n. Terminology

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n. Terminology1/39MortgageIt is common to hear people say they have taken out a mortgage when they have taken out a home loan. What they have really done, though, is taken a loan by signing a promissory note and a mortgage. The promissory note promises the borrower (also called the mortgagor) will pay back the loan to the lender (or the mortgagee) under specified terms. The mortgage provides security for the loan. It is a type of interest in the property and is recorded on the property title. In some states, the title to the property is actually held by the lender, with the lender giving most of the property rights to the borrower. In other states title is held by the borrower. If the borrower fails to repay the loan, the lender forecloses on the property, essentially taking away all rights to the property from the borrower.

2/39Deed of trustWhereas a mortgage is between two parties--the borrower and the lender-- a deed of trust is between three parties--the borrower, the lender and a neutral third party called a trustee. By using a deed of trust in the home loan process, the borrower and lender agree that title to the property will be held by a trustee until the loan is paid off. Most of the rights and responsibilities of owning the property are given to the borrower. In a foreclosure, the trustee is allowed to sell the property and give the proceeds to the lender.

3/39Security deed (also known as The security deed may be known by several different names including:Deed to secure a debt;Trust deed; and,Land contract.)A security deed functions in a similar fashion as a mortgage. The security deed is an interest in real estate which gives legal title of property to the lender of the mortgage for the term of the mortgage note.

4/39Note (promissory note)A promissory note is a legal and financial instrument, in which one party (client) promises in writing to pay a determinate sum of money to the other (lender).5/39Note Example:

***The Note will always contain the original loan amount that the lien was taken out for.

**This will match up exactly with the lien amount listed on the title.6/39AbstractA brief history of the transfers of a piece of land, including all claims that could be made against it. In Atlas a packet that will contain all of the recorded documents filed on the property.(can also be titled as Search, or supporting documents in ATLAS)7/39JudgmentLegal used in the context of legal trial, to refer to a final finding, statement, or ruling, based on a considered weighing of evidence, called "adjudication". See spelling note for further explanation.

8/39Tax LienA tax lien is a lien imposed by law upon a property to secure the payment of taxes. A tax lien may be imposed for delinquent taxes owed on real property or personal property, or as a result of failure to pay income taxes or other taxes.

9/39vestingIn law, vesting is to give an immediately secured right of present or future enjoyment. One has a vested right to an asset that cannot be taken away by any third party, even though one may not yet possess the asset. When the right, interest, or title to the present or future possession of a legal estate can be transferred to any other party, it is termed a vested interest. 10/39Warranty deedA general warranty deed is a type of deed where the grantor (seller) guarantees that he or she holds clear title (no liens on it) to a piece of real estate and has a right to sell it to the grantee (buyer). The guarantee is not limited to the time the grantor owned the propertyit extends back to the property's origins.

11/39Grant deedA grant deed is used in some states and jurisdictions for the sale or other transfer of real property from one person or entity to another person or entity. Each party transferring an interest in the property, or "grantor", is required to sign it.

12/39Quitclaim deedA quitclaim deed (sometimes erroneously referred to as a "quick-claim" deed) is a legal instrument by which the owner of a piece of real property, called the grantor, transfers his or her interest to a recipient, called the grantee.[1] The owner/grantor terminates (quits) his or her right and claim to the property, thereby allowing claim to transfer to the recipient/grantee.13/39Divorce decreeYour final decree of divorce is the courts formal order granting a termination of your marriage. If your case goes to trial and the judge issues a judgment, the judgment is confirmed when the decree is signed and dated by the judge and court clerk.

14/39Fixed/adjustable rate riderAn adjustable rate rider is a document executed with a mortgage that allows the lender to increase the interest rate after an initial period such as 24 months. At that time there is a substantial increase in the interest rate that results in a substantial increase in the monthly payments.

15/39Deed of trust statesAlaska, Arizona, California, Colorado, Idaho, Maryland, Mississippi, Missouri, Montana, Nebraska, Nevada, New Mexico, North Carolina, Oregon, Tennessee, Texas, Utah, Virginia, Washington, West Virginia, and the District of Columbia

16/39Security deed statesGeorgia and Connecticut

17/39All other states useMortgages!18/39