. A mortgage that permits the lender to adjust the mortgage’s interest rate periodically on the basis of
                       changes in a specified index. Interest rates may move up or down, as market conditions change.

Adjusted Basis         The original cost of a property plus the value of any capital expenditures for improvements to the property minus
                       any depreciation taken. See Basis

Adjustment Date        The date on which the interest rate changes for an adjustable-rate mortgage (ARM).

Adjustment Period      The period that elapses between the adjustment dates for an adjustable-rate mortgage (ARM).

Or Administratrix      A person appointed by the court to settle the estate of someone who died interstate.
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Admit                       See Copyhold.

Adverse Possession          Gaining title to another’s land by exercising the rights of ownership of that land unchallenged for aperiod of time,
                            typically on the order of five to ten years, and meeting other requirements (as set by each state). See Seizin.

Affidavit Of Title          A written statement, made under oath by a seller or grantor of real property and acknowledged by a notary public, in
                            which the grantor (1) identifies himself or herself and indicates marital status (2) certifies that since the examination
                            of the title on the date of the contracts no defects have occurred in the title and (3) certifies that he or she is in
                            possession of the property. (if applicable)

Affordability Analysis      A detailed analysis of your ability to afford the purchase of a home. An affordability analysis takes into consideration
                            your income, liabilities, and available funds, along with the type of mortgage you plan to use, the area where you
                            want to purchase a home, and the closing costs that you might expect to pay.

Air Rights                  The right to use the open space above a property, usually allowing the surface to be used for another purpose.

Alien                       To transfer (lands, title) to another.

Alienation                  A transfer of title or property to another.

Alienation Clause           The clause in a mortgage or deed of trust that states that the balance of the secured debt becomes immediately
                            due and payable at the lender’s option if the property is sold by the barrower. In effect this clause prevents the
                            borrower from assigning the debt without the lender’s approval.

Aliquot                     The description of fractional section ownership used in the U.S. public land states. A parcel is generally identified by
                            its section, township, and range. The aliquot specifies its precise location within the section, for example, the
                            northwest quarter of the southeast quarter.

Allodial                    See Alodium

Allodial System             A system of land ownership in which the land is held free and clear of rent or service due to the government;
                            commonly contrasted to the feudal system. Land is held under the allodial system in the United States.

Alodium                     Land owned independently, without rent or other obligation to another. See Freehold Estate. The allodial (also
                            ‘allodial’) system is opposed to the feudal system.

Ambient Air
Quality Standards           Standards established on a state or federal level that define the limits for airborne concentrations of designated
                            criteria pollutants (nitrogen dioxide, sulfur dioxide, carbon monoxide, ozone, lead), to protect public health with an
                            adequate margin of safety (primary standards) and public welfare, including plant and animal life, visibility, and
                            materials (secondary standards).

Amenity                     A feature of real property that enhances its attractiveness and increases the occupant’s or user’s satisfaction
                            although the feature is not essential to the property’s use. Natural amenities include a pleasant or desirable location
                            near water, scenic views of the surrounding area, etc. Human-madeamenities include swimming pools, tennis
                            courts, community buildings, and other recreational facilities.

American Land Title
Association (ALTA) Policy   A title insurance policy that protects the interest in a collaterals property of a mortgage lender who originates a new
                            real estate loan.

Amortization                The gradual repayment of a mortgage loan by installments.

Amortization Schedule       A schedule showing each payment of a loan to be amortized and breaking down the payment into the amount
                            applied to principal and the amount applied to interest. A timetable for payment of a mortgage loan. An amortization
                            schedule shows the amount of each payment applied to interest and principal and shows the remaining balance
                            after each payment is made.

Amortization Term           The amount of time required to amortize the mortgage loan. The amortization term is expressed as a number of
                            months. For example, for a 30-year fixed-rate mortgage, the amortization term is 360 months.

Amortize                    To repay a mortgage with regular payments that cover both principal and interest.

Amortized                   Loan A loan in which the principal as well as the interest payable in monthly or other periodic installments over the
                            term of the loan.

Annexation                  A procedure by which a municipality, such as a city, town, or village, incorporates land within the corporate limits of
                            the municipality; procedures vary depending on state law.

Annual Mortgagor
Statement                   A report sent to the mortgagor (the borrower) each year. The report shows how much was paid in taxes and interest
                            during the year, as well as the remaining mortgage loan balance at the end of the year.
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Annual Percentage
Rate (APR)              The cost of a mortgage stated as a yearly rate; includes such items as interest, mortgage insurance, and loan
                        origination fee (points). The relationship of the total finance charges associated with a loan. This must be disclosed
                        to borrowers by lenders under the Truth-in-Lending act. The yearly interest percentage as expressed by the actual
                        rate of interest paid. For example: 6% add on interest would be much more than 6% simple interest.

Annuity                 An amount paid yearly or at other regular intervals, often on a guaranteed dollar basis.

Anticipation            The appraisal principal that holds that value can increase or decrease based on the expectation of some future
                        benefit or detriment produced by the property

Antitrust Laws          Laws designed to preserve the free enterprise of the open marketplace by making illegal certain private
                        conspiracies and combinations formed to minimize competition. Most violations of antitrust laws in the real estate
                        business involve either price-fixing (brokers conspiring to set fixed compensation rates) or allocation of customers or
                        markets (brokers agreeing to limit their areas of trade or dealing to certain areas or properties.

Application             A form used to apply for a mortgage loan and to record pertinent information concerning a prospective mortgagor
                        and the proposed security. Lenders use the information on the loan application to evaluate whether or not they can
                        give the loan, and if so, the amount of money they can lend.

Appraisal               An opinion of value based upon a factual analysis. Legally, an estimation of value by two disinterested persons of
                        suitable qualifications. An estimate of the quantity, quality or value of something. The process through which
                        conclusions of property value are obtained; also refers to the report that sets forth the process of estimation and
                        conclusion of value. A written analysis of the estimated value of a property prepared by a qualified appraiser.
                        Contrast with home inspection.

Appraised Value         An opinion of a property’s fair market value, based on an appraiser’s knowledge, experience, and analysis of the

Appraiser               A person qualified by education, training, and experience to estimate the value of real property and personal

Appreciation            An increase in the value of a property due to changes in market conditions or other causes. The opposite of
                        depreciation. An increase in the worth or value of a property due to economic or related causes, which may prove to
                        be either temporary or permanently opposite of depreciation.

Appurtenance Easement   An easement that is annexed to the ownership of one parcel and allows the owner the use of neighbor’s land.

Appurtenances           Easements, rights of way, or agreements attached to land.

Armory                  A structure that houses one or more units of a Reserve Component and is used for training andadministering those
                        units. It includes adjacent or supporting structures and improvements that are usedfor unit training.

Arpent                  Unit of length and area used in France, Louisiana, and Canada. As a unit of length, approximately 191.8 feet (180
                        old French ‘pied’, or foot). The (square) arpent is a unit of area, approximately .845 acres, or 36,802 square feet.

Artifact                Any product of human cultural activity; more specifically, any tools, weapons, artworks, etc, found in archeological

Asbestos                A carcinogenic substance formerly used widely as an insulation material by the construction industry and often
                        found in older buildings.

Assemblage              The combining of two or more adjoining lots into one larger tract to increase their total value.

Assessed Value          The valuation placed on property by a public tax assessor for purposes of taxation. Value placed uponproperty for
                        property tax purposes.

Assessment              The imposition of a tax, charge or levy, usually according to established rates. The process of placing a value on
                        property for the strict purpose of taxation. May also refer to a levy against property for a special purpose, such as a
                        sewer assessment.

Assessment Rolls        The public record of taxable property.

Assessor                A public official who establishes the value of a property for taxation purposes.

Asset                   Anything of monetary value that is owned by a person. Assets include real property, personal property, and
                        enforceable claims against others (including bank accounts, stocks, mutual funds, and so on). More

Assignment              The transfer of a mortgage from one person to another. The transfer in writing of interest in a bond,mortgage, lease
                        or other instrument.

Assigns                 Anyone acting on behalf of or in place of the nominal owner. The owner may have transferred his rights to someone
                        else or appointed an attorney to act on his behalf.

Assumable Mortgage      A mortgage that can be taken over (“assumed”) by the buyer when a home is sold.
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Assumption                    The transfer of the seller’s existing mortgage to the buyer. See assumable mortgage.

Assumption Clause             A provision in an assumable mortgage that allows a buyer to assume responsibility for the mortgagefrom the seller.
                              The loan does not need to be paid in full by the original borrower upon sale or transfer ofthe property.

Assumption Fee                The fee paid to a lender (usually by the purchaser of real property) resulting from the assumption of anexisting

Assumption Of
Mortgage                      Acquiring title to property on which there is an existing mortgage and agreeing to be personally liable for the terms
                              and conditions of the mortgage, including payments.

At Will                       Terminable by the lord of the manor at any time.

Attachment                    The act of taking a person’s property into legal custody by writ or other judicial order to hold it available for
                              application to that person’s debt to a creditor.

Attainment Area               An area that meets the National Ambient Air Quality Standards for a criteria pollutant under the Clean Air Act or
                              meets state air quality standards.

Attorney-In-Fact              One who holds a power of attorney from another to execute documents on behalf of the grantor of the power.

Attorney’s Opinion
Of Title                      An abstract of title that an attorney has examined and has certified to be, in his or her opinion, an accurate
                              statement of the facts concerning the property ownership.

Automated Underwriting        Computer systems that permit lenders to expededite the loan approval process and reduce lending cost.

Automatic Extension           A clause in a listing agreement that states that the agreement will continue automatically for a certain period of time
                              after its expiration date. In many states, use of this clause is discouraged or prohibit

Auxiliary Installation (AF)   An installation with an aircraft operating area that provides operational activities in support of a primaryinstallation
                              and depends upon a primary installation for administrative and logistical support.

Avulsion                      The sudden tearing away of land, as by earthquake, flood, volcanic action or the sudden change in the course of
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TERM                                                            DEFINITION
Balance                    The appraisal principal that holds that value can increase or decrease based on the expectation of some future
                           benefit or detriment produced by the property

Balance Sheet              A financial statement that shows assets, liabilities, and net worth as of a specific date.

Balloon                    (1) A final payment of a balloon note. (2) A landlocked parcel of land.

Balloon Mortgage           A mortgage that has level monthly payments that will amortize it over a stated term but that provides for a lump sum
                           payment to be due at the end of an earlier specified term. The principal and interest on the loan are amortized over
                           a longer period than the actual term of the mortgage.

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.

Balloon Payment            A final payment of a mortgage loan that is considerably larger than the required periodic payments because the
                           loan amount was not fully amortized. The final lump sum payment that is made at the maturity date of a balloon

Balls                      Slang for numeric .00, as in 4

Bank                       Edge of a stream.

Bankrupt                   A person, firm, or corporation that, through a court proceeding, is relieved from the payment of all debts after the
                           surrender of all assets to a court-appointed trustee.

Bankruptcy                 A proceeding in a federal court in which a debtor who owes more than his or her assets can relieve the debts by
                           transferring his or her assets to a trustee.

Bargain                    Mutual agreement among two or more people to exchange or purchase goods.

Bargain And Sale Deed      A deed that carries with it no warranties against liens or other encumbrances but that does not imply that the
                           grantor has the right to convey title. The grantor may add warranties to the deed at his or her discretion.

Base Line                  The mail imaginary line running east and west and crossing a principal meridian at a definite point, used by
                           surveyors for reference in locating and describing land under the rectangular (government) survey system of legal

Basis                      The financial interest that the Internal Revenue Service attributes to an owner of an investment property for the
                           purpose of determining annual depreciation and gain or loss on the sale of the asset. If a property was acquired by
                           purchase, the owner’s basis is the cost of the property plus the value of any capital expenditures for improvements
                           to the property, minus any depreciation allowable or actually taken. This new basis is called the adjusted basis.

Before-Tax Income          Income before taxes are deducted.

Bench Mark                 A permanent reference mark or point established for use by surveyors in measuring differences in elevation. A
                           survey mark made on a monument having a known location and elevation, serving as a reference point for

Beneficiary                (1) The person for whom a trust operates or in whose behalf the income from a trust estate is drawn. (2) A lender in
                           a deed of trust loan transaction. The person designated to receive the income from a trust, estate, or a deed of

Bequest                    A gift of personal property made in a will. See also Devise. To transfer personal property through a will.

Betterment                 An improvement that increases property value as distinguished from repairs or replacements that simply maintain

Bilateral Contract         See Contract

Bill of Sale               A written document that transfers title to personal property.

Binder                     An agreement that may accompany an earnest money deposit for the purchase of real property as evidence of the
                           purchaser’s good faith and intent to complete the transaction. A preliminary agreement, secured by the payment of
                           an earnest money deposit, under which a buyer offers to purchase real estate.

Biweekly Payment
Mortgage                   A mortgage that requires payments to reduce the debt every two weeks (instead of the standard monthly payment
                           schedule). The 26 (or possibly 27) biweekly payments are each equal to one-half of the monthly payment that would
                           be required if the loan were a standard 30-year fixed-rate mortgage, and they are usually drafted from the
                           borrower’s bank account. The result for the borrower is a substantial savings in interest.

Blanket Insurance Policy   A single policy that covers more than one piece of property (or more than one person).
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Blanket Loan             A mortgage covering more than one parcel of real estate, providing for each parcel’s partial release from the
                         mortgage lien upon repayment of a definite portion of the debt.

Blanket Mortgage         The mortgage that is secured by a cooperative project, as opposed to the share loans on individual units within the

Blockbusting             The illegal practice of inducing homeowners to sell their properties by making representations regarding the entry or
                         prospective entry of persons of a particular race or nationality into the neighbors.

Blue-Sky Laws            Common name for those state and federal laws that regulate the registration and sale of investment securities.

Bona Fide                In good faith, without fraud.

Bond                     An interest-bearing certificate of debt with a maturity date. An obligation of a government or business corporation. A
                         real estate bond is a written obligation usually secured by a mortgage or a deed of trust.

Book Value               The value of a property as a capital asset (cost plus additions to value, less depreciation).

Boot                     Money or property given to make up any differences in value or equity between two properties in an exchange.

Bottom                   Land along a river.

BRAC                     Base closure and realignment, related to or actions of the Defense Base Closure and Realignment Commission in
                         accordance with the Defense Base Closure and Realignment Act of 1990 (Public Law 100-510).

Branch                   Small stream.

Branch Office            A secondary place of business apart from the principal or main office from which real estate business is conducted.
                         A branch office usually must be run by a licensed real estate broker working on behalf of the broker.

Breach                   A violation of any legal obligation.

Breach Of Contract       Violation of any terms or conditions in a contract with out legal excuse; for example, failure to make payment when
                         its due.

Bridge Loan              A form of interim loan, generally made between a short term loan and a permanent (long term) loan, when the
                         borrower needs to have more time before taking the long term financing. A form of second trust that is collateralized
                         by the borrower’s present home (which is usually for sale) in a manner that allows the proceeds to be used for
                         closing on a new house before the present home is sold. Also known as “swing loan.”

Broker                   One who acts as an intermediary on behalf of others for a fee or commission. A person who, for a commission or a
                         fee, brings parties together and assists in negotiating contracts between them.

Brokerage                The bringing together of parties interested in making a real estate transaction

Brook                    Small stream.

Budget                   A detailed plan of income and expenses expected over a certain period of time. A budget can provide guidelines for
                         managing future investments and expenses.

Budget Category          A category of income or expense data that you can use in a budget. You can also define your own budget
                         categories and add them to some or all of the budgets you create. “Rent” is an example of an expense category.
                         “Salary” is a typical income category.

Buffer Zone              A strip of land, usually used as a park or designated for a similar use, separating land and dedicated to another use.

Building (AF)            A physical plant and its improvements, including installed, permanently attached building equipment that helps
                         personnel use the building and its systems.

Building Code            An ordinance that specifies minimum standards of construction for buildings to protect public safety and health.
                         Local regulations that control design, construction, and materials used in construction. Building codes are based on
                         safety and health standards.

Building Construction,
Permanent                A building suitable and appropriate to serve a specific purpose for a maximum period of time (minimum 25 years)
                         and with a minimum of maintenance.

Building Construction,
Semi-Permanent           A building suitable and appropriate to serve a specific purpose for a limited period of time (less than 25 years and
                         more than 5 years) with a moderate to high degree of maintenance

Building Construction,
Temporary                A building suitable and appropriate to fill a need for a short period of time (5 years or less) without regard to degree
                         of maintenance, the designs and details of which provide minimum facilities with maximum initial economies
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Building Permit          Written governmental permission for the construction, alteration or demolition of an improvement, showing
                         compliance with building codes and zoning ordinances.

Bulk Transfer            See Uniform Commercial Code

Bundle Of Legal Rights   The concept of land ownership that includes ownership in all legal rights to the land-for example, possession,
                         control within the law and enjoyment.

Burn                     See shoot

Buy Down                 A financing technique used to reduce the monthly payments for the first few years of a loan. Funds in the form of
                         discount points are given to the lender by the builder or seller to by down or lower the effective interest rate paid by
                         the buyer, this reducing the monthly payments for a set time.

Buydown Account          An account in which funds are held so that they can be applied as part of the monthly mortgage payment as each
                         payment comes due during the period that an interest rate buydown plan is in effect.

Buydown Mortgage         A temporary buydown is a mortgage on which an initial lump sum payment is made by any party to reduce a
                         borrower’s monthly payments during the first few years of a mortgage. A permanent buydown reduces the interest
                         rate over the entire life of a mortgage.

Buyer-Agency Agreement   A principal-agent relationship in which the broker is the agent for the buyer, with fiduciary responsibilities to the
                         buyer. The broker represents the buyer under the law of agency.

Buyer’s Agent            A residential real estate broker or salesperson who represents the prospective purchaser in a transaction. The
                         buyer’s agent owes the buyer/principal the common-law or statutory agency duties.

Buyer’s Broker           A residential real estate broker who represents prospective buyers exclusively, as they buyer’s agent, the broker
                         owes the buyer/principal the common-law statutory agency duties.
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TERM                                                               DEFINITION
Cadastral Map                Land ownership map. Generally used for tax purposes.

Cadastral Record             A public record, survey, or map of the value, extent, and ownership of land as a basis for taxation. Such records for
                             Army-controlled lands are maintained exclusively by the Corps of Engineers

Call                         Any feature, landmark, or measurement called out in a survey. For example, “two white oaks next to the creek” is a

Call Option                  A provision in the mortgage that gives the mortgagee (the lender) the right to call the mortgage due and payable at
                             the end of a specified period for whatever reason.

Cap                          A provision of an adjustable-rate mortgage (ARM) that limits how much the interest rate or mortgage payments may
                             increase or decrease. See lifetime payment cap, lifetime rate cap, periodic payment cap, and periodic rate cap.

Capital                      (1) Money used to create income, either as an investment in a business or an income property. (2) The money or
                             property comprising the wealth owned or used by a person or business enterprise. (3) The accumulated wealth of a
                             person or business. (4) The net worth of a business represented by the amount by which its assets exceed

Capital Gain                 Profit earned from the sale of an asset.

Capital Improvement          Any structure or component erected as a permanent improvement to real property that adds to its value and useful

Capitalization               A mathematical process for estimating the value of a property using a proper rate of return on the investment and
                             the annual net operating income expected to be produced by the property. The formula is expressed Income (over)
                             rate = value

Capitalization Rate          The rate of return a property will produce on the owner’s investment

Cash Flow                    In investment property, the actual cash the investor will receive after deduction of operating expenses and debt
                             service (loan payment) from his gross income. The net spendable income from and investment, determined by
                             deducting all operating and fixed expenses from the gross income. When expenses exceed income, a negative
                             cash flow results.

Cash Rent                    In an agricultural lease, the amount of money given as rent to the land owner at the outset of the lease, as opposed
                             to sharecropping.

Cash-Out Refinance           A refinance transaction in which the amount of money received from the new loan exceeds the total of the money
                             needed to repay the existing first mortgage, closing costs, points, and the amount required to satisfy any
                             outstanding subordinate mortgage liens. In other words, a refinance transaction in which the borrower receives
                             additional cash that can be used for any purpose.

Category (AF)                A collective title or main heading for real property facilities with similar functions. Categories simplify referencing and

Category Code (AF)           The six-digit code identifying the function of the real property facility.

Caveat Emptor                A Latin phrase meaning “let the buyer beware”

Certificate Of
Deposit (CD)                 A specific sum of money deposited into a savings institution for a specified time period, and bearing a higher rate of
                             interest than a passbook account if left to maturity. Does not have withdrawal privileges as does a passbook
                             account. Also called a time certificate of deposit. (T.C.D.) A document written by a bank or other financial institution
                             that is evidence of a deposit, with the issuer’s promise to return the deposit plus earnings at a specified interest rate
                             within a specified time period. See adjustable rate mortgage (ARM).

Certificate of
Deposit Index                An index that is used to determine interest rate changes for certain adjustable-rate mortgage (ARM) plans. It
                             represents the weekly average of secondary market interest rates on six-month negotiable certificates of deposit.
                             See adjustable-rate mortgage.

Certificate of Eligibility   A document issued by the federal government certifying a veteran’s eligibility for a Department of Veterans Affairs
                             (VA) mortgage.

Certificate of Reasonable
Value (CRV)                  A document issued by the Department of Veterans Affairs (VA) that establishes the maximum value and loan
                             amount for a VA mortgage.

Certificate Of Reasonable
Value (CRV)                  A form indicating the appraised value of a property being financed with a VA loan
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Certificate Of Sale        The document generally given to the purchaser at a tax foreclosure sale. A certificate of sale does not convey title;
                           normally it is an instrument certifying that the holder received title to the property after the redemption period passed
                           and that the holder paid the property taxes for that interim period.

Certificate of Title       A statement provided by an abstract company, title company, or attorney stating that the title to real estate is legally
                           held by the current owner. A statement of opinion on the status of the title to a parcel or real property based on an
                           examination of specified public records.

Certified Check            A personal check drawn by an individual which is certified (guaranteed) to be good. The bank holds the funds to pay
                           the certified check and will not pay any other checks drawn on the account if such payment would impede payment
                           of the certified check. The bank also will not honor a stop payment of a certified check.

Cession                    Ceding or yielding by a state of its legislative jurisdiction over government-controlled real property to the federal

Chain                      Unit of length usually understood to be Gunter’s chain, but possibly variant by locale. Chains equal to 2 poles (one
                           half the standard length) are found in Virginia. The name comes from the heavy metal chain of 100 links that was
                           used by surveyors to measure property bounds.

Chain Carrier              An assistant to the surveyor, the chain carriers moved the surveying chain from one location to another under the
                           direction of the surveyor. This was a position of some responsibility, and the chain carriers took an oath as “sworn
                           chain carriers” that they would do their job properly.

Chain Of Title             The history of all of the documents that transfer title to a parcel of real property, starting with the earliest existing
                           document and ending with the most recent.

Change                     The appraisal principal that holds that no physical or economic condition remains constant.

Change Frequency           The frequency (in months) of payment and/or interest rate changes in an adjustable-rate mortgage (ARM).

Chattel                    A tangible, movable article of personal property, as opposed to real property. Another name for personal property.

Civil Rights Act Of 1866   An act that prohibits racial discrimination in the sale and rental of housing.

Claim                      See Entry.

Clear Title                A title that is free of liens or legal questions as to ownership of the property.

Clearance - Deep
Clearance                  A range clearance that is usually required only at “point” locations (for example, where deep underground utilities or
                           the foundations of a large building are to be placed). The area is cleared by use of mine detectors in 5-foot layers to
                           the necessary depth.

Clearance - Moderate-
Depth Clearance            A range clearance, following surface and shallow clearance, to a depth of 5 feet, using a detector system more
                           sensitive than the service mine detector. All items located are dug up and disposed of properly. Moderate depth
                           clearance is required when an area is to undergo development

Clearance - Shallow
Clearance                  A range clearance operation where the area is systematically swept with standard service mine detectors. Ferrous
                           cased duds on the surface and down to a depth of 20-24 inches should be located, removed, and disposed of
                           properly. The use of shallow-cleared areas is restricted to activities causing only shallow surface disturbance, such
                           as agriculture.

Clearance - Surface
Clearance                  A range clearance operation where the surface area is searched visually and dud and other munitions
                           contamination are removed and disposed of properly. Surface-cleared ranges are restricted to activities that require
                           no ground breaking and limited access.

Close                      In BRAC, all missions of the base will cease or be relocated. All personnel (military, civilian, and contractor) will
                           either be eliminated or relocated. The entire base will be excessed and the property disposed of.

Close, Except              In BRAC, the vast majority of the missions will cease or be relocated. Over 95 percent of the military, civilian, and
                           contractor personnel will either be eliminated or relocated. All but a small portion of a base will be excessed and the
                           property disposed of. The small portion retained will often be facilities in an enclave for use by the Reserve
                           Component. Generally, Active Component management of the base will cease. Outlying, unmanned ranges or
                           training areas retained for Reserve Component use do not count against the “small portion retained”.

Closing                    A meeting at which a sale of a property is finalized by the buyer signing the mortgage documents and paying
                           closing costs. Also called “settlement.” At this meeting, ownership of the property is transferred from the seller to the

Closing Cost Item          A fee or amount that a home buyer must pay at closing for a single service, tax, or product. Closing costs are made
                           up of individual closing cost items such as origination fees and attorney’s fees. Many closing cost items are included
                           as numbered items on the HUD-1 statement.
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Closing Costs               Expenses incidental to a sale of real estate, such as loan fees, title fees, appraisal fees, etc. Expenses (over and
                            above the price of the property) incurred by buyers and sellers in transferring ownership of a property. Closing costs
                            normally include an origination fee, an attorney’s fee, taxes, an amount placed in escrow, and charges for obtaining
                            title insurance and a survey. Closing costs percentage will vary according to the area of the country; lenders or
                            Realtors® often provide estimates of closing costs to prospective homebuyers.

Closing Statement           The statement which lists the financial settlement between the buyer and the seller, and also the costs each must
                            pay. A separate statement for buyer and seller is sometimes prepared. See HUD-1 statement.

Cloud On Title              Any document, claim, unreleased lien or encumbrance that may impair the title to real property or make the title
                            doubtful; usually revealed by a title search and removed by either quitclaim deed or suit to quiet title. Any conditions
                            revealed by a title search that adversely affect the title to real estate. Usually clouds on title cannot be removed
                            except by a quitclaim deed, release, or court action.

Code Of Ethics              A written system of standards for ethical conduct.

Codicil                     A supplement or an addition to a will, executed with the same formalities as a will, that normally does no revoke the
                            entire will.

Coinsurance                 A sharing of insurance risk between the insurer and the insured. Coinsurance depends on the relationship between
                            the amount of the policy and a specified percentage of the actual value of the property insured at the time of the

Coinsurance Clause          A clause in insurance policies covering real property that requires the policy-holder to maintain fire insurance
                            coverage generally equal to at least 80% of the property’s actual replacement cost. A provision in a hazard
                            insurance policy that states the amount of coverage that must be maintained — as a percentage of the total value
                            of the property — for the insured to collect the full amount of a loss.

Collateral                  Property put up by someone getting a loan. If they fail to repay the loan, the property goes to the person granting
                            the loan. An asset (such as a car or a home) that guarantees the repayment of a loan. The borrower risks losing the
                            asset if the loan is not repaid according to the terms of the loan contract.

Collateral Equipment (AF)   For accounting purposes, equipment attached to a building or utility that helps the facility operate. Bases identify
                            these items in the base equipment management office (BEMO) property account and the equipment authorization
                            inventory data (EAID)

Collateral Security         Most commonly used to mean some security in addition to the personal obligation of the borrower.

Collection                  The efforts used to bring a delinquent mortgage current and to file the necessary notices to proceed with
                            foreclosure when necessary.

Color Of Title              A deed appearing to convey title but in fact not conveying title, either because the grantor did not have title to
                            convey or because the conveyance was flawed in some way.

Colpa                       Old Irish measure of land equal to that which can support a horse or cow for a year. Approximately an Irish acre of
                            good land.

Co-Maker                    A person who signs a promissory note along with the borrower. A co-maker’s signature guarantees that the loan will
                            be repaid, because the borrower and the co-maker are equally responsible for the repayment. See endorser.

Commingling                 The illegal act by a real estate broker of placing client or customer funds with personal funds. By law brokers are
                            required to maintain a separate trust of escrow account for the other parties’ funds held temporarily by the broker.

Commission                  The fee charged by a broker or agent for negotiating a real estate or loan transaction. A commission is generally a
                            percentage of the price of the property or loan. Payment to a broker for services rendered, such as in the sale or
                            purchase of real property; usually a percentage of the selling price of the property.

Commitment Letter           A formal offer by a lender stating the terms under which it agrees to lend money to a home buyer. Also known as a
                            “loan commitment.”

Common Area
Assessments                 Levies against individual unit owners in a condominium or planned unit development (PUD) project for additional
                            capital to defray homeowners’ association costs and expenses and to repair, replace, maintain, improve, or operate
                            the common areas of the project.

Common Areas                Those portions of a building, land, and amenities owned (or managed) by a planned unit development (PUD) or
                            condominium project’s homeowners’ association (or a cooperative project’s cooperative corporation) that are used
                            by all of the unit owners, who share in the common expenses of their operation and maintenance. Common areas
                            include swimming pools, tennis courts, and other recreational facilities, as well as common corridors of buildings,
                            parking areas, means of ingress and egress, etc.

Common Elements             Parts of a property that are necessary or convenient to the existence, maintenance and safety of a condominium or
                            are normally in common use by all of the condominium residents. Each condominium owner has an undivided
                            ownership interest in the common elements.
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Common Law                The body of law based on custom usage and court decisions. An unwritten body of law based on general custom in
                          England and used to an extent in the United States.

Community Land Trust
Mortgage Option           An alternative financing option that enables low- and moderate-income home buyers to purchase housing that has
                          been improved by a nonprofit Community Land Trust and to lease the land on which the property stands.

Community Property        A system of property ownership based on the theory that each spouse has an equal interest in the property
                          acquired by the efforts of either spouse during marriage. A holdover of Spanish law found predominantly in western
                          states; the system was unknown and infer English common law. In some western and southwestern states, a form
                          of ownership under which property acquired during a marriage is presumed to be owned jointly unless acquired as
                          separate property of either spouse.

Community Seconds®        An alternative financing option for low- and moderate-income households under which an investor purchases a first
                          mortgage that has a subsidized second mortgage behind it. The second mortgage may be issued by a state,
                          county, or local housing agency, foundation, or nonprofit organization. Payment on the second mortgage is often
                          deferred and carries a very low interest rate (or no interest rate at all). Part of the debt may be forgiven
                          incrementally for each year the buyer remains in the home.

Comparables               An abbreviation for “comparable properties”; used for comparative purposes in the appraisal process. Comparables
                          are properties like the property under consideration; they have reasonably the same size, location, and amenities
                          and have recently been sold. Comparables help the appraiser determine the approximate fair market value of the
                          subject property. Properties used in an appraisal report that are substantially equivalent to the subject property.

Competition               The appraisal principle that states that excess profits generate completion.

Competitive Market
Analysis (CMA)            A comparison of the prices of recently sold homes that are similar to a listing seller’s home in terms of location, style
                          and amenities.

Compound Interest         Interest paid on the accumulated interest as well as the principal. Interest paid on the original principal balance and
                          on the accrued and unpaid interest.

Environmental Response,
Compensation and
Liability Act (CERCLA)    A federal law administered by the environmental protection agency that establishes a process for identifying parties
                          responsible for creating hazardous waste sites, forcing liable parties to clean up toxic sites, bringing legal action
                          against responsible parties and funding the abatement of toxic sites—See Superfund.

Comprehensive Plan        See Master Plan

Computerized Loan
(CLO) System              An electronic network for handling loan applications through remote computer terminals linked to various lenders’

Condemn                   The taking of privately owned land for public use by eminent domain. In the U.S. just compensation must be
                          provided for any lands thus taken.

Condemnation              Acquisition of real estate through conversion to public use under the right of eminent domain, The acquisition of real
                          estate not being offered for sale that is necessary for government operations by its superior (“eminent”) authority
                          over the land (“domain”). Condemnation results in passage of title and land to the government with or without the
                          consent of the landowner, but with just compensation paid to the landowner. The purchase price is determined
                          during the condemnation proceedings. The determination that a building is not fit for use or is dangerous and must
                          be destroyed; the taking of private property for a public purpose through an exercise of the right of eminent domain.

Condemnation (AF)         A judicial proceeding that the Government implements so it can exercise its right of eminent domain over real

Condition (AF)            The physical ability of a facility to house an organization or function. See Conditional line.

Conditional line          An agreed line between neighbors that has not been surveyed, or which has been surveyed but not granted.

Conditional-Use Permit    Written governmental permission allowing a use inconsistent with zoning but necessary for the common good, such
                          as locating an emergency medical facility in a predominantly residential area.

Condominium               The absolute ownership of a unit in a multiunit building based on legal description of the airspace the unit actually
                          occupies, plus an undivided interest in the ownership of the common elements, which are owned jointly with the
                          other condominiums unit owners. A real estate project in which each unit owner has title to a unit in a building, an
                          undivided interest in the common areas of the project, and sometimes the exclusive use of certain limited common

Conversion                Changing the ownership of an existing building (usually a rental project) to the condominium form of ownership.
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Condominium Hotel        A condominium project that has rental or registration desks, short-term occupancy, food and telephone services,
                         and daily cleaning services and that is operated as a commercial hotel even though the units are individually

Confession of
Judgment Clause          Permits judgment to be entered against a debtor without the creditor’s having to institute legal proceedings.

Conformity               The appraisal principle that holds that greater the similarity among properties in an area, the better they will hold
                         their value.

Consent                  A grant of permission over lessor interest lands.

Consideration            Compensation or an equivalent (such as money, material, or services) that is given for something acquired or
                         promised. This may be the appraised fair market value of the real property; or may include protection of the real
                         property against loss by fire, water, or other causes; or any mutually agreeable arrangement that does not conflict
                         with governing statutory limitations. Where the government has a lessor interest, normally the government will
                         consent to the granting of an easement by the owner of the underlying fee, subject to whatever conditions are
                         required to protect the government’s interest; consideration is not required. The money (or other property) used to
                         purchase land.

Construction (AF)        Erecting, installing, or assembling a new facility. Adding to, altering, expanding, converting, or replacing an existing
                         facility. Moving a facility from one installation to another. Construction includes: Equipment that personnel install on
                         the facility. Site preparation, excavation, filling, landscaping, or other improvements that personnel make to the land.

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. A short-term, interim loan for financing the cost of construction. The
                         lender makes payments to the builder at periodic intervals as the work progresses.

Constructive Eviction    Actions of a landlord that so materially disturb or impair tenant’s enjoyment of the leased premises that the tenant is
                         effectively forced to move out and terminate the lease without liability for any further rent.

Constructive Notice      Notice given to the world by recorded documents. All people are charged with knowledge of such documents,
                         whether or not they have actually examined them. Possession of property is also considered constructive notice to
                         the person in possession has an interest in the property.

Consumer Lending         Loans made for personal property, such as automobiles, appliances, etc.

Contaminated Area        An area where there are known or suspected unexploded munitions, regardless of type.

Contamination            The presence of conventional unexploded ordnance. Also, the presence of biological, radioactive, toxicchemical, or
                         hazardous substances (as defined in CERCLA) at levels that may present a public hazard or exceed applicable
                         regulatory standards.

Contingency              A provision in a contact that required a certain act to be done or a certain event to occur before the contract
                         becomes binding. A condition that must be met before a contract is legally binding. For example, home purchasers
                         often include a contingency that specifies that the contract is not binding until the purchaser obtains a satisfactory
                         home inspection report from a qualified home inspector.

Contingent Beneficiary   One who, under the terms of a will or trust, may or may not share in the estate upon the happening of an uncertain
                         event. Example: A leaves property to B when B reaches 30, stipulating that if B dies before 30, property goes to C.
                         C is the contingent beneficiary.

Contract                 A legally enforceable promise or set of promises that must be preformed and for which, if a breach of the promise
                         occurs, the law provides a remedy. A contract may be either unilateral, by which only one party is bound to act, or
                         bilateral, by which all parties to the instrument are legally bound to act as prescribed. An agreement between two or
                         more persons or entities which creates or modifies a legal relationship. Generally based upon offer and acceptance.
                         An oral or written agreement to do or not to do a certain thing.

Contribution             The appraisal principle that states that the value of any component of a property is what it gives to the value of the
                         whole or what its absence detracts from that value.

Conventional Loan        A loan that requires no insurance or guarantee

Conventional Mortgage    A mortgage or deed of trust not obtained under a government insured program, (such as F.H.A. or V.A.). A mortgage
                         that is not insured or guaranteed by the federal government. Contrast with government mortgage.

Conversion               A permanent change in the functional use of all or part of a building.

Convertibility Clause    A provision in some adjustable-rate mortgages (ARMs) that allows the borrower to change the ARM to a fixed-rate
                         mortgage at specified timeframes after loan origination.

Convertible ARM          An adjustable-rate mortgage (ARM) that can be converted to a fixed-rate mortgage under specified conditions.

Conveyance               A term used to refer to any document that transfers title to real property. The term is also used in describing the act
                         of transferring.
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Cooperating Broker         See listing broker

Cooperative                A residential multiunit building whose title is held by a trust or a corporation that is owned by and operated for the
                           benefit of persons living within the building, who are the beneficial owners of the trust or stockholders of the
                           corporation, each possessing a proprietary lease. A type of multiple ownership in which the residents of a multiunit
                           housing complex own shares in the cooperative corporation that owns the property, giving each resident the right to
                           occupy a specific apartment or unit.

Cooperative Corporation    A business trust entity that holds title to a cooperative project and grants occupancy rights to particular apartments
                           or units to shareholders through proprietary leases or similar arrangements.

Cooperative Mortgages      Mortgages related to a cooperative project. This usually refers to the multifamily mortgage covering the entire
                           project but occasionally describes the share loans on the individual units.

Cooperative Project        A residential or mixed-use building wherein a corporation or trust holds title to the property and sells shares of stock
                           representing the value of a single apartment unit to individuals who, in turn, receive a proprietary lease as evidence
                           of title.

Co-Ownership               Title ownership held by two or more persons.

Copyhold                   A tenancy at will that was recorded in a manorial court ownership roll. The lord of the manor maintained the list.
                           Copyholds were not, strictly speaking, inheritable, but were customarily so. The land reverted to the landowner who
                           would then “admit” the heir to the lands of the decedent.

Corner                     The beginning or end point of any survey line. The term corner does not imply the property was in any way square.

Corporate Relocation       Arrangements under which an employer moves an employee to another area as part of the employer’s normal
                           course of business or under which it transfers a substantial part or all of its operations and employees to another
                           area because it is relocating its headquarters or expanding its office capacity.

Corporation                An entity or organization, created by operation of law, whose rights of doing business are essentially the same as
                           those of an individual. The entity has continuous existence until it is dissolved according to legal procedures.

Correction Lines           Provisions in the rectangular survey (government survey) system made to compensate for the curvature of the
                           earth’s surface. Every fourth township line (at 24-mile intervals) is used as a correction line on which the intervals
                           between the north and south range lines are re-measured and corrected to a full six miles.

Cost Approach              The process of estimating the value of a property by adding the estimated land value the appraiser’s estimate of the
                           reproduction or replacement cost of the building, less depreciation.

Cost Of Funds
Index (COFI)               An index that is used to determine interest rate changes for certain adjustable-rate mortgage (ARM) plans. It
                           represents the weighted-average cost of savings, borrowings, and advances of the 11th District members of the
                           Federal Home Loan Bank of San Francisco. See adjustable-rate mortgage (ARM).

Cost Recovery              An Internal Revenue Service for depreciation

Council On Environmental
Quality (CEQ)              Established by the National Environmental Policy Act (NEPA), the CEQ consists of three members appointed by the
                           President CEQ regulations (40 CFR Parts 1500-1508, as of July 1, 1986) describe the process for implementing
                           NEPA, including preparation of Environmental Assessments an Environmental Impact Statements, and timing and
                           extent of public participation.

Counteroffer               A new offer made in response to an offer received. It has the effect of rejecting the original offer, which can not be
                           accepted thereafter unless revived by the offeror.

Covenant                   A clause in a mortgage that obligates or restricts the borrower and that, if violated, can result in foreclosure.

Covenant Of Quiet
Enjoyment                  The covenant implied by law by which a landlord guarantees that a tenant may take possession of leased premises
                           and that the landlord will not interfere in the tenant’s possession or use of the property.

credit                     An agreement in which a borrower receives something of value in exchange for a promise to repay the lender at a
                           later date.

Credit                     On a closing statement, an amount entered in a person’s favor-either an amount the party has paid or an amount
                           for which the party must reimburse.

Credit History             A record of an individual’s open and fully repaid debts. A credit history helps a lender to determine whether a
                           potential borrower has a history of repaying debts in a timely manner.

Credit Life Insurance      A type of insurance often bought by mortgagors because it will pay off the mortgage debt if the mortgagor dies while
                           the policy is in force.

Credit Report              A report of an individual’s credit history prepared by a credit bureau and used by a lender in determining a loan
                           applicant’s creditworthiness.
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Credit Report             A report on the past ability of a loan applicant to pay installment payments. Several national and local companies
                          make such reports.

Credit Reporting Agency
(or bureau)               An organization that prepares reports that are used by lenders to determine a potential borrower’s credit history.
                          The agency obtains data for these reports from a credit repository as well as from other sources.

Credit Repository         An organization that gathers, records, updates, and stores financial and public records information about the
                          payment records of individuals who are being considered for credit.

Creditor                  A person to whom money is owed.

Creek                     Small stream.

Cultural History          The archeological sequence of cultural activity through time, within a defined geographic space or relating to a
                          particular group.

Cultural Resource         Prehistoric or historic district sites, buildings, objects, or any other physical evidence of human activity considered
                          important to a culture, subculture, or community for a scientific, traditional, religious, or other reason.

Cumulative Effects        In NEPA, impacts on the environment that result from the incremental impact of the action when added to other
                          past, present, and reasonably foreseeable future actions regardless of what agency (federal or nonfederal) or
                          person undertakes such other actions.

Current Assets            An accounting term meaning cash or those things which can be readily converted to cash, such as short term
                          accounts receivable.

Current Liabilities       Short term debts

Curtesy                   A life estate, usually a fractional interest, given by some states to the surviving husband in real estate owned by his
                          deceased wife. Most states have abolished this curtsey.

Customary Estate          See Copyhold
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TERM                                                         DEFINITION
Datum                    A horizontal plane from which heights and depths are measured.

Debit                    On a closing statement, an amount charged; that is, an amount that they debited party must pay.

Debt                     An amount owed to another. See installment loan and revolving liability.

Decedent                 One who has died.

Declaration Of Taking    The document filed by the US Attorney with a court of competent jurisdiction to obtain specified rights, title, or
                         interest in property. Upon filing of the Declaration of Taking and making a deposit of money (appraised value of the
                         property) with the court, title vests in the federal government.

Dedication               The voluntary transfer of private property by its owner to the public for some public use, such as for streets or

Deed                     The legal document conveying title to a property. A document giving the holder the title to property. More generally,
                         any document sealing an agreement, contract, etc. The most common types of deeds Bargain and Sale, Quitclaim,
                         and Warranty. A written instrument that, when executed and delivered, conveys title to or an interest in real estate.

Deed In Lieu
Of Foreclosure           A deed given by the mortgagor to the mortgagee when the mortgagor is in default under the term of the mortgage.
                         This is a way for the mortgagor to avoid foreclosure.

Deed In Trust            An instrument that grants trustee under a land trust full power to sell, mortgage and subdivide a parcel of real
                         estate. The beneficiary controls the trustee’s use of these powers under the provisions of the trust agreement. A
                         transfer of property to someone to be held in trust for another. See trust. More specifically, however, deeds of trust
                         are used in a number of states instead of a mortgage to secure a loan. The deed of trust names the trustees in
                         whom title is placed as security against failure to meet the terms of the loan.

Deed Of Restrictions     Clause in a deed limiting the future uses of the property. Deed restrictions may impose a vast variety of limitations
                         and conditions-for example, they may limit the density of buildings, dictate the types of structure from being used in
                         specific purposes or even from being used at all.

Deed of Trust            The document used in some states instead of a mortgage; title is conveyed to a trustee.

Deed Of Trust Lien       See Trust Deed Lien

Deed Poll                A deed not indented, that is, a deed made by one party only. See indenture.

Deed-in-Lieu             A deed given by a mortgagor to the mortgagee to satisfy a debt and avoid foreclosure. Also called a “voluntary

Default                  Failure to make mortgage payments on a timely basis or to comply with other requirements of a mortgage. The
                         nonperformance of a duty, whether arising under a contract or other wise; failure to meet an obligation when due.

Defeasance Clause        A clause used in leases and mortgages that cancels a specific right upon the occurrences of a certain condition,
                         such as cancellation of a mortgage upon repayment of a mortgage loan.

Defensible Fee Estate    An estate in which the holder has a fee simple title that may be divested upon the occurrence or nonoccurrence of a
                         specified event. There are two categories of defeasible fee estates: fee simple on condition precedent (fee simple
                         determinable) and fee simple on condition subsequent.

Deficiency Judgment      A personal judgment levied against the borrower when a foreclosure sale does not produce sufficient funds to pay
                         the mortgage debt in full.

Delinquency              Failure to make mortgage payments when mortgage payments are due.

Demand                   The amount of goods people are willing and able to buy at a given price; often coupled with supply.

Demise                   Generally a synonym for ‘lease’, both noun and verb.

Density Zoning           Zoning ordinances that restricted the maximum average number of houses per acre that may be built within a
                         particular area, generally a subdivision

Department of Veterans
Affairs (VA)             An agency of the federal government that guarantees residential mortgages made to eligible veterans of the military
                         services. The guarantee protects the lender against loss and thus encourages lenders to make mortgages to

Deposit                  A sum of money given to bind the sale of real estate, or a sum of money given to ensure payment or an advance of
                         funds in the processing of a loan. See earnest money deposit.
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Depreciation                 (1) In appraisal, a loss of value in property due to physical deterioration, functional obsolescence and external
                             obsolescence. (2) In real estate investment, and expense deduction for tax purposes taken over the period of
                             ownership of income property. A decline in the value of property; the opposite of appreciation.

Descent                      Acquisition of and estate by inheritance in which an heir succeeds to the property by operation of law.

Designate Agent              A license authorized by a broker to act as the agent for specific principal in a particular transaction.

Designation (AF)             An installation’s official name, which appears in a special order.

Detached Installation (AF)   A non self-supporting installation used for administrative, operational, or training missions not in support of any
                             particular primary, auxiliary, or off base installation.

Detached Leased
Installation (AF)            A non self-supporting installation with a leasehold interest in the entire installation, used for administrative,
                             operational, or training missions not in support of any particular primary, auxiliary, or offbase installation.

of Availability              A written report stipulating that a certain kind or type of real estate that is not currently being utilized, but is not
                             excess to the needs of the controlling command or agency, is available for temporary use.

Developed                    Descriptive term applied to land, a lot, a parcel, or an area that has been built upon, or where public services have
                             been installed prior to residential or commercial construction.

Developer                    One who attempts to put land to its most profitable use through the construction of improvements.

Devise                       A gift of real property made in a will.

Discount Points              See point.

Disposal                     Any authorized method of permanently divesting the accountable agency from control and responsibility for real
                             property or an interest therein

District Engineer            A field representative of the Chief of Engineers, Department of the Army, authorized to take certain actions involving
                             real property under the jurisdiction of the Secretary of the Army.

Diversion                    A temporary change in the functional use of all or part of a building, involving no major structural changes or

Dominant Estate              The land that is served or benefited by the existence of an easement on some other land.

Dominant Tenement            A property that includes in its ownership the appurtenant right to use an easement over another person’s property
                             for a specific purpose.

Donation                     Acquisition of real estate through free gift to the government.

Double Nickel                Slang for .55, as in 6

Dower                        The rights of a widow in the property of her husband at his death.

Dower                        The legal right or interest, recognized in some states, that a wife acquires in the property her husband held or
                             acquired during their marriage. During the husband’s lifetime the right is only a possibility of an interest; upon his
                             death it an become an interest of land. A wife’s interest in her husband’s property, inheritable at his death. English
                             probate law set this at 1/3. “Her thirds” was a phrase used for this. In the U.S. it was common for a woman to
                             formally relinquish her dower claim on land sold by the husband. This further guaranteed that the property was clear
                             of all obligations. In some areas the lack of a dower relinquishment at the time of sale was proof that the man was
                             single or widowed. See also jointure.

Down Payment                 The part of the purchase price of a property that the buyer pays in cash and does not finance with a mortgage.
                             Cash portion paid by a buyer from his own funds as opposed to that portion of the purchase price which is financed.

Drain                        Small dry stream or gully.

Dual Agency                  Representing both parties to a transaction. This is unethical unless both parties agree to it and it is illegal in many

Due-On -Sale Clause          A provision in the mortgage that estates that the entire balance of the note is immediately due and payable if the
                             mortgagor transfers (sells) the property.

Due-On-Sale Provision        A provision in a mortgage that allows the lender to demand repayment in full if the borrower sells the property that
                             serves as security for the mortgage.

Due-On-Transfer Provision    This terminology is usually used for second mortgages. See due-on-sale provision.

Duress                       Unlawful constraint or action exercised upon a person whereby the person is forced to perform an act against his or
                             her will. A contract entered into under duress is void able.
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TERM                                                           DEFINITION
Early Withdrawal Penalty   A charge assessed against holders of fixed interest rate accounts.

Earnest Money              Money deposited by a buyer under the terms of a contract, to be forfeited if the buyers defaults but applied to the
                           purchase price if the sale is closed.

Earnest Money Deposit      A deposit made by the potential home buyer to show that he or she is serious about buying the house.

Easement                   An agreement that grants use of real property for specified purposes for a specific term or in perpetuity. The
                           purposes and conditions upon which the Army may grant easements affecting its property generally are limited by
                           law. These limitations, plus the fact that the grantor is not excluded from such use of the real property involved as
                           will not interfere with the grantee’s use, normally distinguishes an easement from a lease. Use of a portion of
                           property for some stated purpose without remuneration. Easements are not estates in that they do not convey
                           ownership, but rather the use of the property in so far as needed for the stated purpose. An example is the
                           easement a city may have to dig up part of your land to repair the water main. A right of way giving persons other
                           than the owner access to or over a property.

Easement Appurtenant       The right of an owner of real estate to use part of another’s land.

Easement By
Condemnation               An easement created by the government or government agency that has exercised its right under eminent domain.

Easement By Necessity      An easement allowed by law as necessary for the full enjoyment of a parcel of real estate; for example, a right of
                           ingress and egress over a grantor’s land.

Easement By Prescription   An easement acquired by continuous, open and hostile use of the property for the period of time prescribed by state

Easement In Gross          The right of a person, whether or not an owner of real estate, to use part of another person’s land. An easement
                           that is not created for the benefit of the any land owned by the owner of the easement but that attaches personally
                           to the easement owner. For example; a right granted by Eleanor Franks to Joe Fish to use a portion of her property
                           for the rest of his life would be an easement in gross.

Economic Life              The number of years during which an improvement will add value to the land.

EDM                        Electronic Distance Measurement device, the instrument used by modern surveyors that replaces the use of
                           measurement chains. It determines distance by measuring the time it takes for light to reflect off a prism on top of a

Effective Age              An appraiser’s estimate of the physical condition of a building. The actual age of a building may be shorter or longer
                           than its effective age.

Effective Gross Income     Normal annual income including overtime that is regular or guaranteed. The income may be from more than one
                           source. Salary is generally the principal source, but other income may qualify if it is significant and stable.

Emblements                 Growing crops, such as grapes and corn, that are produced annually through labor and industry; also called fructus

Eminent Domain             The right of a government or municipal quasi-public body to acquire property for public use through a court action
                           called condemnation, in which the court decides that the use is public use and determines the compensation to be
                           paid to the owner. The right of a government to take private property for public use upon payment of its fair market
                           value. Eminent domain is the basis for condemnation proceedings.

Employee                   Someone who works as a direct employee of an employer and has an employee status. The employer is obligated
                           to withhold income taxes and social security taxes from the compensation of employees. Alsosee independent

Housing                    A special housing initiative that offers several different ways for employers to work with local lenders to develop
                           plans to assist their employees in purchasing homes.

Employment Contract        A document evidencing formal employment between and employer and employee or between principal and agent.
                           In the real estate business this generally takes the form of a listing agreement or management agreement.

Enabling Acts              State legislation that confers zoning powers on municipal governments

Encapsulation              A method of controlling environmental contamination by sealing off dangerous substances.

Enclave                    In BRAC, a section of a military installation that remains intact from that part which is closed or realigned and which
                           will continue with its current role and functions subject to specific modifications.

Encroachment               A building or some portion of it- a wall or fence for instance-that extends beyond the land of the owner and illegally
                           intrudes on some land of an adjoining owner or a street or alley. An unauthorized invasion of a fixture, building, or
                           other improvement onto another person’s property. An improvement that intrudes illegally on another’s property.
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Encumbrance                A burden on a property, generally one that affects the ability to transfer title, or one which affects the condition of the
                           property. Examples are liens, mortgages, taxes, easements, water rights, etc. Anything that affects or limits the fee
                           simple title to a property, such as mortgages, leases, easements, or restrictions.

Endangered Species         A species that is threatened with extinction throughout all or a significant portion of its range.

Endorse                    Transfer ownership of an asset by signing the back of a negotiable instrument. One can endorse a check to receive
                           payment or endorse a stock or bond certificate to transfer ownership.

Endorser                   A person who signs ownership interest over to another party. Contrast with co-maker.

Enfeoff                    To invest with an estate held in fee.

Enfeoffment                Giving ownership in fee. A deed or legal document giving ownership in fee.

Engineer’s Chain           A 100 foot chain containing 100 links of one foot apiece.

Entail                     To create a fee tail, or to create one from fee simple.

Entry                      Filing of the intention to get a land grant or patent. This was the first step of a multi-step process of getting land, the
                           other steps generally being Survey, and Grant.

Environmental Impact
Statement (EIS)            A document required of federal agencies by NEPA for major projects or legislative proposals significantly affecting
                           the environment. A tool for decision making, the EIS describes the positive and negative effects of the undertaking
                           and lists alternative actions.

Equal Credit Opportunity
Act (ECOA)                 A federal law that requires lenders and other creditors to make credit equally available without discrimination based
                           on race, color, religion, national origin, age, sex, marital status, or receipt of income from public assistance
                           programs. The federal law that prohibits discrimination in the extension of credit because of race, color, religion,
                           national origin, sex, age or marital status.

Equalization               The raising or lowering of assessed values for tax purposes in a particular county or taxing district to make them
                           equal to assessments in other counties or districts.

Equalization Factor        A factor (number) by which the assessed value of a property is multiplied to arrive at a value for the property that is
                           in line with statewide tax assessments. The ad valoewm tax would be based on this adjusted value.

Equipment Authorization
Inventory Data
(EAID) (AF)                An item of non-replaceable equipment that the Air Force authorizes.

Equipment-In-Place         A special category of personal property consisting of capital equipment (non-consumable personalproperty that
                           possesses a capital nature and is classified as nonexpendable) and other nonexpendable supplies of a movable
                           nature that are not affixed as an integral part of the facility and may be removed without destroying or reducing the
                           usefulness of the facility (e.g., portable generators, gas cylinders).

Equitable Lien             See Statutory lien

Equitable Right
Of Redemption              The right of a defaulted property owner to recover the property prior to its sale by paying the appropriate fees and

Equitable Title            The interest held by a vendee under a contract for the deed or an installment contract; the equitable right to obtain
                           absolute ownership to property when legal title is held in another’s name.

Equity                     The interest or value that an owner has in property over the above and indebtness. A homeowner’s financial interest
                           in a property. Equity is the difference between the fair market value of the property and the amount still owed on its

Equity Line Of Credit      A combination of a line of credit and equity loan. A maximum loan amount is established based on credit and equity.
                           A mortgage is recorded against the potential borrower’s property for said maximum loan amount. The potential
                           borrower has the right to borrow, as needed, up to the amount of the mortgage.

Equity Loan                A loan based upon the equity in a property. The credit of the borrower is not a major factor.

Erosion                    The gradual wearing away of land by water, wind and generally weather conditions; the diminishing of property by
                           the elements.

Escheat                    Land ownership reverting to the Crown, government, or estate owner because of a lack of heirs. The reversion of
                           property to the state or county, as provided by state law, in cases where a descendant dies intestate without heirs
                           capable of inheriting, or when the property is abandoned.
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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. An item of value, money, or documents deposited with a third party to be
                             delivered upon the fulfillment of a condition. For example, the deposit by a borrower with the lender of funds to pay
                             taxes and insurance premiums when they become due, or the deposit of funds or documents with an attorney or
                             escrow agent to be disbursed upon the closing of a sale of real estate.

Escrow Account               The trust account established by a broker under the provisions of the license law for the purpose of holding funds
                             on behalf of the brokers principal or some other person until the consummation or termination of transaction. The
                             account in which a mortgage servicer holds the borrower’s escrow payments prior to paying property expenses.

Escrow Analysis              The periodic examination of escrow accounts to determine if current monthly deposits will provide sufficient funds to
                             pay taxes, insurance, and other bills when due.

Escrow Collections           Funds collected by the servicer and set aside in an escrow account to pay the borrower’s property taxes, mortgage
                             insurance, and hazard insurance.

Escrow Disbursements         The use of escrow funds to pay real estate taxes, hazard insurance, mortgage insurance, and other property
                             expenses as they become due.

Escrow Or
Impound Account              Account held by a lender for payments of taxes, insurance, or other periodic debts against real property. The
                             mortgagor or trustor pays a portion of, for example, the yearly taxes, with each monthly payment. The lender pays
                             the tax bill from the accumulated funds.

Escrow Payment               The portion of a mortgagor’s monthly payment that is held by the servicer to pay for taxes, hazard insurance,
                             mortgage insurance, lease payments, and other items as they become due. Known as “impounds” or “reserves” in
                             some states.

Esse                         In esse (Latin). In existence. See also Posse.

Estate                       A property right held by someone. There can be many estates held on a single piece of property, for example,
                             relating to specific uses of the property. Mineral rights, water rights, and so on are examples. Estates can be
                             subordinate (lower in rank) to other estates. The ownership interest of an individual in real property. The sum total of
                             all the real property and personal property owned by an individual at time of death.

Estate (Tenancy)
At Sufferance                The tenancy of a lessee who lawfully comes into possession of a landlord’s real estate but who continuesto occupy
                             the premises improperly after his or her lease right have expired.

Estate (Tenancy) At Will     An estate that gives the lessee the right to possession until the estate is terminated by either party; the term of this
                             is indefinite.

Estate (Tenancy) For Years   An interest for a certain, exact period of time in property leased for a specific consideration.

Estate (Tenancy) From
Period To Period             An interest in leased property that continues from period to period-week to week, month to month or year to year.

Estate In Land               The degree, quantity, nature and extent of interest a person has in real property.

Estate Taxes                 Federal taxes on a decedent’s real and personal property.

Estoppel                     Method of creating an agency relationship in which someone states incorrectly that another person relies on that

Estoppel Certificate         A document in which a borrower certifies the amount owed on a mortgage loan and rate of interest.

Ethics                       The system of moral principles and rules that becomes standards for professional conduct.

Eviction                     A legal process to oust a person from possession of real estate. The lawful expulsion of an occupant from real

Evidence Of Title            Proof of ownership of property; commonly a certificate of title, an abstract of title with lawyer’s opinion, title
                             insurance or a Torrens registration certificate.

Examination Of Title         The report on the title of a property from the public records or an abstract of the title.

Excess Real Estate           Any real property that is no longer required by a controlling command or agency to perform its assigned mission.

Excessing (Noun)             The process of determining that real estate is not needed by the Army.

Excessing (Verb)             Reporting excess property to the disposal agency for disposal.

Exchange                     Acquisition of real estate through transfer of equally valued property. A transaction in which all or part of the
                             consideration is the transfer of like-kind property (such as real estate for real estate)
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Exclusive Listing          A written contract that gives a licensed real estate agent the exclusive right to sell a property for a specified time,
                           but reserving the owner’s right to sell the property alone without the payment of a commission.

Exclusive-Agency Listing   A listing contract under which the owner appoints a real estate broker as his or her exclusive agent for adesignated
                           period of time to see the property, on the owner’s stated term, for commission. The owner reserves the right to sell
                           with out paying anyone a commission is he or she sells to a prospect who has not been introduced or claimed by
                           the broker.

Listing                    A losing contract under which the owner appoints a real estate broker as his or her exclusive agent for a designated
                           period of time, to sell the property on the owner’s stated terms, and agrees to pay the broker commission when the
                           property is sold, whether by the broker, the owner or another broker.

Executed Contract          A contract in which all parties have fulfilled their promises and this performed the contract.

Execution                  The signing and delivery of an instrument. Also, a legal or directing an official to enforce a judgment against the
                           property of a debtor.

Executor/Executrix         The person named in a will to carry out the terms of the will. See administrator. A person named in a will to
                           administer an estate. The court will appoint an administrator if no executor is named. “Executrix” is the feminine

Executory Contract         A contract under which something remains to be done by one or more of the parties.

Express Agreement          An oral or written contract in which the parties states the contract in which the parties state the contract’s terms and
                           express their intentions in words.

External Depreciation      Reduction in property’s value caused by outside factors ( those that are off the property)
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TERM                                                              DEFINITION
Facilitator                 See Non-agent

Facilities                  Any interest in land and structure or complex of structures together with any supporting road and utility
                            improvements necessary to support the functions of an activity or mission

Facility (AF)               A building, structure, or other aspect, including: Utility systems, Pavements. And Land.

Fair Credit Reporting Act   A consumer protection law that regulates the disclosure of consumer credit reports by consumer/credit reporting
                            agencies and establishes procedures for correcting mistakes on one’s credit record.

Fair Housing Act            The federal law that prohibits discrimination in housing based on of race, color, religion, national origin, sex, age or
                            marital status.

Fair Market Value           The highest price estimated in terms of money that a property will bring if exposed for sale in the open market
                            allowing a reasonable time to find a purchaser who buys with knowledge of all the uses to which it is adapted and
                            for which it is capable of being used. It is often referred to as the price at which a willing seller would sell and a
                            willing buyer would buy, neither being under abnormal pressure. The highest price that a buyer, willing but not
                            compelled to buy, would pay, and the lowest a seller, willing but not compelled to sell, would accept.

Family Housing              All federally owned structures, including trailers, that may be used for lodging of an individual on a permanent basis.

Fannie 97                   A financing option for a fixed-rate mortgage that offers home buyers a 3 percent down payment loan with a term
                            between 15 and 30 years. The mortgage features a loan-to-value (LTV) percentage of 97 percent, and is designed
                            to expand homeownership opportunities for people with modest incomes. Borrowers must take a pre-purchase
                            home-buyer education session to qualify for a Fannie 97 mortgage.

Fannie Mae                  A New York Stock Exchange company and the largest non-bank financial services company in the world. It operates
                            pursuant to a federal charter and is the nation’s largest source of financing for home mortgages. A quasi-
                            government agency established to purchase any kind of mortgage loans in the secondary mortgage market from
                            the primary lenders.

Fannie Mae Properties       Fannie Mae owns, manages, and has available for sale, single-family detached homes, two- to four-unit properties,
                            condominiums, and townhouses in a variety of neighborhoods. The number, type, and sales price may vary
                            substantially. The homes vary in age and may require repairs. Fannie Mae homes are sold through local real estate
                            brokers whose contact information is provided in the Fannie Mae Properties for Sale search results on

Fannie Mae’s Community
Home Buyer’s ProgramSM      An income-based community lending model, under which mortgage insurers and Fannie Mae offer flexible
                            underwriting guidelines to increase a low- or moderate-income family’s buying power and to decrease the total
                            amount of cash needed to purchase a home. Borrowers who participate in this model are required to attend pre-
                            purchase home-buyer education sessions.

Federal Deposit Insurance
Corporation (FDIC)          Federal agency established in 1933 that guarantees (within limits) funds on deposit in member banks and thrift
                            institutions and performs other functions such as making loans to or buying assets from member institutions to
                            facilitate mergers or prevent failures. In 1989, Congress passed savings and loan association bailout legislation that
                            reorganized FDIC into two insurance units: the Bank Insurance Fund (BIF) continues the traditional FDIC functions
                            with respect to banking institutions; the Savings Association Insurance Fund (SAIF) insures thrift institution deposits,
                            replacing the Federal Savings and Loan Insurance Corporation (FSLIC), which ceased to exist.

Federal Housing
Administration (FHA)        An agency of the U.S. Department of Housing and Urban Development (HUD). Its main activity is the insuring of
                            residential mortgage loans made by private lenders. The FHA sets standards for construction and underwriting but
                            does not lend money or plan or construct housing. An agency of the federal government that provides credit
                            assistance to farmers and other individuals who live in rural areas

Federal National Mortgage
Association (FNMA)          See Fannie Mae

Federal Property Act        The law that controls management and disposal of most federally controlled real estate.

Federal Reserve System      The country’s central banking system, which is responsible for the nation’s monetary policy by regulating and supply
                            of money and interest rates.

Fee                         Heritable land held in return for service to a lord.

Fee Owned                   Real property for which all rights, title, and interest rather than a partial interest are provided.

Fee Simple                  Ownership of land that can be inherited by any heirs. To hold in fee means to possess. The greatest possible
                            interest a person can have in real estate.

Fee Simple Defeasible       See Defeasible Fee Estate
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Fee Simple Estate          An unconditional, unlimited estate of inheritance that represents the greatest estate and most extensive interest in
                           land that can be enjoyed. It is of perpetual duration. When the real estate is in a condominium project, the unit
                           owner is the exclusive owner only of the air space within his or her portion of the building (the unit) and is an owner
                           in common with respect to the land and other common portions of the property.

Fee Tail                   Ownership of land restricted to a specified class of heirs, generally direct descendants.

Feoff                      See Fee

Feoffee                    One who benefits from a fief.

Feoffment                  Transfer of inheritable real property.

Feud                       See Fee.

Feudal System              A system of ownership usually associated with pre-colonial England, in which the king or other sovereigns the
                           source to all rights. The right to possess real property was granted by the sovereigns to an individual as a life estate
                           only. Upon the death of the individual, title passes back to the sovereigns, not to the decedents heirs. The system of
                           land holding in exchange for service, ultimately to the king. This is opposed to the allodial system.

FHA Coinsured Mortgage     A mortgage (under FHA Section 244) for which the Federal Housing Administration (FHA) and the originating lender
                           share the risk of loss in the event of the mortgagor’s default.

FHA Loan                   A loan insured by the federal housing administration and made by an approved lender in accordance with the FHA’s

FHA Mortgage               A mortgage that is insured by the Federal Housing Administration (FHA). Also known as a government mortgage.

Fiduciary                  One in whom trust and confidence is placed; a reference to a broker employed under the terms of a listing contract
                           or buyer agency agreement.

Fiduciary Relationship     A relationship of trust and confidence, as between trustee and beneficiary, attorney and client orprincipal and agent.

Fief                       See Fee.

Fieri Facias               A common law written to enforce collection of a debt. Typically executed by the sheriff, the property of the debtor is
                           sold to satisfy the claim.

Financial Institutions
Reform, Recovery And
Enforcement Act (FIRREA)   This act restructured the savings and loan association regulatory systems; enacting response to the savings and
                           loan crisis of the 1980’s

Financing Statement        See Uniform Commercial Code

Finder’s Fee               A fee or commission paid to a mortgage broker for finding a mortgage loan for a prospective borrower.

Firm Commitment            A lender’s agreement to make a loan to a specific borrower on a specific property.

First Mortgage             A mortgage having priority over all other voluntary liens against certain property. A mortgage that is the primary lien
                           against a property.

First Station              See Point of Beginning

Fiscal Policy              The government’s policy in regard to taxation and spending programs. The balance between these two areas
                           determines the amount of money the government will withdrawal from or feed into the economy, which can counter
                           economic peaks and slumps.

Fixed Installment          The monthly payment due on a mortgage loan. The fixed installment includes payment of both principal and

Fixed Rate Mortgage        A mortgage having a rate of interest which remains the same for the life of the mortgage. A mortgage in which the
                           interest rate does not change during the entire term of the loan.

Fixture                    Personal property that is so related to real property that a real property interest arises in it (e.g., installed furnace).
                           Does not include building materials. An item of personal property that has been converted to real property by being
                           permanently affixed to the reality. Personal property that becomes real property when attached in a permanent
                           manner to real estate.

Flood Insurance            Insurance that compensates for physical property damage resulting from flooding. It is required for properties
                           located in federally designated flood areas.

Ford                       Shallow part of a stream or river where one could cross.
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Foreclosure               A legal procedure whereby property used as security for a debt is sold to satisfy the debt in the event of a default in
                          payment of the mortgage note or default of other terms in the mortgage document. The foreclosure procedure
                          brings the rights of all parties to a conclusion and passes the title in the mortgaged property to either the holder of
                          the mortgage or a third party who may purchase the realty at the foreclosure sale, free of all encumbrances
                          affecting the property subsequent to the mortgage. The legal process by which a borrower in default under a
                          mortgage is deprived of his or her interest in the mortgaged property. This usually involves a forced sale of the
                          property at public auction with the proceeds of the sale being applied to the mortgage debt.

Forfeiture                The loss of money, property, rights, or privileges due to a breach of legal obligation.

Fork                      Meeting point of two streams. “In the fork of” means between two branches.

Fractional Section        A parcel of land less then 160 acres, usually found at the edge of a rectangular survey.

Fraud                     Deception intended to cause a person to give up property or lawful right.

Freddie Mac               A corporation established to purchase primarily conventional mortgages loans in the secondary mortgages market.

Freehold                  See fee simple

Freehold Estate           An estate in land in which ownership is for an indeterminate length of time, in contrast to a lease estate.

Front Footage             The measurement of parcel of land by the number of feet of street or road frontage.

Fully Amortized ARM       An adjustable-rate mortgage (ARM) with a monthly payment that is sufficient to amortize the remaining balance, at
                          the interest accrual rate, over the amortization term.

Functional Obsolescence   A loss of value to an improvement to real estate arising from functional problems, often caused by age or poor

Furlong                   Unit of length equal to 40 poles (220 yards). Its name derives from “furrow long”, the length of a furrow. See
                          Gunter’s chain.

Future Interest           A person’s present right to an interest in real property that will not result in possession or enjoyment until sometime
                          future, such as a reversion or right to reentry.
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TERM                                                            DEFINITION
Gap                        A defect in the chain of the title of a particular parcel of real estate; a missing document or conveyance that raises
                           doubt as to the present ownership of the land.

General Agent              One whom is authorized by an principal to represent the principal in a specific range matters.

General Lien               The right of a creditor to have all of the debtor’s property-both real and personal-sold to satisfy a debt.

General Partnership        See Partnership

General PP&E               Have an estimated useful life of two years or more; are not intended for sale in the ordinary course of operations;
                           are acquired or constructed with the intention of being used or being available for use by the entity; and have an
                           initial acquisition cost, book value or, when applicable, an estimated fair market value that equals, or exceeds, the
                           DoD capitalization threshold.

General Services
(GSA) Space (AF)           Space in buildings that the GSA owns and leases and assigns to an Air Force organization or other Federal
                           Government agency. This space includes related land use.

General Warranty Deed      A deed which the grantor fully warrants good clear title to the premises. Used in most real estate deed transfers, a
                           general warranty deed offers the greatest protection of any deed.

Ginney                     A wooden dowel 6

Ginnie Mae                 A government agency that plays an important role in the secondary mortgage market. It sells mortgagebacked
                           securities that are backed by pools of FHA and VA loans.

Glass                      The EDM prism.

Gore                       A thin triangular piece of land, the boundaries of which are defined by surveys of adjacent properties. Loosely, an
                           overlap or gap between properties. See also strip.

Government Check           The 24-mile-square parcels composed of 16 townships in the rectangular (government) survey system of legal

Government Lot             Fractional sections in the rectangular (government) survey system that are less than one quarter-section in area

Government Mortgage        A mortgage that is insured by the Federal Housing Administration (FHA) or guaranteed by the Department of
                           Veterans Affairs (VA) or the Rural Housing Service (RHS). Contrast with conventional mortage.

Government National
Mortgage Association
(GNMA)                     A government-owned corporation within the U.S. Department of Housing and Urban Development (HUD). Created
                           by Congress on September 1, 1968, GNMA assumed responsibility for the special assistance loan program formerly
                           administered by Fannie Mae. Popularly known as Ginnie Mae. See Ginny Mae.

Government Survey System   See Rectangular (government) Survey System

Mortgage (GPM)             A loan in which the monthly principal and interest payments increase by a certain number of percentage each year
                           for a certain number of years and then level off for the remaining loan term.

Grant                      Transfer of title from the government to the first titleholder of a piece of property. This term is generally used by
                           states and the federal government. See also Patent.

Grantee                    A person who receives a conveyance of real property from a grantor. The person to whom an interest in real
                           property is conveyed. The person receiving a grant, or buying property.

Granting Clause            Words on a deed of conveyance that state the grantor’s intention to convey the property at the present time. This
                           clause is generally worded as “convey and warrant,” “grant,” “grant, bargain and sell” or the like.

Grantor                    The person issuing the grant, or selling property. The person transferring the title to or an interest in real property to
                           a grantee. The person conveying an interest in real property.

Gross Income Multiplier    A figure used as a multiplier of the gross annual income of a property to produce an estimate of the property’s

Gross Lease                A lease of property according to which a landlord pays all property charges regularly incurred through ownership,
                           such as repairs, taxes, insurance and operating expenses. Most residential leases are gross leases.

Gross Rent Multiplier
(GRM)                      The figure used as a multiplier of the gross monthly income of a property to produce an estimate of the property’s
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Ground Lease              A lease of land only, on which the tenant usually owns a building or is required to build as specified in the lease.
                          Such leases are usually long-term net leases; the tenant’s rights and obligations continue until the lease expires or
                          is terminated through default.

Ground Rent               The amount of money that is paid for the use of land when title to a property is held as a leasehold estate rather
                          than as a fee simple estate.

Group Home                A single-family residential structure designed or adapted for occupancy by unrelated developmentally disabled
                          persons. The structure provides long-term housing and support services that are residential in nature.

Growing-Equity Mortgage
(GEM)                     A loan in which the monthly payments increase annually, with the increased amount being used to directly reduce
                          the principal balance outstanding and thus shorten the overall term of the loan.

Guarantee Mortgage        A mortgage that is guaranteed by a third party.

Guaranteed Loan           Also known as a government mortgage.

Guaranty                  Agreement to pay the debt or perform the obligation of another in the event the debt is not paid or obligation not
                          performed. Differs from a surety agreement in that there must be a failure to pay or perform before the guaranty can
                          be in effect.

Gun                       See EDM

Gunter’s Chain            Unit of length equal to 66 feet, or 4 poles. This unit was apparently defined as one tenth of a furlong, a common unit
                          of length in the old days. The mile was redefined from the old Roman value of 5000 feet to 5280 feet in order to be
                          an even multiple of furlongs. A mile is 80 chains.

Gut                       A narrow passage between hills. A stream in such a passage. A drain.
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TERM                                                            DEFINITION
Habendum Clause           That part of a deed beginning with the words “to have and to hold,” following the granting clause and defining the
                          extent of ownership the grantor is conveying.

Hazard Insurance          Real estate insurance protecting against loss caused by fire, some natural causes, vandalism, etc., depending upon
                          the terms of the policy. Insurance coverage that compensates for physical damage to a property from fire, wind,
                          vandalism, or other hazards.

Hazard Ranking System     A system that provides a uniform method of scoring or ranking of the potential risk of a facility site where a
                          hazardous substance has been present. EPA developed the HRS to prioritize its cleanup efforts. 5 or higher for
                          inclusion on the National Priorities List (NPL). Facilities listed on the NPL receive the highest priority for cleanup.

Hazardous Substance       A substance or mixture of substances that poses a substantial present or potential risk to human health or the
                          environment; any substance designated by EPA to be reported if a designated quantity of the substance is spilled in
                          the waters of the United States or otherwise released into the environment

Hazardous Waste           A waste or combination of wastes that, because of its quantity, concentration, or physical, chemical, or infectious
                          characteristics, may either cause or significantly contribute to an increase in mortality or an increase in serious
                          irreversible illness, or may pose a substantial present or potential hazard to human health or the environment when
                          improperly treated, stored, transported, disposed of, or otherwise managed. Regulated under the Resource
                          Conservation and Recovery Act.

Hazardous Waste
Accumulation Area         An area that may store a hazardous substance for up to 90 days

Hazardous Waste
Storage Area              An area that may store a hazardous substance for up to one year.

Head                      The source of a stream.

Headright                 A Virginia system of land patents, prevalent in the 1600’s in which immigrants, including minor children, were
                          entitled to 50 acres of land apiece. It was customary for the person paying passage to claim the headright, though
                          the right appears to belong to the immigrant. Headrights could be sold or assigned to others. A headright system
                          was also used in other states including South Carolina and Georgia.

Headwaters                The smallest streams that create to small a larger stream.

Hectare                   Metric unit of area equal to 10,000 square meters, or 2.471 acres, or 107,639 square feet.

Heir                      One who might inherit or succeed to an interest in land under the state law of descent when the owner dies without
                          leaving a valid will.

Hereditament              Anything that can be inherited. A corporeal hereditament is tangible real or personal property that can be inherited.
                          An incorporeal hereditament includes intangible appurtenances, rents, and the like.

Heritage Assets           Heritage Assets are PP&E that are unique for one or more of the following reasons: historical or natural
                          significance; cultural, educational or artistic (e.g., aesthetic) importance; or significant architectural characteristics.
                          Heritage Assets are generally expected to be preserved indefinitely.

Hide                      Old English unit of area usually equal to 120 acres.

Highest and Best Use      The possible use of a property that would produce the greatest net income and thereby develop the highest value.

Hold Harmless Agreement   Provides an indemnification whereby a private party agrees to be financially liable for damages resulting from
                          injuries to persons or damages to property arising from governmental activities or other causes.

Holding Agency            The federal agency with accountability for property.

Holdover Tenancy          A tenancy whereby a lessee retains possession of leased property after the lease has expired and the landlord, by
                          continuing to accept rent, agrees to the tenant’s continued occupancy as defended by state law.

Holographic Will          A will that is written, dated and signed in the testator’s handwriting.

Home Equity Conversion
Mortgage (HECM)           A special type of mortgage that enables older home owners to convert the equity they have in their homes into
                          cash, using a variety of payment options to address their specific financial needs. Unlike traditional home equity
                          loans, a borrower does not qualify on the basis of income but on the value of his or her home. In addition, the loan
                          does not have to be repaid until the borrower no longer occupies the property. Sometimes called a reverse

Home Equity Line
Of Credit                 A mortgage loan, which is usually in a subordinate position, that allows the borrower to obtain multiple advances of
                          the loan proceeds at his or her own discretion, up to an amount that represents a specified percentage of the
                          borrower’s equity in a property.
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Home Equity Loan          A loan (sometimes called a line of credit) under which a property owner uses his or her residence as collateral and
                          can then draw funds up to a prearranged amount against the property.

Home Inspection           A thorough inspection that evaluates the structural and mechanical condition of a property. A satisfactory home
                          inspection is often included as a contingency by the purchaser. Contrast with appraisal.

HomeKeeperSM              Fannie Mae’s adjustable-rate conventional reverse mortgage, which allows older homeowners to borrow against the
                          value of their homes and receive the proceeds according to the payment option they select. The amount available is
                          based on the number of borrowers and their ages and the adjusted property value. Anyone 62 years or older who
                          either owns his or her own home free and clear or has very low mortgage debt is eligible.

Homeowners’ Association   A nonprofit association that manages the common areas of a planned unit development (PUD) or condominium
                          project. In a condominium project, it has no ownership interest in the common elements. In a PUD project, it holds
                          title to the common elements.

Homeowner’s Insurance     An insurance policy that combines personal liability insurance and hazard insurance coverage for a dwelling and its

Insurance Policy          A standardized package insurance policy that covers a residential real estate owner against financial loss from fire,
                          theft, public liability and other common risk.

Warranty (HOW)            A type of insurance that covers repairs to specified parts of a house for a specific period of time. It is provided by
                          the builder or property seller as a condition of the sale.

Homestead                 Land that is owned and occupied as the family home. In many states a portion of the area or value of this land is
                          protected or exempt from judgments or debts.

Mortgage Loan             A mortgage that enables eligible borrowers to obtain financing to remodel, repair, and upgrade their existing homes
                          or homes that they are purchasing. See also HomeStyle Standard Mortgage, HomeStyle Remodeler, HomeStyle
                          Community Mortgage and HomeStyle Consumer Energy Loan.

Host                      A unit or activity of one military department or agency that has management control of facilities and that provides
                          services and/or facilities to a unit or activity of another military department or agency.

Hours                     Degrees

Housing Expense Ratio     The percentage of gross monthly income that goes toward paying housing expenses.

Hub and Tack              A 2” by 2” stake that is set in the ground and that contains a nail (“tack”) that precisely marks the point being set.

HUD Median Income         Median family income for a particular county or metropolitan statistical area (MSA), as estimated by the Department
                          of Housing and Urban Development (HUD).

HUD-1 Statement           A document that provides an itemized listing of the funds that are payable at closing. Items that appear on the
                          statement include real estate commissions, loan fees, points, and initial escrow amounts. Each item on the
                          statement is represented by a separate number within a standardized numbering system. The totals at the bottom
                          of the HUD-1 statement define the seller’s net proceeds and the buyer’s net payment at closing. The blank form for
                          the statement is published by the Department of Housing and Urban Development (HUD). The HUD-1 statement is
                          also known as the “closing statement” or “settlement sheet.”

Hypothecate               To pledge property as security for an obligation or loan without giving up possession of it.
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TERM                                                            DEFINITION
Implied Agreement          A contract under which the agreement of the parties is demonstrated by their acts and conduct.

Importation Right          See Headright.

Improve                    To make land more valuable by clearing and planting. Land that was not improved by the owner might revert to the

Improvement                (1) Any structure, usually privately owned, erected on a site to enhance the value of the property-for example,
                           building a fence or a driveway. (2) A publicly owned structure added to or benefiting land, such as a curb, sidewalk,
                           street or sewer. (3) In addition to land amounting to more than repair or replacement and costing labor or capital
                           (e.g., buildings, pavements, roads, fences, pipelines, landscaping, and other structures more or less permanently
                           attached to the land).

Income Approach            The process of estimating the value of an income-producing property through capitalization of the annual net
                           income expected to be produced by the property during its remaining useful life.

Income Property            Real estate developed or improved to produce income.

Incorporeal Right          A nonpossessory right in real estate; for example, and easement or a right of way.

Indenture                  A written agreement. (Originally, the document was written in duplicate, and the two copies placed side by side and
                           ‘indented’, or cut, with a wavy line so they fit together perfectly.) See also Deed Poll.

Independent Contractor     Someone who is retained to perform a certain act but who is subject to the control and direction of another only as
                           to the end result and not as to the way in which the act is preformed. Unlike an employee, an independent
                           contractor pays for all expenses and social security and income taxes and receives no employee benefits. Most real
                           estate salespeople are independent contractors.

Index                      A number used to compute the interest rate for an adjustable-rate mortgage (ARM). The index is generally a
                           published number or percentage, such as the average interest rate or yield on Treasury bills. A margin is added to
                           the index to determine the interest rate that will be charged on the ARM. This interest rate is subject to any caps
                           that are associated with the mortgage.

Index Method               The appraisal method of estimating building costs by multiplying the original cost for current construction cost.

In-file credit report      An objective account, normally computer-generated, of credit and legal information obtained from a credit repository.

Inflation                  An increase in the amount of money or credit available in relation to the amount of goods or services available,
                           which causes an increase in the general price level of goods and services. Over time, inflation reduces the
                           purchasing power of a dollar, making it worth less.

Infrastructure             The basic installations and facilities on which the continuance and growth of a locale depend (roads, schools, power
                           plants, transportation, and communication systems).

Ingrants                   Property acquired for use by lease, license, or permit.

Inheritance Taxes          State-imposed taxes on a decedent’s real and personal property.

Initial Interest Rate      The original interest rate of the mortgage at the time of closing. This rate changes for an adjustable-rate mortgage
                           (ARM). Sometimes known as “start rate” or “teaser.”

Installation (AF)          Real property in which the Air Force has an interest or jurisdiction. Installations also include: Real property that the
                           Air Force controls by agreement with foreign governments or through other rights. Portions of installations that the
                           Air Force does not own but acquires by lease, permit, or other written agreement. The Joint Chiefs of Staff assign
                           such installations their installation indicator code.

Installation Restoration
Program (IRP)              A program established by the Department of Defense to meet requirements of CERCLA and SARA that identifies,
                           assesses, and cleans up or controls contamination from past hazardous waste disposal practices and hazardous
                           material spills.

Installation, Active       A facility in use by active organizations.

Installation, Inactive     An installation not in use by Active Army or Reserve Component organizations other than care taking detachments.

Installed Building
Equipment                  Items of equipment and furnishings, including materials for installation thereof, which are required to make the
                           facility usable and are attached as a permanent part of the structure (e.g., air-conditioning system, elevators, fixed
                           fire protection system).

Installment                The regular periodic payment that a borrower agrees to make to a lender.
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Installment Contract.        A contract for the sale of real estate whereby the purchase price is paid in periodic installments by the purchaser,
                             who is in possession of the property even though title is retained by the seller until a future date, which may be not
                             until final payment. Also called a contract for deed or articles of agreement for warranty deed.

Installment Loan             Borrowed money that is repaid in equal payments, known as installments. A furniture loan is often paid for as an
                             installment loan.

Installment Note             A note calling for payment of both principal and interest in specified amounts, or specified minimum amounts, at
                             specific intervals.

Installment Sale             A transaction in which the sale price is paid in two or more installments over two or more years. If the sale meets
                             certain requirements, a taxpayer can postpone reporting such income until future years by paying tax each year
                             only on the proceeds received that year.

Instrument                   Legal document.

Insurable Title              A property title that a title insurance company agrees to insure against defects and disputes.

Insurance                    A contract that provides compensation for specific losses in exchange for a periodic payment. An individual contract
                             is known as an insurance policy, and the periodic payment is known as an insurance premium.

Insurance Binder             A document that states that insurance is temporarily in effect. Because the coverage will expire by a specified date,
                             a permanent policy must be obtained before the expiration date.

Insured Mortgage             A mortgage that is protected by the Federal Housing Administration (FHA) or by private mortgage insurance (MI). If
                             the borrower defaults on the loan, the insurer must pay the lender the lesser of the loss incurred or the insured
                             amount. Interest The fee charged for borrowing money. A charge made by a lender for the use of money.

Interest Accrual Rate        The percentage rate at which interest accrues on the mortgage. In most cases, it is also the rate used to calculate
                             the monthly payments, although it is not used for an adjustable-rate mortgage (ARM) with payment change

Interest Rate                The rate of interest in effect for the monthly payment due.

Interest Rate
Buydown Plan                 An arrangement wherein the property seller (or any other party) deposits money to an account so that it can be
                             released each month to reduce the mortgagor’s monthly payments during the early years of a mortgage. During the
                             specified period, the mortgagor’s effective interest rate is “bought down” below the actual interest rate.

Interest Rate Ceiling        For an adjustable-rate mortgage (ARM), the maximum interest rate, as specified in the mortgage note.

Interest Rate Floor          For an adjustable-rate mortgage (ARM), the minimum interest rate, as specified in the mortgage note.

Interim Financing            A short-term loan usually made during the construction phase of a building project (in this case often referred to as
                             a construction loan)

Interstate Land Sales Full
Disclosure Act               A federal law that regulates the sale of certain real estate in interstate commerce.

Intestate                    The condition of a property owner who dies without leaving a valid will. Title to the property will pass to the
                             decedent’s heirs as provided in the law of descent. Having no will. If someone dies intestate, the court appoints an
                             administrator to settle the estate.

Intrinsic Value              An appraisal term referring to value created by a person’s personal preferences for a particular type of property.

Investiture                  See Livery Of Seizin.

Investment                   Money directed towards the purchase, improvement and development of an asset in expectation of income or

Investment Property          A property that is not occupied by the owner.

Involuntary Lien             A lien placed on property without the consent of the property owner.

IRA (Individual Retirement
Account)                     A retirement account that allows individuals to make tax-deferred contributions to a personal retirement fund.
                             Individuals can place IRA funds in bank accounts or in other forms of investment such as stocks, bonds, or mutual
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TERM                                                        DEFINITION
Joint Tenancy          Ownership of real estate between two or more parties who have been named in one conveyance as joint tenant’s.
                       Upon the death of a joint tenant, the decedent’s interest passes to the surviving joint tenant or tenant’s by the right
                       of survivorship. A form of co-ownership that gives each tenant equal interest and equal rights in the property,
                       including the right of survivorship.

Joint Venture          The joining of two or more people to conduct a specific business enterprise. A joint venture is similar to a
                       partnership in that is must be created by agreement to share in losses and profits. It is unlike a partnership in that
                       the venture is for one specific project only, rather than for a continuing business relationship.

Jointure               Property given to a prospective wife, to be enjoyed by her at her husband’s death. Differs from dower in the way in
                       which her future is protected.

Judgment               The formal decision of a court upon the respective rights and claims of the parties to an action or suit. After
                       judgment has been entered and recorded with the county recorder, it usually becomes a general lien on the
                       property of the defendant. A decision made by a court of law. In judgments that require the repayment of a debt, the
                       court may place a lien against the debtor’s real property as collateral for the judgment’s creditor.

Judgment Lien          A lien on the property of a debtor resulting from the decree of a court.

Judicial Foreclosure   A type of foreclosure proceeding used in some states that is handled as a civil lawsuit and conducted entirely under
                       the auspices of a court.

Judicial Precedent     In law, the requirements established by prior court decisions.

Jumbo Loan             A loan that exceeds Fannie Mae’s mortgage amount limits. Also called a nonconforming loan.

Junior Lien            An obligation, such as a second mortgage, that is subordinate in the right or lien priority to an existing lien on the
                       same reality.
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TERM                                                             DEFINITION
Labor                       The labor is a unit of area used in Mexico and Texas. In Texas it equals 177.14 acres (or 1 million square varas).

Laches                      An equitable doctrine used by courts to bar a legal claim or prevent the assertion of a right because of undue delay
                            or failure to assert the claim or right.

Land                        The earth’s surface, extending downward to the center of the earth and upward infinitely into space, including things
                            permanently attached by nature, such as trees and water.

Land Contract               See installment contract

Landmark                    A survey mark made on a ‘permanent’ feature of the land such as a tree, pile of stones, etc.

Late Charge                 The penalty a borrower must pay when a payment is made a stated number of days (usually 15) after the due date.

Latent Defect               A hidden structural defect that could not be discovered by ordinary inspection and that threatens the property’s
                            soundness or the safety of its inhabitants. Some states impose on sellers and licensees a duty to inspect for and
                            disclose latent defects.

Law Of Agency               See Agency

League (legua)              Unit of area used in the southwest U.S., equal to 25 labors, or 4428 acres (Texas), or 4439 acres (California). Also,
                            a unit of length

Lease                       A written or oral contract between landlord (lessor) and a tenant (lessee) that transfers the right to exclusive
                            possession and use of the landlord’s real property to the lessee for a specified period of time and for a stated
                            consideration (rent). By state law leases for longer than a certain period of time (generally one year) must be in
                            writing to be enforceable. A written agreement between the property owner and a tenant that stipulates the
                            conditions under which the tenant may possess the real estate for a specified period of time and rent.

Lease And Release           A practice in early Virginia that is equivalent to a sale. It was accomplished by a two step process of leasing the
                            property in question to the buyer, then releasing the buyer of the lease obligation.

Lease Option                A lease under which the tenant has the right to purchase the property either during the lease term or at its end.

Lease Purchase              The purchase of real property, the consummation of which is preceded by a lease, usually long term. Typically done
                            for tax or financing purposes.

Lease Term                  For non-operating leases, the lease term is the fixed non-cancelable term of the lease plus all periods.

Leasehold Estate            A tenant’s right to occupy real estate during the term of a lease, generally considered to be a personal property
                            interest. A way of holding title to a property wherein the mortgagor does not actually own the property but rather has
                            a recorded long-term lease on it.

Mortgage Loan               An alternative financing option that allows low- and moderate-income home buyers to lease a home from a nonprofit
                            organization with an option to buy. Each month’s rent payment consists of principal, interest, taxes and insurance
                            (PITI) payments on the first mortgage plus an extra amount that is earmarked for deposit to a savings account in
                            which money for a down payment will accumulate.

Legacy                      A disposition of money or personal property by will

Legal Description           A description of a specific parcel of real estate complete enough for an independent surveyor to locate and identify.
                            A property description, recognized by law, that is sufficient to locate and identify the property without oral testimony.

Legally Competent Parties   People who are recognized by the law as being able to contract with others; those of legal age and sound mind.

Legislative Jurisdiction    The authority to exercise state police power over an area. It refers to the regulation and control of community
                            affairs, especially with respect to maintenance of order, law, health, safety, and other matters affecting general
                            welfare. Legislative jurisdiction exists over an area when the governing body has authority to act with its full
                            executive power and judicial power to create and enforce laws. Types of legislative jurisdiction are exclusive (all
                            power in federal government), concurrent (powers exercised by both federal and state governments), partial (power
                            as delineated by the state’s cession), and proprietorial interest only (federal property interest, unaccompanied by
                            executive or judicial powers). Army policy is to acquire only a proprietorial interest in land and not to acquire any
                            special legislative jurisdiction.

Legs                        Tripod

Lessee                      See lease

Lessor                      See lease
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Leverage               The use of borrowed money to finance an investment.

Levy                   To assess; to seize or collect. To levy a tax is to asses a property and set the rate of taxation. To levy and execution
                       is to officially seize the property of a person in order to satisfy an obligation.

Liabilities            A person’s financial obligations. Liabilities include long-term and short-term debt, as well as any other amounts that
                       are owed to others.

Liability Insurance    Insurance coverage that offers protection against claims alleging that a property owner’s negligence or
                       inappropriate action resulted in bodily injury or property damage to another party.

License                (1) A privilege or right granted to a person by state to operate as a real estate broker or salesperson. (2) The
                       revocable permission for a temporary use of land-a personal right that can not be sold.

Lien                   A right given by law to certain creditors to have their debts paid out of property of a defaulting debtor, usually by
                       means of a court sale. A legal claim against a property that must be paid off when the property is sold.

Lien Theory            Some states interpret a mortgage as being purely a lien on real property. The mortgagee this has no right of
                       possession but must foreclose the lien and sell the property if the mortgagor defaults.

Life Cycle Costing     In property management, comparing one type of equipment with another based on both purchase cost and
                       operating cost over its expected useful lifetime.

Life Estate            An interest in real or personal property that is limited in duration to the lifetime of its owner or some other
                       designated person or persons.

Life Tenant            A person in possession of a lifetime estate.

Lifetime Payment Cap   For an adjustable-rate mortgage (ARM), a limit on the amount that payments can increase or decrease over the life
                       of the mortgage. See cap.

Lifetime Rate Cap      For an adjustable-rate mortgage (ARM), a limit on the amount that the interest rate can increase or decrease over
                       the life of the loan. See cap, interest rate ceiling and interest rate floor.

Limited Partnership    See Partnership

Line Of Credit         An agreement by a commercial bank or other financial institution to extend credit up to a certain amount for a
                       certain time to a specified borrower. See home equity line of credit.

Line Tree              Any tree that is on a property line, specifically one that is also a corner to another property.

Link                   Unit of length equal to 1/100 chain (7.92 inches).

Liquid Asset           A cash asset or an asset that is easily converted into cash.

Liquidated Damages     An amount predetermined by the parties to a contract as the total compensation to an injured party should the other
                       party breach the contract.

Liquidity              The ability to sell an asset and convert it into cash, at a price close to its true value, in a short period of time.

Lis Pendens            A recorded legal document giving constructive notice that an action affecting a particular property has been filed in
                       either a state or a federal court.

Listing Agreement      A contract between an owner (as principal) and a real estate broker (as agent) by which the broker is employed as
                       agent to find a buyer for the owner’s real estate on the owner’s terms, for which service the owner agrees to pay a

Listing Broker         The broker in a multiple-listing situation from whose office a listing agreement is initiated, as opposed to the
                       cooperating broker, from whose office negotiations leading up to a sale initiated. The listing broker and the
                       cooperating broker may be the same person.

Littoral Rights        (1) A landowner’s claim to use water in large navigable lakes and oceans adjacent to his or her property. (2) The
                       ownership rights to land bordering these bodies of water up to the high water mark.

Livery                 Delivery Of Ownership

Livery Of Seizin       An open and ‘notorious’ public ceremony conferring ownership of a freehold estate.

Loan                   A sum of borrowed money (principal) that is generally repaid with interest.

Loan Commitment        See commitment letter.

Loan Origination       The process by which a mortgage lender brings into existence a mortgage secured by real property.

Loan Origination Fee   A fee charged to the borrower by the lender for making a mortgage loan. The fee is usually computed as a
                       percentage of the loan amount.
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Loan To Value Ratio      The ratio, expressed as a percentage, of the amount of a loan to the value or selling price of real property. Usually,
                         the higher the percentage, the greater the interest charged. Maximum percentages for banks, savings and loans, or
                         government insured loans, is set by statute.

(LTV) percentage         The relationship between the principal balance of the mortgage and the appraised value (or sales price if it is lower)
                         of the property. For example, a $100,000 home with an $80,000 mortgage has a LTV percentage of 80 percent.

Lock-In                  A written agreement in which the lender guarantees a specified interest rate if a mortgage goes to closing within a
                         set period of time. The lock-in also usually specifies the number of points to be paid at closing.

Lock-In Period           The time period during which the lender has guaranteed an interest rate to a borrower. See lock-in

Loss Payable Clause      A clause in an insurance policy, listing the priority of claims in the event of destruction of the property insured.
                         Generally, a mortgagee, or beneficiary under a deed of trust, is the party appearing in the clause, being paid to the
                         amount owing under the mortgage or deed of trust before the owner is paid.

(Recorded Plat) System   A method of describing real property that identifies a parcel of land by reference to lot and block numbers within a
                         subdivision, as specified on a recorded subdivision plat.

Lower                    Toward the mouth of a stream. Further down along its course. Opposite of upper.
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TERM                                                             DEFINITION
Management Agreement        A contract between the owner of income property and management firm or individual property manager that outlines
                            the scope of the manager’s authority.

Margin                      For an adjustable-rate mortgage (ARM), the amount that is added to the index to establish the interest rate on each
                            adjustment date, subject to any limitations on the interest rate change.

Market                      A place where goods can be bought and sold and a price established.

Market Value                The most probable price property would bring in an arm’s-length transaction under normal conditions on the open

Marketable Title            Good or clear title, reasonably free from the risk of litigation over possible defects.

Master Association          A homeowners’ association in a large condominium or planned unit development (PUD) project that is made up of
                            representatives from associations covering specific areas within the project. In effect, it is a “second-level”
                            association that handles matters affecting the entire development, while the “first-level” associations handle matters
                            affecting their particular portions of the project.

Master Plan                 A comprehensive plan to guide the long-term physical development of a particular area.

Maturity                    The date on which the principal balance of a loan, bond, or other financial instrument becomes due and payable.

Maximum Financing           A mortgage amount that is within 5 percent of the highest loan-to-value (LTV) percentage allowed for a specific
                            product. Thus, maximum financing on a fixed-rate mortgage would be 90 percent or higher, because 95 percent is
                            the maximum allowable LTV percentage for that product.

Meander                     “with the meanders of the stream” means the survey line follows the twists and turns of the stream.

Mechanic’s Lien             A statutory lien created in favor of contractor’s laborers and materialmen who have preformed work or furnished
                            materials in the erection or repair of a building.

Merestone                   A stone that marks a boundary. See monument.

Merged Credit Report        A credit report that contains information from three credit repositories. When the report is created, the information is
                            compared for duplicate entries. Any duplicates are combined to provide a summary of a your credit.

Meridian                    One of a set of imaginary lines running north and south and crossing a base line at a definite point, used in the
                            rectangular (government) survey system of property description.

Messuage                    A dwelling house with its adjacent buildings and lands appropriated to the use of the household.

Description                 A legal description of a parcel of land that begins at a well-marked point and follows the boundaries, using
                            directions and distances around the tract, back to the place of beginning.

Mill                        One-tenth of one cent. Some states use a mill rate to compute real estate taxes; for example, a rate of 52 mills
                            would be $0.052 tax for each dollar of assessed valuation of a property.

Minor                       Someone who has not reached the age of majority and therefore does not have legal capacity to transfer title to real

Mitigation                  A method or action to avoid, minimize, rectify, reduce, or compensate for program or project impacts.

Mobilization                Augmentation of military forces by federalization of National Guard units, activation of Reserve units, order to active
                            duty of individual reservists, or increased Selective Service induction to meet force levels approved by the Secretary
                            of Defense.

Modification                The act of changing any of the terms of the mortgage.

Moiety                      One half. One of two equal parts. A share or portion.

Monetary Policy             Governmental regulation of the amount of money in circulation through such institutions as the Federal Reserve

Money Market Account        A savings account that provides bank depositors with many of the advantages of a money market fund. Certain
                            regulatory restrictions apply to the withdrawal of funds from a money market account.

Money Market Fund           A mutual fund that allows individuals to participate in managed investments in short-term debt securities, such as
                            certificates of deposit and Treasury bills.

Monthly Fixed Installment   That portion of the total monthly payment that is applied toward principal and interest. When a mortgage negatively
                            amortizes, the monthly fixed installment does not include any amount for principal reduction.
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Monthly Payment
Mortgage                  A mortgage that requires payments to reduce the debt once a month.

Month-To-Month Tenancy    A periodic tenancy under which the tenant rents for one month at a time. In the absence of a rental agreement (oral
                          or written) a tenancy is generally considered to be month to month

Monument                  A permanently placed survey marker such as a stone shaft sunk into the ground. A fixed natural or artificial object
                          used to establish real estate boundaries for a metes-and-bounds description.

More Or Less              This term is frequently used in deeds to qualify acreage, e.g. “50 acres, being the same more or less”. Even
                          accurate surveys have some error in the calculation of area and this phrase recognizes that fact.

Morgen                    Unit of area equal to about .6309 acres. It was used in Germany, Holland and South Africa, and was derived from
                          the German word Morgen (“morning”). It represented the amount of land that could be plowed in a morning.

Mortgage                  A conditional transfer or pledge of real estate as security for the payment or debt. Also, the document creating a
                          mortgage lien. A legal document that pledges a property to the lender as security for payment of a debt.

Mortgage Banker           Mortgage loan companies that originate, service and sell loans to investors. A company that originates mortgages
                          exclusively for resale in the secondary mortgage market.

Mortgage Broker           An agent of a lender who brings the lender and the borrower together. The broker receives a fee for this service. An
                          individual or company that brings borrowers and lenders together for the purpose of loan origination. Mortgage
                          brokers typically require a fee or a commission for their services.

Mortgage Insurance        A contract that insures the lender against loss caused by a mortgagor’s default on a government mortgage or
                          conventional mortgage. Mortgage insurance can be issued by a private company or by a government agency such
                          as the Federal Housing Administration (FHA). Depending on the type of mortgage insurance, the insurance may
                          cover a percentage of or virtually all of the mortgage loan. See private mortgage insurance.

Mortgage Insurance
Premium (MIP)             The amount paid by a mortgagor for mortgage insurance, either to a government agency such as the Federal
                          Housing Administration (FHA) or to a private mortgage insurance (MI) company.

Mortgage Lien             A lien or charge on the property of a mortgagor that secures the underlying debt obligations.

Mortgage Life Insurance   A type of term life insurance often bought by mortgagors. The amount of coverage decreases as the principal
                          balance declines. In the event that the borrower dies while the policy is in force, the debt is automatically satisfied
                          by insurance proceeds.

Mortgagee                 A lender in a mortgage loan transaction. The lender in a mortgage agreement.

Mortgagor                 A borrower in a mortgage loan transaction. The borrower in a mortgage agreement.

Mouth                     The place where a stream enters another, larger stream.

Multidwelling Units       Properties that provide separate housing units for more than one family, although they secure only a single

Multifamily Properties    Fannie Mae provides financing for multifamily (buildings with five or more units) rental properties through a
                          nationwide network of mortgage lenders.

Multiperil Policies       Insurance policies that offer protection from a range of potential perils, such as those of fire, hazard,public liability
                          and casualty.

Multiple-Listing Clause   A provision in an exclusive listing for the authority and obligation on the part of the listing broker to distribute the
                          listing to other brokers in the multiple-listing organization.

Service (MLS)             A marketing organization composed of member brokers who agree to share their listing agreements with one
                          another in the hope of procuring ready, willing and able buyers for their properties more quickly than they could on
                          their own. Most multiple-listing services accept the exclusive-right-to-sell or exclusive agency listings from their
                          member brokers.
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TERM                                                            DEFINITION
Narrows                    Narrow part of a stream.

National Defense
PP&E (ND PP&E)             ND PP&E are the PP&E components of weapons systems and support PP&E used by Military Departments in the
                           performance of military missions and vessels held in a preservation status by the Maritime Administration’s National
                           Defense Reserve Fleet.

National Pollutant
Discharge Elimination
System (NPDES)             A provision of the Clean Water Act that prohibits discharge of pollutants into waters of the United States unless a
                           permit is issued by EPA or an authorized state.

National Priorities List
(NPL)                      A list of sites where releases of hazardous materials might have occurred and might pose an unreasonable risk to
                           the health and safety of individuals, property, or the environment.

Native Americans           Used in the collective sense to refer to individuals, bands, or tribes that trace their ancestry to indigenous
                           populations of North America prior to Euro-American contacts.

Negative Amortization      A gradual increase in mortgage debt that occurs when the monthly payment is not large enough to cover the entire
                           principal and interest due. The amount of the shortfall is added to the remaining balance to create “negative”

Negotiable Instrument      A written promise or order to pay a specific sum of money that may be transferred by endorsement or delivery. The
                           transferee then has the original payee’s rights to payment.

Net Cash Flow              The income that remains for an investment property after the monthly operating income is reduced by the monthly
                           housing expense, which includes principal, interest, taxes, and insurance (PITI) for the mortgage, homeowners’
                           association dues, leasehold payments, and subordinate financing payments.

Net Income                 The difference between adjusted gross income and operating expenses. May or may not include depreciation.

Net Lease                  A lease requiring the tenant to pay not only rent but also the cost of incurred in maintaining the property, including
                           taxes, insurance, utilities and repairs.

Net Listing                A listing based on the net price the seller will receive if the property is sold. Under a net listing the broker can offer
                           the property for sale to the highest price obtainable to increase the commission. This type of listing is illegal in many

Net Operating Income
(NOI)                      The income projected for an income-producing property after deducting losses for vacancy and collection and
                           operating expenses.

Net Worth                  The difference between total assets and liabilities of an individual, corporation, etc. term investments if they
                           withdraw their money before maturity. Such a penalty would be assessed, for instance, if someone who has a six
                           month certificate of deposit withdrew the money after four months. The value of all of a person’s assets, including
                           cash, minus all liabilities.

No Cash-Out Refinance      A refinance transaction in which the new mortgage amount is limited to the sum of the remaining balance of the
                           existing first mortgage, closing costs (including prepaid items), points, the amount required to satisfy any mortgage
                           liens that are more than one year old (if the borrower chooses to satisfy them), and other funds for the borrower’s
                           use (as long as the amount does not exceed 1 percent of the principal amount of the new mortgage).

Non-Agent                  An intermediary between a buyer and seller, or landlord and tenant, who assist both parties with a transaction with
                           out representing either. Also known as facilitator, transaction broker, transaction coordinator and contract broker.

Nonarmory                  Land, improvements, and structures, other than an armory, that are required for the logistical support, training, and
                           administration of the ARNG.

Nonconforming Use          A use of property that is permitted to continue after a zoning ordinance prohibiting it has been established for the

Nonexcess Property         Property required for an agency mission but proposed for sale to obtain proceeds in an amount sufficient to fund
                           acquisition or replacement land or facilities.

Nonhomogeneity             A lack of uniformity; dissimilarity. Because no two parcels of land are alike, real estate is said to be

Nonliquid Asset            An asset that cannot easily be converted into cash.

Nonusable Condition        Used to describe a facility as unserviceable, because it has deteriorated to the extent that it needs extensive
                           restoration or it is a danger to the health and safety of personnel or to equipment
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Not Being Put
To Optimum Use      Under GSA regulations, the term “not being put to optimum use” refers to an entire property or portion thereof, with
                    or without improvements, which (1) even though utilized for current program purposes of the accountable executive
                    agency is of such nature or value, or is in such a location that it could be utilized for a different significantly higher
                    and better purpose, or (2) the costs of occupying are substantially higher than would be applicable for other suitable
                    properties that could be made available to the accountable executive agency through transfer, purchase, or lease
                    with total net savings to the government after consideration of property values as well as costs of moving,
                    occupancy, efficiency of operations, environmental effects, regional planning, and employee morale. Real property
                    not being put to optimum use is to be declared excess.

Not Utilized        Under GSA regulations, the term “not utilized” refers to an entire property or portion thereof, with or without
                    improvements, not occupied for current program purposes of the accountable executive agency, or occupied in
                    caretaker status only. Real property not utilized is to be declared excess.

Note                A legal document that obligates a borrower to repay a mortgage loan at a stated interest rate during a specified
                    period of time. See promissory note.

Note Rate           The interest rate stated on a mortgage note.

Notice Of Default   A formal written notice to a borrower that a default has occurred and that legal action may be taken.

Novation            Substituting a new obligation for an old one or substituting new parties to an existing obligation.

Nuncupative Will    An oral will declared by the testor in his or her final illness, made before witnesses and afterward reduced to writing.
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TERM                                                              DEFINITION
Obsolescence                 The loss of value due to features that are outmoded or less useful. Obsolescence may be functional or economic.

Occupancy Permit             A permit is issued by the appropriate local governing body to establish that that property is suitable for habitation by
                             meeting certain safety and health standards.

Offbase Installation (AF)    An installation without an aircraft operating area that provides operational, training, administrative, or logistical
                             support to a primary, auxiliary, or detached installation and depends on that installation for other support. An
                             installation that is separated only by a road, fence or other segregating construction is not considered an offbase

Offer And Acceptance         Two essential components of a valid contract; a “meeting of the minds”.

Offeror/Offered              The person who makes the offer is the offeror. The person to whom the offer is made is the offered.

Office Of Thrift
Supervision (OTS)            Monitors and regulates the saving and loan industry. OTS was created by FIRREA.

Open Listing                 A listing contract under which the broker’s commission is contingent on the broker’s producing a ready, willing and
                             able buyer before the property is sold by the seller or another broker.

Open-End Loan                A mortgage loan that is expandable by increments up to a maximum dollar amount, the full loan being secured by
                             the same original mortgage.

Option                       An agreement to keep open for a set period an offer to sell or purchase property.

Option Listing               Listing with a provision that gives the listing broker the right to purchase the listed property.

Ordnance and
Explosives (O&E)             Bombs and warheads, guided and ballistic missiles; artillery and mortar; rocket ammunition, mines; demolition
                             charges, pyrotechnics, grenades; containerized and uncontainerized explosives and propellants; military chemical
                             agents; and all similar and related items or components, explosive in nature or otherwise designed to cause
                             damage to personnel or material. Soils with explosive constituents are considered O&E if the concentration is
                             sufficient to be reactive and to present an imminent safety hazard.

Original Principal Balance   The total amount of principal owed on a mortgage before any payments are made.

Origination Fee              A fee paid to a lender for processing a loan application. The origination fee is stated in the form of points. One point
                             is 1 percent of the mortgage amount. A fee made by a lender for making a real estate loan. Usually a percentage of
                             the amount loaned, such as one percent.

Ostensible Agency            A form of implied agency relationship created by the actions of the parties involved rather than by written agreed

Out                          An ‘out’ was ten chains. When counting out long lines, the chain carriers would put a stake at the end of a chain,
                             move the chain and put a stake at the end, and so on until they ran “out” of ten stakes.

Outgrant                     An authorization for use of military real property controlled by the Department of the Army to other military
                             departments, federal agencies, state and local governmental agencies, and private organizations or individuals.
                             Types of outgrants include leases, licenses, permits, easements, and consents.

Outgrant (AF)                A lease, license, easement, or permit that provides an interest in or a right to use Air Force real property.

Outlease                     A contract for exclusive possession of military real property for a designated period, usually in consideration of rent.

Overdraft                    (1) An overdrawing of money from a bank (2) the amount overdrawn

Owner Financing              A property purchase transaction in which the property seller provides all or part of the financing.
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TERM                                                         DEFINITION
Package Loan             A real estate loan used to finance the purchase of both real property and personal property, such as in the purchase
                         of a new home that includes carpeting, window coverings and major appliances.

Parole Evidence Rule     A rule of evidence providing that a written agreement is the final expression of the agreement of the parties, not to
                         be varied or contradicted by prior contemporaneous oral or written negotiations.

Partial Payment          A payment that is not sufficient to cover the scheduled monthly payment on a mortgage loan.

Participation Mortgage   A mortgage loan wherein the lender has a partial equity interest in the property or receives a portion of the income
                         from the property.

Partition                The division of cotenants’ interest in real property when the parties do not all voluntarily agree to terminate the co-
                         ownership; takes place through court procedures.

Partnership              An association of two or more individuals who carry on a continuing business for profit as co-owners. Under the law
                         a partnership is regarded as a group of individuals rather than as a single entity. A general partnership is a typical
                         form of joint venture in which each general partner shares in the administration, profits and losses of the operation.
                         A limited partnership is a business arrangement whereby the operation is administered by one or more general
                         partners and funded, by and large, by limited or silent partners, who are by law responsible for losses only to the
                         extent of third investments.

Party Wall               A wall that is located on or at a boundary line between two adjoining parcels of land and is used or is intended to be
                         used by the owners of both properties.

Patent                   Transfer of title from the government to the first titleholder of a piece of property. This term was generally used by
                         the Crown or its representative. See also grant. A grant or franchise of land from the United States government.

Payment Cap              The limit on the amount the monthly payment can be increased on an adjustable-rate mortgage when the interest
                         rate is adjusted.

Payment Change Date      The date when a new monthly payment amount takes effect on an adjustable-rate mortgage (ARM) or a graduated-
                         payment adjustable-rate mortgage (GPARM). Generally, the payment change date occurs in the month immediately
                         after the adjustment date.

Payoff Statement         See reduction certificate

Equipment                Equipment that contains a concentration of polychlorinated biphenyls (PCBs) from 50 to 449 parts per million or

Per Diem                 Daily

Percentage Lease         A lease, commonly used for commercial property, whose rental is based on the tenant’s gross sales at the
                         premises; it usually stipulates a base monthly rental plus a percentage of any gross sales above a certain amount.

Perch                    See pole .

Percolation Test         A test of the soil to determine if it will absorb and drain water adequately to use a septic system for sewage disposal

Periodic Payment Cap     For an adjustable-rate mortgage (ARM), a limit on the amount that payments can increase or decrease during any
                         one adjustment period.

Periodic Rate Cap        For an adjustable-rate mortgage (ARM), a limit on the amount that the interest rate can increase or decrease during
                         any one adjustment period, regardless of how high or low the index might be.

Permit                   Temporary authorization conferred on one government agency to use property under the jurisdiction of another
                         government agency. Rental is not usually offered for this privilege. In AR 405-90, the terms permit and license are
                         considered to be identical and interchangeable. The directive notes that whenever a permit is used, a license could
                         properly be used and that a real estate permit is generally used to authorize use of Army real property by another
                         federal agency.

Personal Property        Any property not considered real property. Personal property includes all property except land and fixedin- place
                         buildings, naval vessels, and records of the federal government. Any property that is not real property.

Physical Deterioration   A reduction in a property’s values resulting from a decline in physical condition; can be cause by action of the
                         elements or by ordinary ware & tare.

PITI                     See principal, interest, taxes and insurance (PITI) below.

PITI reserves            A cash amount that a borrower must have on hand after making a down payment and paying all closing costs for
                         the purchase of a home. The principal, interest, taxes, and insurance (PITI) reserves must equal the amount that
                         the borrower would have to pay for PITI for a predefined number of months.
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Planned Unit
Development (PUD)          A planned combination of diverse land uses, such as housing, recreation and shopping, in one contained
                           development or subdivision

Planting And Seating       See improve. In Virginia colonial law a patentee was required to cultivate an acre of land and build a small house
                           on the property, otherwise the patent would revert to the government.

Plat                       A drawing of a parcel of land.

Plat Map                   A map of town, section or subdivision indicating the location and boundaries of individual properties.

Plottage                   The increase in value or utility resulting from the consolidation (assemblage) of two or more adjacent lots into one
                           larger lot.

Point                      A point of the compass. There are four cardinal points (North, South, East, West), and 28 others yielding 32 points
                           of 11.25 degrees each. A survey line’s direction could be described as a compass point, as in “NNE” (north
                           northeast). To improve precision, the points would be further subdivided into halves or quarters as necessary, for
                           example, “NE by North, one quarter point North”. In some areas, “and by” meant one half point, as in “NE and by
                           North”. A one-time charge by the lender for originating a loan. A point is 1 percent of the amount of the mortgage.
                           Point (1) One percent of the amount of the loan. (2) A commission paid for arranging a loan.

Point Of Beginning (POB)   In a metes-and-bounds legal description, the starting point of the survey, situated in one corner of the parcel; all
                           metes-and-bounds descriptions must follow the boundaries of the parcel back to the point of beginning. The starting
                           point of the survey

Pole                       Unit of length and area. Also known as a perch or rod. As a unit of length, equal to 16.5 feet. A mile is 320 poles. As
                           a unit of area, equal to a square with sides one pole long. An acre is 160 square poles. It was common to see an
                           area referred to as “87 acres, 112 poles”, meaning 87 and 112/160 acres.

Police Power               The government’s right to impose laws, statues and ordinances, including zoning public health, safety and welfare.

Biphenyls (PCBs)           Any of a family of industrial compounds produced by chlorination of biphenyl. These compounds are noted chiefly
                           as an environmental pollutant that accumulates in organisms and concentrates in the food chain with resultant
                           pathogenic and teratogenic effects. They also decompose very slowly.

Portable Building          A building designed and constructed to be easily dismantled to facilitate economical movement from one site to

Posse                      In posse (Latin). In the future or which might exist in the future. See also esse.

Possessory                 Relating to ownership.

Potable Water              Water that is suitable for drinking.

Power Of Attorney          A written instrument authorizing a person, the attorney-in-fact, to act as agent for another person to the extent
                           indicated in the instrument. A legal document that authorizes another person to act on one’s behalf. A power of
                           attorney can grant complete authority or can be limited to certain acts and/or certain periods of time.

Prearranged Refinancing
Agreement                  A formal or informal arrangement between a lender and a borrower wherein the lender agrees to offer special terms
                           (such as a reduction in the costs) for a future refinancing of a mortgage being originated as an inducement for the
                           borrower to enter into the original mortgage transaction.

Preforeclosure Sale        A procedure in which the investor allows a mortgagor to avoid foreclosure by selling the property for less than the
                           amount that is owed to the investor.

Prehistoric                The period of time before the written record.

Premises                   A somewhat fluid term meaning land and its appurtenances, or land and its buildings and structures.

Prepaid Items              On a closing statement, item that have been paid in advance by the seller, such as insurance premiums and some
                           real estate taxes, for which he or she must be reimbursed by the buyer.

Prepayment                 Any amount paid to reduce the principal balance of a loan before the due date. Payment in full on a mortgage that
                           may result from a sale of the property, the owner’s decision to pay off the loan in full, or a foreclosure. In each case,
                           prepayment means payment occurs before the loan has been fully amortized.

Prepayment Penalty         A charge imposed on a borrower who pays off the loan principal early. This penalty compensates the lender for
                           interest and other charges that would otherwise be lost. A fee that may be charged to a borrower who pays off a
                           loan before it is due.

Pre-Qualification          The process of determining how much money a prospective home buyer will be eligible to borrow before he or she
                           applies for a loan.
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President’s Program To
Revitalize Base
Closure Communities           On July 2, 1993, the President announced a major new program to speed the economic recovery of communities
                              near closing military installations. The President pledged to give top priority to early use of each closing installation’s
                              most valuable assets. A principal goal of the initiative is to provide for rapid redevelopment and creation of new jobs.
                              In announcing the program, the President outlined the five parts of his community revitalization plan: jobs-centered
                              property disposal that puts local economic redevelopment first; fast-track environmental cleanup that removes
                              delays while protecting human health and the environment; appointment of transition coordinators at installations
                              slated for closure; easy access to transition and redevelopment help for workers and communities; and larger
                              economic development planning grants to base closure communities.

Price-Fixing                  See anti-trust laws

Primary Installation (AF)     A lease, license, easement, or permit that provides an interest in or a right to use Air Force facilities for
                              administrative and operating activities to carry out a given mission. For recording and reporting real property, this is
                              normally the parent or control installation.

Primary Mortgage Market       The mortgage market in which loans are originated and consisting of lenders such as commercial banks, savings
                              and loans association and mutual saving banks.

Prime Rate                    The interest rate that banks charge to their preferred customers. Changes in the prime rate influence changes in
                              other rates, including mortgage interest rates.

Principal                     (1) A sum loaned or employed as a fund or an investment, as distinguished from its income or profits. (2) The
                              original amount (as in a loan) of the total due and payable at a certain date. (3) A main party to a transaction-the
                              person for whom the agent works. The amount borrowed or remaining unpaid. The part of the monthly payment that
                              reduces the remaining balance of a mortgage.

Principal Balance             The outstanding balance of principal on a mortgage. The principal balance does not include interest or any other
                              charges. See remaining balance.

Principal Meridian            The main imaginary line running north and south and crossing a base line at definite points, used by surveyors for
                              reference in locating and describing land under the rectangular (government) survey system of legal description

Principal, Interest, Taxes,
and Insurance (PITI)          The four components of a monthly mortgage payment. Principal refers to the part of the monthly payment that
                              reduces the remaining balance of the mortgage. Interest is the fee charged for borrowing money. Taxes and
                              insurance refer to the amounts that are paid into an escrow account each month for property taxes and mortgage
                              and hazard insurance.

Prior Appropriation           A concept of water ownership in which the landowner’s rights to use available water is based on a government-
                              administered permit system.

Priority                      The order of position or time. The priority of liens is generally determined by the chronological order in which the
                              lien documents are recorded; tax liens, however, have priority even over previously recordedliens.

Private Mortgage
Insurance (PMI)               Insurance provided by private carrier that protects a lender against a loss in the event of a foreclosure and
                              deficiency. Mortgage insurance that is provided by a private mortgage insurance company to protect lenders against
                              loss if a borrower defaults. Most lenders generally require MI for a loan with a loan-tovalue (LTV) percentage in
                              excess of 80 percent.

Probate                       The process of proving a decedent’s will and settling the estate. The signing of a will was typically witnessed by
                              neighbors, who would later swear in court that they saw the decedent sign the will prior to death. This “proved” that
                              the will was actually that of the decedent.

Procuring Cause               The effort that brings about the desired result. Under an open listing the broker who is the procuring cause of the
                              sale receives the commission.

Profit & Loss Statement       A statement showing the income and expenses of a business over a stated time, the difference being the profit or
                              loss for the period.

Installation (AF)             An installation for which the Air Force does not have real property jurisdiction, control, or accountability but that an
                              Air Force organization occupies or programs for use. The Joint Chiefs of Staff assign such installations their
                              programmed installation indicators.

Progression                   An appraisal principle that states that, between dissimilar properties, the value of the lesser-quality property is
                              favorably affected by the presence of the better quality property.

Promissory Note               A promise in writing, and executed by the maker, to pay a specified amount during a limited time, or on demand, or
                              at sight, to a named person, or on order, or to bearer. A written promise to repay a specified amount over a
                              specified period of time.
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Property              Any kind of thing which has a value and which one can exercise the rights of ownership upon, including possession,
                      use, and disposal.

Property Manager      Someone who manages real estate for another person for compensation. Duties include collecting rents,
                      maintaining the property and keeping it up all accounting.

Property Reports      The mandatory federal and state documents complied by subdividers and developers to provide potential
                      purchasers with facts about a property prior to their purchase.

Proprietary Lease     A lease given by the corporation that owns a cooperative apartment building to the shareholder for the
                      shareholder’s right as a tenant to an individual apartment.

Proration             To divide (prorate) property taxes, insurance premiums, rental income, etc., between buyer and seller
                      proportionately to time of use, or the date of closing.

Protected Class       Any group of people designated as such by the Department of Housing (HUD) in consideration of federal and state
                      civil rights legislation. Currently includes ethnic minorities, women, children, religious groups, the handicapped and

Prove Up              See Improve.

Public Auction        A meeting in an announced public location to sell property to repay a mortgage that is in default.

Public Benefit
Discount Conveyance   A method of disposal of government real property by which state or local government entities may obtain property at
                      less than fair market value. Such conveyances are sponsored by federal agencies for uses that benefit the public,
                      such as use of property for educational purposes, parks, recreation, wildlife conservation, or public health.

Public Domain         Land or interest in land owned by the United States and administered by the Secretary of the Interior, through the
                      Bureau of Land Management, without regard to how the United States acquired ownership, except lands located in
                      the Outer Continental Shelf and lands held for the benefit of Indians, Aleuts, and Eskimos

PUD (Planned Unit
Development)          A project or subdivision that includes common property that is owned and maintained by a homeowners’ association
                      for the benefit and use of the individual PUD unit owners.

Pueblo                A Spanish grant of less than 1000 acres.

Puffing               Exaggerated or superlative comments or opinions.

Punk                  See railroad.

Pur Autre Vie         “For the life of another.” A life estate pur autre vie is a life estate that is measured by the life of a person other than
                      the grantee.

Purchase              Acquisition of real estate through buying for a mutually agreed price between a willing buyer and a willing seller.

Purchase And
Sale Agreement        A written contract signed by the buyer and seller stating the terms and conditions under which a property will be

Purchase Money
Transaction           The acquisition of property through the payment of money or its equivalent.

Mortgage (PMM)        A note secured by a mortgage or deed of trust given by a buyer, as a borrower, to a seller, as a lender, as part of
                      the purchase price of the real estate.

Pyramiding            The process of acquiring additional properties by refinancing properties already owned and investing the loan
                      proceeds in additional properties.
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TERM                                                         DEFINITION

Qualifying Ratios        Calculations that are used in determining whether a borrower can qualify for a mortgage. They consist of two
                         separate calculations: a housing expense as a percent of income ratio and total debt obligations as a percent of
                         income ratio.

Quantity-Survey Method   The appraisal method of estimating building costs by calculating the cost of all physical components in the
                         improvements, adding the cost to assemble them and then including the indirect cost associated with such

Quiet Title              A court action to remove a cloud on the title.

Quitclaim Deed           A common type of deed in which the seller relinquishes claim to whatever rights were held on the property, but does
                         not guarantee that that the property is actually free of claims by others. A deed that transfers without warranty
                         whatever interest or title a grantor may have at the time the conveyance is made.

Quitrent                 A rent paid in lieu of required feudal services. See fee and socage. The quitrent can be considered a real estate tax.
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TERM                                                             DEFINITION

Radon                       A colorless, naturally occurring, radioactive, inert gaseous element formed by radioactive decay of radium in soil or
                            rocks. A radioactive gas found in some homes that in sufficient concentrations can cause health problems.

Railroad                    Slang for eleven, as in 42

Rancho                      A Spanish grant of more than 1000 acres.

Range                       An area that is reserved and normally equipped for practice in weapons delivery and/or shooting at targets.

Rate Lock                   A commitment issued by a lender to a borrower or other mortgage originator guaranteeing a specified interest rate
                            for a specified period of time. See lock-in.

Mortgage                    A fixed-rate mortgage that includes a provision that gives the borrower a one-time option to reduce the interest rate
                            (without refinancing) during the early years of the mortgage term.

Ratification                Methods of creating an agency relationship in which the principal accepts the conduct of someone who acted
                            without prior authorization as the principal’s agent.

Ready, Willing And
Able Buyer                  One who is prepared to buy property on the seller’s terms and is ready to take positive steps to consummate the

Real Estate                 Includes land and interests therein, leaseholds, standing timber, buildings, improvements, and appurtenances
                            thereto. It also includes buildings, piers, docks, warehouses, basements, utility systems, rights-of-way, and
                            easements, whether temporary or permanent, and improvements permanently attached to and ordinarily considered
                            real estate. Sand, gravel, and stone-quarried products in their natural state are real estate. Land includes minerals
                            in their natural state and standing timber; when severed from the land, these become personal property. GSA has
                            excepted growing crops from the definition of real estate when the disposal agency designates such crops for
                            disposal by severance and removal from the land. Rights and interest include leaseholds, easements, rights-of-way,
                            water rights, air rights, and rights to lateral and subjacent support. Installed building equipment is considered real
                            estate until severed. Equipment in place is considered personal property. The terms “real estate” and “real property”
                            are synonymous and interchangeable.

Real Estate Agent           A person licensed to negotiate and transact the sale of real estate on behalf of the property owner.

Real Estate
Investment Syndicate        See syndicate

Real Estate Investment
Trust (REIT)                Trust ownership of real estate by a group of individuals who purchase certificates of ownership in the trust, which it
                            turns invest the money in real property and distributes the profits back to the investors free of corporate income tax.

Real Estate License Law     State law enacted to protect the public from fraud, dishonestly and incocompontence in the purchase or sale or real

Real Estate Mortgage
Investment Conduit
(REMIC)                     A tax entity that issues multiple classes of investor interests (securities) backed by a pool of mortgages.

Real Estate Recovery Fund   A fund established in some states for real estate license revenues to cover claims of aggrieved parties who have
                            suffered monetary damage through the actions of a real estate licensee.

Real Estate Settlement
Procedures Act (RESPA)      The federal law that requires certain disclosures to consumers about mortgage loan settlements. The law also
                            prohibits the payment or receipt of kickbacks and certain kinds of referral fees.

Real Estate Settlement
Procedures Act (RESPA)      A consumer protection law that requires lenders to give borrowers advance notice of closing costs.

Real Property               Land and appurtenances, including anything of a permanent nature such as structures, trees, minerals, and the
                            interest, benefits, and inherent rights thereof. The interest, benefits and rights inherent in real estate ownership.
                            Land. See also chattel. See definition of real estate.

Real Property (AF)          All Land, Buildings, Structures, Utility Systems, Improvements and Related property rights. Equipment that
                            personnel attach to and make part of buildings and structures (such as heating systems). Real property does not
                            include movable equipment (such as plant equipment).

Real Property Accountable
Officer (AF)                The individual (military or civilian) that the base commander appoints to maintain real property accountable records.
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Real Property Installed
Equipment (RPIE) (AF)      Those items of government-owned or leased accessory equipment, apparatus and fixtures that are essential to the
                           function of the real property and are permanently attached to, integrated into, or on government-owned or leased
                           property. Excluded is organization or collateral equipment reflected in the equipment authorization inventory data
                           (EAID), as shown in AFMAN 23-110 (formerly AFM 67-1, Volume IV). Also excluded are other technical, medical,
                           commissary, aircraft installed, fixed laundry and dry cleaning, MARS, cryptographic, automatic data processing,
                           rental equipment research and development, and so on.

Realignment                In BRAC, some missions of the base will cease or be relocated, but others will remain. The active component will
                           still be host of the remaining portion of the base. Only a portion of the base will be excessed and the property
                           disposed of, with realignment (missions ceasing or relocating) and property disposal being separate actions.

Realtor                    A registered trademark term reserved for the sole use of active members of local realtor boards affiliated with the
                           National Association of Realtors.

Realtor®                   A real estate broker or an associate who holds active membership in a local real estate board that is affiliated with
                           the National Association of Realtors.

Reassignment               Change of administrative or command jurisdiction over real estate from one command or agency in the Army to
                           another one within the Army. A reassignment is accomplished by completion of DD Form 1354 (Transfer and
                           Acceptance of Military Real Property) or other appropriate Army forms to transfer accountability.

Recapture                  Acquisition of estate by the government’s exercise of its right to have former military land and facilities returned for
                           use by DoD during a national emergency. The triggering event for recapture is mobilization.

Rescission                 The cancellation or annulment of a transaction or contract by the operation of a law or by mutual consent.
                           Borrowers usually have the option to cancel a refinance transaction within three business days after it has closed.

Reconciliation             The final step in the appraisal process, in which the appraiser combines the estimates of value received from the
                           sales comparison, cost and income approaches to arrive at a final estimate of market value for the subject property.

Reconveyance Deed          A deed used by a trustee under a deed of trust to return the title to the trustor.

Record Of Decision (ROD)   A document prepared by the federal government that articulates the reasoning behind a decision. RODs are
                           essential documents in NEPA and in the CERCLA cleanup process.

Recorder                   The public official who keeps records of transactions that affect real property in the area. Sometimes known as a
                           “Registrar of Deeds” or “County Clerk.”

Recording                  The act of entering or recording documents affecting or conveying interest in real estate in the recorder’s office
                           established in each county. Until it is recorded, a deed or mortgage ordinarily is not effective against subsequent
                           purchasers or mortgages. The noting in the registrar’s office of the details of a properly executed legal document,
                           such as a deed, a mortgage note, a satisfaction of mortgage, or an extension of mortgage, thereby making it a part
                           of the public record.

Rectangular (Government)
Survey System              A system established in 1785 by the federal government, providing for surveying and describing land by reference
                           to principal meridians and base lines.

Redemption                 The right of a defaulted property owner to recover his or her property by curing the default

Redemption Period          A period of time established by state law during which a property owner had the right to redeem his or her real
                           estate from a foreclosure or tax sale by paying the sales price, interest and cost. Many states do not have mortgage
                           redemption laws.

Redlining                  The illegal practice of lending institution denying loans or restricting their number for certain areas of a community.

Reduction Certificate
(Payoff Statement)         The document signed by a lender indicating the amount required to pay a loan balance in full and satisfy the debt;
                           used in the settlement process to protect both the seller’s and the buyers interest.

Refinance Transaction      The process of paying off one loan with the proceeds from a new loan using the same property as security.

Regression                 An appraisal principle that states that, between dissimilar properties, the value of the better-quality property is
                           affected adversely by the presence of the lesser-quality property.

Regulation Z               Implements the truth-in-lending act required credit institutions to inform borrowers of the true cost of obtaining credit.

Rehabilitation Mortgage    A mortgage created to cover the costs of repairing, improving, and sometimes acquiring an existing property.

Release Deed               A document, also known as deed of reconveyance, that transfers all rights given a trustee under a deed of trust
                           loan back to the grantor after the loan has been fully repaid.

Re-locatable Building      A building designed for the purpose of being readily moved, erected, disassembled, stored, and reused (e. g.,
                           trailer-type building but not mobile trailer). Usually considered personal property but in certain instances is on the
                           real property account.
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Remainder                      Transfer of ownership to someone on the death of another. For example, land may be sold to person A for use
                               during their lifetime, but then remaindered to person B at the death of A.

Remainder Interest             The remnant of an estate that has been conveyed to take effect and be enjoyed after the termination of a prior
                               estate, such as when an owner conveys life estate to one party and the remainder to another.

Remaining Balance              The amount of principal that has not yet been repaid. See principal balance.

Remaining Term                 The original amortization term minus the number of payments that have been applied.

Remedial Investigation
(RI)                           An investigation performed to fully define the nature and extent of contamination at a site and evaluate possible
                               methods of cleaning up the site. During the investigation, groundwater, surface water, soil, sediment, and biological
                               samples are collected and analyzed to determine the type and concentration of each contaminant. Samples are
                               collected at different areas and depths to help determine the spread of contamination.

Removal Action                 In the event of an immediate threat or potential threat to human health or the environment, a short-term mitigating
                               or cleanup action may be implemented. The goal of the removal action is to isolate the contamination hot spots and
                               their source from all biological receptors. Often, removal actions do not completely clean up a site, and additional
                               remediation steps are required

Rent                           A fixed, periodic payment made by a tenant of a property to the owner for possession and use, usually by prior
                               agreement of the parties.

Rent Loss Insurance            Insurance that protects a landlord against loss of rent or rental value due to fire or other casualty that renders the
                               leased premises unavailable for use and as a result of which the tenant is excused from paying rent.

Rent Schedule                  A statement of proposed rental rates, determined by the owner or the property manager or both, base on a
                               building’s estimated expenses, market supply and demand and the owner’s long-range goals for the property.

Rent With Option To Buy        See lease-purchase mortgage loan.

Repayment Plan                 An arrangement made to repay delinquent installments or advances. Lenders’ formal repayment plans are called
                               “relief provisions.”

Replacement Cost               The construction cost at current prices of property that is not necessarily an exact duplicate of the subject property
                               but serves the same purpose or function as the original.

Replacement Reserve Fund       A fund set aside for replacement of common property in a condominium, PUD, or cooperative project — particularly
                               that which has a short life expectancy, such as carpeting, furniture, etc.

Reproduction Cost              The construction cost at current prices of an exact duplicate of the subject property.

Reserved Public Lands          See withdrawn public lands

Resolution Trust Corporation   The organization created by FIRREA to liquidate the assets failed savings and loan association.

Restrictive Covenant           An agreement contained in a deed or lease that restricts the use and occupancy of real property.

Retrocession                   The act of giving back to a state all or part of the federal legislative jurisdiction formerly enjoyed by the government.

Mortgage (RAM)                 A loan under which the homeowner receives monthly payments based on his or her accumulated equity rather than
                               a lump sum. The loan must be repaid at a prearranged date or upon the death of the owner or the sale of the

Reversionary Interest          The remnant of the estate that the grantor holds after granting a life estate to another person.

Reversionary Right             The return of the rights of possession and quiet enjoyment to the lessor at the time of expiration of a lease.

Revert                         Return of ownership to a former owner (or heirs).

Revolving Liability            A credit arrangement, such as a credit card, that allows a customer to borrow against a preapproved line of credit
                               when purchasing goods and services. The borrower is billed for the amount that is actually borrowed plus any
                               interest due.

Right of Entry                 A form of license, typically to perform surveys and exploration work or for construction prior to acquisition or lease of
                               land. Rental is not usually offered for this privilege.

Right Of First Refusal         A provision in an agreement that requires the owner of a property to give another party the first opportunity to
                               purchase or lease the property before he or she offers it for sale or lease to others.

Right Of Ingress Or Egress     The right to enter or leave designated premises.

Right Of Survivorship          In joint tenancy, the right of survivors to acquire the interest of a deceased joint tenant. See joint tenancy
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Right-Of-Way            The right given by one landowner to another to pass over the land, construct a roadway or use as a pathway,
                        without actually transferring ownership.

Riparian Rights         An owner’s right in land that borrowers on or includes a stream, river or lake. These rights includes access to and
                        use of the water.

Risk Management         Evaluation and selection of appropriate property and other insurance.

River                   Large stream.

Rodman                  The person holding the rod with the EDM prism. This person is the modern version of a chain carrier or chain man.

Rood                    Unit of area usually equal to 1/4 acre.

Room                    “in the room of” means in the place of, instead of.

Rules And Regulations   Real estate licensing authority orders that govern licensee’s activities; they usually have the same force and effect
                        as statutory law.

Run                     Small stream.

Runoff                  The noninfiltrating water entering a stream or other conveyance channel shortly after a rainfall event.

Rural Housing Service
(RHS)                   An agency within the Department of Agriculture, which operates principally under the Consolidated Farm and Rural
                        Development Act of 1921 and Title V of the Housing Act of 1949. This agency provides financing to farmers and
                        other qualified borrowers buying property in rural areas who are unable to obtain loans elsewhere. Funds are
                        borrowed from the U.S. Treasury.
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TERM                                                              DEFINITION

Sale And Leaseback         A transaction in which an owner sells his or her improved property and , as part of the same transaction, signs a
                           long-term lease to remain in possession of the premises.

Sale-Leaseback             A technique in which a seller deeds property to a buyer for a consideration, and the buyer simultaneously leases the
                           property back to the seller.

Sales Comparison
Approach                   The process of estimating the value of a property by examining and comparing actual sales of comparable

Sales Person               A person who performs real estate activities wile employed by or associated with a licensed real estate broker.

Satisfaction Of Mortgage   A document acknowledging the payment of a mortgage debt.

Scire Facias               A requiring of a party to show why a judgment should not be vacated, executed, or annulled.

Screening                  An agency’s circulating a notice that real property under its control is no longer needed, thereby allowing other
                           agencies to indicate their firm requirement for its use and to request its transfer.

Searles Spiral             A surveying technique used by railroad surveyors in the late 1800s and early 1900s whereby they approximate a
                           spiral by use of multiple curved segments.

Second Mortgage            A mortgage that has a lien position subordinate to the first mortgage.

Mortgage Market            A market for the purchase and sale of existing mortgages, designed to provide greater liquidity for mortgages; also
                           called secondary money market. Mortgages are first originated in the primary mortgage market. The buying and
                           selling of existing mortgages.

Section                    A portion of township under the rectangular (government) survey system. A townships divided into 36 sections,
                           numbered one thought 36. A section is a square with mile long sides and an area of one square mile or 640 acres.
                           In the U.S. public land surveying system, an area one mile square. See aliquot.

Secured Loan               A loan that is backed by collateral.

Security                   The property that will be pledged as collateral for a loan.

Security Agreement         See Uniform commercial code

Security Deposit           A payment by tenant, held by the landlord during the lease term and kept (wholly or partially) on default or
                           destruction of the premises by the tenant.

Seizin                     Ownership or ‘in fact’ possession of a freehold estate. Inferred here is an increasing degree of ownership with the
                           passage of time, as the possessor makes productive use of the land. Seizin was originally not an estate, but a way
                           to gain one, as by adverse possession. This is rooted in the Roman concept that whoever worked the land should
                           be its owner.

Seller Take-Back           An agreement in which the owner of a property provides financing, often in combination with an assumable
                           mortgage. See owner financing.

Separate Property          Under community property laws, property owned solely by either spouse before the marriage, acquired by gift or
                           inheritance after the marriage or purchased with separate funds after the marriage.

Sergeantry                 Non-military service to a lord in exchange for land.

Serverance                 Changing and item of real estate to personal property by detaching it from the land; for example, cutting down a

Servicer                   An organization that collects principal and interest payments from borrowers and manages borrowers’ escrow
                           accounts. The servicer often services mortgages that have been purchased by an investor in the secondary
                           mortgage market.

Servicing                  The collection of mortgage payments from borrowers and related responsibilities of a loan servicer.

Servient Estate            The land on which an easement exists that benefits other land.

Servient Tenement          Land on which an easement exists in favor of an adjacent property (called a dominant estate); also called a servient

Setback                    The amount of space local zoning regulations require between a lot line and a building line.

Settlement                 See closing.
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Severalty                  Ownership of real property by one person only, also called sole ownership.

Sharecropping              In an agricultural lease, the agreement between the landowner and the tenant farmer to split the crop or the profit
                           from its sales, actually sharing the crop.

Mortgage (SAM)             A mortgage loan in which the lender, in exchange for a loan with a favorable interest rate, participated in the profits
                           (if any) the borrower receives when the property is eventually sold.

Shoal                      Shallows.

Shoot                      Measure distance with an EDM

Single-Family Properties   One- to four-unit properties including detached homes, townhomes, condominiums, and cooperatives.

Situs                      The personal preference of people for one area over another, not necessarily based on objective facts and

Socage                     Holding of land by a tenant in return for fixed payment or for non-military service to the lord. This system was
                           eventually replaced by our system of taxation. See quitrent.

Soil Type                  A category or detailed mapping unit used for soil surveys based on phases or changes within a series (e. g.), slope,

Soke                       The jurisdiction of a court.

Solid Waste Management     Supervised handling of waste materials from their source through recovery processes to disposal

Special Agent              One who is authorized by a principal to perform a single act or transaction; a real estate broker is usually a special
                           agent authorized to find ready, will able buyer for a particular property.

Special Assessment         A tax or levy customarily imposed against only those specific parcels of real estate that will benefit from a proposed
                           public improvement like a street or a sewer.

Special Deposit Account    An account that is established for rehabilitation mortgages to hold the funds needed for the rehabilitation work so
                           they can be disbursed from time to time as particular portions of the work are completed.

Special Warranty Deed      A deed in which the grantor warrants, or guarantees, the title only against defects arising during the period of his or
                           her tenure and ownership of the property and not against defects existing before that time, generally using the
                           language, “By, through or under the grantor but not otherwise.”

Specific Lien              A lien affecting or attaching only to a certain, specific parcel of land or piece of property.

Specific Performance       A legal action to compel a party to carry out the terms of a contract.

Spike                      Usually a 60 penny nail used to mark survey points in hard ground.

Spring                     A pool or other source of water that feeds a stream.

Square-Foot Method         The appraisal method of estimating building cost by multiplying the number of square feet in the improvements
                           being appraised by the cost per square foot for recently constructed similar improvements.

Standard Payment
Calculation                The method used to determine the monthly payment required to repay the remaining balance of a mortgage in
                           substantially equal installments over the remaining term of the mortgage at the current interest rate.

State                      The various states, the District of Columbia, the Virgin Islands, and the Commonwealth of Puerto Rico.

State Historic
Preservation Officer
(SHPO)                     The official within each state, authorized by the state at the request of the Secretary of the Interior, to act as a
                           liaison for purposes of implementing the National Historic Preservation Act.

Statement                  (1) Summary for customers of the transactions that occurred over the preceding month. A bank statement lists all
                           deposits and withdrawals, as well as the running account balances. A brokerage statement shows all stock, bond,
                           commodity futures, or options trades, interest actions, as well as a summary of the worth of the accounts at month
                           end. A trade supplier provides a summary of open account transactions. (2) Statement drawn up by businesses to
                           show the status of their assets and liabilities and the results of their operations as of a certain date.

Statue Of Limitation       That law pertaining to the period of time with in which certain instruments, such as deeds, be in writing to be legally

Statute Of Frauds          The part of a state law that requires certain instruments, such as deeds, real estate sales contracts and certain
                           leases, to be in writing to be legally enforceable.
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Statutory Lien            A lien imposed on property by statute-a tax lien, for example- in contrast to an equitable lien, which arises out of the
                          common law.

Statutory Redemption      The right of the defaulted property owner to recover the property after its sale by paying the appropriate fees and

Steering                  The illegal practice of channeling home seekers to particular areas, either to maintain the homogeneity of an area
                          or to change the character of an area, which limits their choices of where they can live.

Step-Rate Mortgage        A mortgage that allows for the interest rate to increase according to a specified schedule (i.e., seven years),
                          resulting in increased payments as well. At the end of the specified period, the rate and payments will remain
                          constant for the remainder of the loan.

Stewardship Land          Land not acquired for, or in connection with, General PP&E is Stewardship Land. “Acquired for or in connection
                          with” is defined as including land acquired with the intent to construct General PP&E and land acquired in
                          combination with General PP&E, including not only land used as the foundation, but also adjacent land considered
                          to be the common grounds to General PP&E. Without exception, all land provided to DoD from the public domain,
                          or at no cost, shall be classified as Stewardship Land, regardless of its use. Therefore, public domain or no-cost
                          land used in a General PP&E context shall be classified as Stewardship Land, not as General PP&E land.

Stigmatized Property      A property that has acquired an undesirable reputation due to an event occurred on or near it, such as violent
                          crime, gang-related activity, illness or personal tragedy. Some states restricted the disclosure of information about
                          stigmatized properties.

Straight (Term) Loan      A loan in which only interest is paid during the term of the loan, with the entire principal amount due with the final
                          interest payment.

Straight-Line Method      A method of calculating depreciation for tax purposes, computed by dividing the adjusted basis of a property by the
                          estimated number of years of remaining useful life.

Straw Deed,
Strawman Deed             Two deeds filed in succession, the first from party A to party B, second from B back to A. This was used to sidestep
                          legal restrictions of sales between spouses or joint owners, or to incorporate a new survey description. Party B is a
                          trusted intermediary, either a close friend or attorney.

Strip                     A rectangular piece of land adjoining a parcel, created when a resurvey turns up a tiny bit larger than the original
                          survey. The difference is accounted for by temperature or other effects on measuring chains. See also gore.

Subagent                  One who is employed by a person already acting as an agent. Typically a reference to a salesperson licensed
                          under a broker (agent) who is employed under the terms of listing agreement.

Subdivider                One who buys an undeveloped land, divides it into smaller, usable lots and sells the lots to potential users.

Subdivision               A tract of land divided by the owner, known as the subivider, into blocks, buildings lots and streets according to a
                          recorded subdivision plats, which must comply with local ordinances and regulations. A housing development that is
                          created by dividing a tract of land into individual lots for sale or lease.

Subdivision And
Development Ordinances    Municipal ordinances that establish requirements for subdivisions and ordinances.

Subdivision Plat          See plat map

Sublease                  See subletting

Subletting                The leasing of premises by a lessee to a third party for a part of the lessee’s remaining term. See also assignment.

Subordinate Financing     Any mortgage or other lien that has a priority that is lower than that of the first mortgage.

Subordination             Relegation to a lesser position, usually in respect to a right security.

Subordination Agreement   A written agreement between holders of liens on a property that changes the priority of mortgage, judgment and
                          other liens under certain circumstances.

Subrogation               The substitution of one creditor for another, with the substituted person succeeding to the legal rights and claims of
                          the original claimant. Subrogation is used by title insurers to acquire from the injured party rights to sue in order to
                          recover any claims they have paid.

Subsidized Second
Mortgage                  An alternative financing option known as the Community Seconds® mortgage for low- and moderateincome
                          households. An investor purchases a first mortgage that has a subsidized second mortgage behind it. The second
                          mortgage may be issued by a state, county, or local housing agency, foundation, or nonprofit corporation. Payment
                          on the second mortgage is often deferred and carries a very low interest rate (or no interest rate). Part of the debt
                          may be forgiven incrementally for each year the buyer remains in the home.
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Substitution           An appraisal principle that states that the maximum value of a property tends to be set by the cost of purchasing an
                       equally desirable and valuable substitute properly, assuming that no costly delay is encountered in making the

Subsurface Rights      Ownership rights in a parcel of real estate to the water, minerals, gas, oil and so forth that lie beneath the surface of
                       the property.

Suit For Possession    A court suit initiated by a landlord to evict a tenant from leased premises after the tenant has breached one of the
                       terms of the lease or has held possession of the property after the lease’s expiration.

Suit To Quiet Title    A court action intended to establish or settle the title to a particular property, especially when there is a cloud on the

Superfund              Popular name of the hazardous-waste cleanup fund established by the Comprehensive Environmental Response,
                       Compensation and Liability Act (CERCLA)

Superfund Amendments
and Reauthorization
Act (SARA)             An amendatory statue that contains stronger cleanup standards for contaminated sites, increased funding for
                       superfund and clarifications of lender liability and innocent landowner immunity. Also see Comprehensive
                       Environmental Response, Compensation and Liability Act (CERCLA)

Supply                 The amount of goods available in the market to be sold at a given price. The term is often coupled with demand.

Supply & Demand        The appraisal principle that follows the interrelationship of the supply of and demand for real estate. As apprasing is
                       based on economic concepts, this principle recognizes that real property is subject to the influences of the market
                       place just as is any other commodity.

Surety Bond            An agreement by an insurance or bonding company to be responsible for certain possible defaults, debts or
                       obligations contracted for by an insured party; in essence, a policy insuring one’s personal and / or financial
                       integrity. In the real estate business a surety bond is generally used to ensure that a particular project will be
                       completed at a certain date or that the contract will be performed as stated.

Surface Danger Zone    The area designated on the ground of a training complex (to include associated safety areas) for the vertical and
                       lateral containment of projectiles, fragments, debris, and components resulting from the firing or detonation of
                       weapon systems, including explosives.

Surface Rights         Ownership rights in a parcel of real estate that are limited to surface of the property and do not include the air
                       above it (air rights) or the minerals below the surface (subsurface rights)

Surface Water          All water naturally open to the atmosphere and all wells, springs, or other collectors that are directly influenced by
                       surface water

Surplus Real Estate    Any excess real property not required for the needs and discharge of the responsibilities of all federal agencies, as
                       determined by the GSA Administrator.

Survey                 The process by which boundaries are measured and land areas are determined; the onsite measurement of lot
                       lines, dimensions and position of a house on a lot, including the determination of any existing encroachments or
                       easements. A drawing or map showing the precise legal boundaries of a property, the location of improvements,
                       easements, rights of way, encroachments, and other physical features.

Swamp                  In the southeast, a stream, particularly one that has swampy parts. A marsh.

Sweat Equity           Contribution to the construction or rehabilitation of a property in the form of labor or services rather than cash.

Syndicate              A combination of people or firms formed to accomplish a business venture of mutual interest by pooling resources.
                       In a real estate investment syndicate the parties own and/or develop property, with the main profit generally arising
                       from the sale of the property.
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TERM                                                           DEFINITION
Tacking                   Adding or combining successive periods of continuous occupation of real property by adverse possessors. This
                          concept enables someone who has not been in possession for the entire statutory period to establish a claim of
                          adverse possession.

Tax Credit                An amount by which tax is owed is reduced directly.

Tax Deed                  An instrument, similar to a certificate of sale, given to a purchaser at a tax sale. See also certificate of sale.

Tax Lien                  A charge against property, created by operation of law. Tax liens and assessments take priority over all liens.

Tax Sale                  A court-ordered sale of real property to raise money to cover delinquent taxes.

Taxation                  The process by which a government or municipal quasi-public body raises monies to fund it operation.

Tenancy By The Entirety   A form of joint tenancy held by husband and wife. Title automatically transfers to the survivor upon the death of one
                          party. Neither party can sell or divide the property without the consent of the other. A type of joint tenancy of
                          property that provides right of survivorship and is available only to a husband and wife. Contrast with tenancy in

Tenancy In Common         Title held by two or more people where each person can sell their interest without the consent of the other owners.
                          There are no rights of survivorship. A type of joint tenancy in a property without right of survivorship. Contrast with
                          tenancy by the entirety and with joint tenancy.

Tenant                    One who holds or possesses lands or tenements by any kind of rights or title. A unit or activity of one military
                          agency that receives services and occupies facilities provided by another military agency through a mutually
                          developed written or oral agreement

Tenant Improvement        Alterations to the interior of the building to meet the functional demands of the tenant.

Tenant-Stockholder        The obligee for a cooperative share loan, who is both a stockholder in a cooperative corporation and a tenant of the
                          unit under a proprietary lease or occupancy agreement.

Tenement                  Permanent property, whether concrete or not, such as land, buildings, cars, or the stock represented by a stock
                          certificate. In most common usage it means a house or building.

Testate                   Having a will.

Testator                  A person who has made a valid will. A woman often is referred to as a testatrix, although testator can be used for
                          either gender.

Teste                     (Latin). Witness.

Third-Party Origination   A process by which a lender uses another party to completely or partially originate, process, underwrite, close, fund,
                          or package the mortgages it plans to deliver to the secondary mortgage market. See mortgage broker.

Thirds                    See dower

Threatened Species        Plant and wildlife species likely to become endangered in the foreseeable future.

Tier (Township Strip)     A strip of land six miles wide, extending east and west and numbered north and south according to its distance from
                          the base line in the rectangular (government) survey system of legal description.

Time Is of Essence        A phrase in a contract that requires the performance of a certain act within a stated amount of time.

Time-Share                A form of ownership interest that may include an estate of interest in property and which allows use of the property
                          for a fixed or variable time period.

Title                     Legal ownership as evidenced by a deed or other instrument. A legal document evidencing a person’s right to or
                          ownership of a property.

Title Company             A company that specializes in examining and insuring titles to real estate.

Title Insurance           A policy insuring the owner or mortgagee against loss by reason of defects in the title to a parcel of real estate,
                          other tan encumbrances, defects and matters specifically excluded by the policy. Insurance that protects the lender
                          (lender’s policy) or the buyer (owner’s policy) against loss arising from disputes over ownership of a property.

Title Search              The examination of public records relating to real estate to determine the current state of the ownership. A check of
                          the title records to ensure that the seller is the legal owner of the property and that there are no liens or other claims

Title Theory              Some states interpret a mortgage to mean that the lender is the owner of the mortgaged land. Upon full payment of
                          the mortgage debt the borrower becomes the landowner.

To Wit                    That is to say.
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Torrens System          A method of evidencing title by registration with the proper public authority, generally called the register, named for
                        its founder, Sir Robert Torrens.

Total Expense Ratio     Total obligations as a percentage of gross monthly income. The total expense ratio includes monthly housing
                        expenses plus other monthly debts.

Township                In the U.S. public land surveying system, an area six miles square, containing 36 sections. The townships are
                        organized in rows and are identified with respect to a reference latitudinal baseline, for example, Township 13 North.
                        See range. The principal unit of the rectangular (government) survey system. A township is a square with six-mile
                        sides and an area of 36 square miles.

Township Strips         See tier

Trade Equity            Equity that results from a property purchaser giving his or her existing property (or an asset other than real estate)
                        as trade as all or part of the down payment for the property that is being purchased.

Trade Fixture           An article installed by a tenant under the terms of a lease and removable by the tenant before the lease expires.

Training Complex        Includes all firing ranges, weapons training facilities, associated impact areas, and maneuver training areas within
                        the installation/community boundary.

Training Land (s)       All types of facilities (for example, ranges, maneuver land, direct support facilities, or proficiency courses) dedicated
                        to the conduct of preparing and sustaining personnel and units to meet mission roles and standards. Examples
                        include but are not limited to weapon systems use and proficiency, occupational skills, and standards development.

Transfer                Change of jurisdiction over real property from one federal agency or department to another, including military
                        departments and defense agencies. A transfer accords permanent irrevocable use of land coupled with the authority
                        to control and regulate all aspects of the land. Transfer by the Army to another military department is usually
                        accomplished by Secretarial Memorandum under 10 USC2571 Transfer to agencies outside DoD are in accordance
                        with delegations from GSA or by specific statutory authority and are usually accomplished by Secretarial letter.

Transfer of Ownership   Any means by which the ownership of a property changes hands. Lenders consider all of the following situations to
                        be a transfer of ownership: the purchase of a property “subject to” the mortgage, the assumption of the mortgage
                        debt by the property purchaser, and any exchange of possession of the property under a land sales contract or any
                        other land trust device. In cases in which an inter vivos revocable trust is the borrower, lenders also consider any
                        transfer of a beneficial interest in the trust to be a transfer of ownership.

Transfer Tax            Tax stamps required to be affixed to a deed by state and / or local law. State or local tax payable when title passes
                        from one owner to another.

Treasury Index          An index that is used to determine interest rate changes for certain adjustable-rate mortgage (ARM) plans. It is
                        based on the results of auctions that the U.S. Treasury holds for its Treasury bills and securities or is derived from
                        the U.S. Treasury’s daily yield curve, which is based on the closing market bid yields on actively traded Treasury
                        securities in the over-the-counter market. See adjustable-rate mortgage (ARM).

Trust                   A fiduciary arrangement whereby property is conveyed to a person or institution, called a trustee, to be held and
                        administered on behalf of another person, called a bebficiary. The one who conveys the trust is a trustor.
                        Confidence placed in someone by giving them property to be held or used for another’s benefit. The property held
                        in trust.

Trust Deed              An instrument used to create a mortgage lien by which the borrower conveys title to a trustee, who holds it as
                        security for the benefit of the noteholder (the lender) ; also called a deed of trust.

Trust Deed Lien         A lien on the property of a trustor that secures a deed of trust loan.

Trustee                 An individual to whom another’s property is entrusted. A fiduciary who holds or controls property for the benefit of

Trustee’s Deed          A deed executed by a trustee conveying land held in trust

Trustor                 A borrower in a deed of trust loan transaction

Truth-in-Lending        A federal law that requires lenders to fully disclose, in writing, the terms and conditions of a mortgage, including the
                        annual percentage rate (APR) and other charges.

Two-Step Mortgage       An adjustable-rate mortgage (ARM) that has one interest rate for the first five or seven years of its mortgage term
                        and a different interest rate for the remainder of the amortization term.

Property                A property that consists of a structure that provides living space (dwelling units) for two to four families, although
                        ownership of the structure is evidenced by a single deed.
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TERM                                                          DEFINITION
Underutilized            Under GSA regulations, the term “underutilized” refers to an entire property or portion thereof, with or without
                         improvements, that is used only at irregular intervals or intermittent periods by the accountable executive agency for
                         current program purposes of that agency, or is used for current program purposes that can be satisfied by only a
                         portion of the property. Underutilized real property is to be declared excess.

Underwriting             The process of evaluating a loan application to determine the risk involved for the lender. Underwriting involves an
                         analysis of the borrower’s creditworthiness and the quality of the property itself.

Undivided Interest       See tenancy in common

Unenforceable Contract   A contract that has all the elements of a valid contract, yet neither party can sue the other to force performance of it.
                         For example, an unsigned is usually unenforceable

Ordnance (UXO)           An item of ordnance that has failed to function as designed, or has been abandoned or discarded and is still
                         capable of functioning and causing injury to personnel or material

Commercial Code          A codification of commercial law, adopted in most states, that attempts to make uniform all laws relating commercial
                         transactions, including chattel mortgages and bulk transfers. Security interest in chattels are created by an
                         instrument known as a security agreement. To give notice of the security interest, a financing statement must be
                         recorded. Article 6 of the code regulates bulk transfers—the sale of a business as a while, including all fixtures,
                         chattels and merchandise.

Unilateral Contract      A one-sided contract wherein one party makes a promise so as to induce a second party to do something. The
                         second party is not legally bound to perform; however, if the second party does not comply, the first party is
                         obligated to keep the promise.

Unit Of Ownership        The four unities that are traditionally needed to create a joint tenancy— unity of title, time, interest and possession.

Unit-In-Place Method     The appraisal method of estimating building cost by calculating the cost of all the physical components in the
                         structure, with the cost of each item including its proper installation, connection ect.; also called segregated cost

Unsecured Loan           A loan that is not backed by collateral.

Upper                    Toward the head of a stream. Further up along its course. Opposite of lower.

US Environmental
Protection Agency        The independent federal agency established in 1970 to regulate federal environmental matters and oversee the
                         implementation of federal environmental laws.

Usury                    Charging interest at a higher rate than the maximum rate established by state law.

Utilization Survey       An on-site survey of an installation or activity to determine whether federal real property is being adequately utilized
                         to justify retention.
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TERM                                                        DEFINITION
VA loan                A mortgage loan on approved property made to a qualified veteran by an authorized lender and guaranteed by the
                       Department of Veteran Affairs in order to limit the lender’s possible loss.

VA mortgage            A mortgage that is guaranteed by the Department of Veterans Affairs (VA). Also known as a government mortgage.

Vacated Premises       Property from which all military personnel and missions have been vacated.

Valid Contract         A contract that complies with all the essentials of a contract and is binding and enforceable on all parties to it.

Value                  The power of a good or service to command other goods in exchange for the present worth of future rights to its
                       income or amenities.

Vara                   Unit of length (the “Spanish yard”) used in the U.S. southwest. The vara is used throughout the Spanish speaking
                       world and has values around 33 inches, depending on locale. The legal value in Texas was set to 33 1/3 inches
                       early in the 1900’s.

Variance               Permission obtained by zoning authorities to build a structure or conduct a use that is expressly prohibited by the
                       current zoning laws; an exception from zoning ordinances.

Vendee                 A buyer, usually under the terms of a land contract.

Vendor                 A seller, usually under the terms of a land contract.

Vested                 Having the right to use a portion of a fund such as an individual retirement fund. For example, individuals who are
                       100 percent vested can withdraw all of the funds that are set aside for them in a retirement fund. However, taxes
                       may be due on any funds that are actually withdrawn.

Viz., Vizt.            Videlicet (Latin). That is to say.

Voidable Contract      A contract that seems to be valid on the surface but may be rejected or disaffirmed by one or both parties.

Voluntary Alienation   See alienation

Voluntary Lien         A lien placed on property with the knowledge and consent of the property owner.
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TERM                                                          DEFINITION
Warrant                  A governmental order authorizing some action. An arrest warrant instructs a sheriff to arrest someone. A land
                         warrant instructs a state to issue land to someone.

Warranty Deed            A deed in which the seller warrants having a valid title and that the property is clear of any liens.

Waste Land               Land that has not been claimed, or which has escheated.

Waters (“watters”) of    In the drainage of.

Wetlands                 Areas that are inundated or saturated with surface water or groundwater at a frequency and duration sufficient to
                         support a prevalence of vegetation typically adapted for life in saturated soil. This classification includes swamps,
                         marshes, bogs, and similar areas. Jurisdictional wetlands are those wetlands which meet the vegetation, soils, and
                         hydrology criteria under normal circumstances (or meet the special circumstances as described in the US Army
                         Corps of Engineers’ 1987 wetland delineation manual where one or more of these criteria may be absent) and are a
                         subset of “waters of the United States.”

What-If Analysis         An affordability analysis that is based on a what-if scenario. A what-if analysis is useful if you do not have complete
                         data or if you want to explore the effect of various changes to your income, liabilities, or available funds or to the
                         qualifying ratios or down payment expenses that are used in the analysis.

What-If Scenario         A change in the amounts that is used as the basis of an affordability analysis. A what-if scenario can include
                         changes to monthly income, debts, or down payment funds or to the qualifying ratios or down payment expenses
                         that are used in the analysis. You can use a what-if scenario to explore different ways to improve your ability to
                         afford a house.

Will                     A written document, properly witnessed, providing for the transfer of title to property owned by the deceased, called
                         the testator

Withdrawal               Acquisition of public domain lands for either exclusive or nonexclusive use by a federal agency.

Withdrawn Public Lands   Public domain lands held back for the use or benefit of an agency by reservation, withdrawal, or other restriction for
                         a special government purpose. Withdrawn lands are typically used for national parks, wildlife refuges, and national
                         defense. Withdrawal of public lands generally has the effect of segregating such land from lease, sale, settlement,
                         or other disposition under the public land laws.

Witness Tree             Generally used in the U.S. public land states, this refers to the trees close to a section corner. The surveyor blazed
                         them and noted their position relative to the corner in his notebook. Witness trees are used as evidence for the
                         corner location.

Worker’s Compensation    Laws that require an employer to obtain insurance coverage to protect his or her employees who are injured in the
                         course of their employment.

Wraparound Loan          A method of refinancing in which the new mortgage is placed in secondary, or subordinate, position; the new
                         mortgage includes both the unpaid principal balance of the first mortgage and whatever additional sums are
                         advanced by the lender. In essence it is an additional mortgage in which another lender refinanced a borrower by
                         lending an amount without disturbing the existence of the first mortgage.

Wraparound Mortgage      A mortgage that includes the remaining balance on an existing first mortgage plus an additional amount requested
                         by the mortgagor. Full payments on both mortgages are made to the wraparound mortgagee, who then forwards the
                         payments on the first mortgage to the first mortgagee.

Zero                     Zero degrees, minutes, and seconds. A perfect zero.

Zoning                   The division of a municipality into districts for the purpose of regulating land use, types of buildings, required yards,
                         necessary off-street parking, and other prerequisites to development. Zones are typically shown on a map, and the
                         text of the zoning ordinance specifies requirements for each zoning category.

Zoning Ordinance         An exercise of police power by a municipality to regulate and control the character and use of property.

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