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Glossary T - Z

table funding:  the process of originating mortgage loans with internal resources and taking those loans and packaging them together for sale on the secondary mortgage market. 

takeout loan or financing:  a lender agreement to provide permanent financing on a construction project with specific parameters which must be met.  Some of those conditions might relate to occupancy or tenant requirements. 

taking:  the act of obtaining land through condemnation most of the time as owners are unwilling to settle for a reasonable offer for their property. 

tandem plan:  government program for low-income qualified buyers which provides low-interest-rate loans which is done by the Federal National Mortgage Asssociation (FNMA) who purchases the loans at a discount from the Government National Mortgage Association(GNMA).  By doing this, GNMA subsidizes the low-income homebuyer and thus incurs a loss on the transaction. 

tangible asset:  an asset that has a physical existence like cash, equipment or real estate. 

tangible property:  items of real estate and personal property that have a physical existence. 

tax and insurance escrow:  a fund established by the lender when required which collects the estimated tax and insurance for the debtor on a monthly basis to insure the property taxes and insurance premiums are paid for promptly and without delay. 

tax assessor:  government official who puts assessed values on real estate property for the purpose of ascertaining annual property taxes. 

tax basis:  a cost basis for an asset such as property. 

tax credit:  dollar for dollar reduction in the income tax liability. 

tax deduction:  tax breaks used to reduce the taxable income and can include mortgage interest, property taxes and loan points. 

tax deed:  document by a government entity to a grantee that has claimed property that is delinquent in their taxes. 

tax exempt property:  real estate that is not subject to ad valorem property taxes.  Churches charities and government buildings do not pay property taxes. 

tax foreclosure:  property taken over by the government for a lack of taxes which were not paid by the owner.   

tax impound:  money paid and held into an account set up by the lender which accumulates the payments for the annual tax payment. 

tax lien:  legal claim placed on a property for nonpayment of taxes. 

tax roll:  the list of all properties subject to a tax in a property taxing jurisdiction.  That will indicate the assessed values of all the properties in that jurisdiction. 

tax sale:  public sale of a property by the government agency who filed for the sale as a non-payment for back taxes. 

teaser rate:  a very low interest rate used to attract potential borrowers in an adjustable rate mortgage(ARM).  The rate will have stipulations such as duration and adjustment parameters. 

tenancy:  right of possession of real estate whether by ownership or rental.  In the case of a tenant it is the period for which they have the right of possession. 

tenancy by the entirety:  special kind of property ownership that applies only to married couples.  When one spouse dies, the surviving spouse will get title to the property.   Often times referred to as a right to survivorship. 

tenancy for life:  freehold equity in an estate restricted to the length of the life of the grantee or other stipulated person. 

tenancy in common type of ownership in which two or more people have jointly own a property without the right of survivorship.  

tenancy in severalty:  ownership of property by one person or one legal entity. 

tender:  the presentation of an item of value for another persons consideration to accept an offer. 

term:  period of time in which something is in effect.  Could be number of years.   

term loan:  a loan which requires interest only payments until the final day of the loan whereupon the balance is due. 

testate:  a person who dies and leaves a will for his or her estate. 

testator:  a man who makes a will. 

testatrix:  a woman who makes a will. 

thin market:  market in which there are comparatively few bids to buy or offers to sell real estate. 

third party:  a person not directly involved in a transaction or contract but could be affected by that transaction. 

third party originator:  a process by which a lender uses another party to completely or partially handle the origination of mortgages it plans to deliver to the secondary mortgage market. 

threat of condemnation:  situation where a representative of a governmental agency  informs either orally or in writing a property owner that a decision has been made to acquire his property and it is reasonable to assume that property will be taken which triggers the condemnation. 

thrift institution:  an institution that originates and can also service mortgage loans primarily for consumers and can include both savings banks, mortgage banks and savings and loan institutions. 

tight market:  market condition where the difference between the asking and offer prices for real estate are very minimal. 

title:  legal document that established ownership of a piece of real estate. 

title company:  a company that provides title insurance policies which insure clear title once it completes its search for liens. 

title defect:  circumstance or any unresolved claims which might challenge the ownership of a property.  Many times these are easily resolved but can go back a long time. 

title examination:  the actual process of checking public records by the title company to determine legal ownership of a property and the absence of claims or liens. 

title insurance:  an insurance policy which protects a buyer from losses resulting in legal defects in the title.  There are several types of title insurance but here are the most common:

lender’s policy: (mandatory)  this protects the lender if a flaw in the title is found after the property has been purchased.

owner’s policy:  (optional)  this protects the borrower exclusively if a flaw in detected after the purchase. 

title insurance binder:  the title company will issue a written commitment to insure the property which might be subject to conditions or exclusions shown below. 

title report:  document indicating the current state of the title to the subject property such as easements, covenants, liens and any defects. 

title risk:  potential hazards which might prevent a clean transfer of title to a property. 

title search:  this is a review by a licensed title company which will check any and all records pertaining to a property sale to ensure the seller is the legal owner of the property and there are no blemishes on the title such as liens or claims. 

title theory state system in which the lender has legal title to the mortgaged property and the borrower has equitable title which is held by the borrower. At the conclusion and fulfillment of the mortgage debt, the full title goes to the borrower. 

total expense ratio:  a borrowers total obligations expressed as a ratio which is arrived at by taking the total dollar expenses and dividing by the gross monthly income. 

total lender fees:  the costs associated by a borrower which are charged by a lender to obtain the loan. 

total loan amount:  the amount of money being borrowed plus any financed closing costs. 

total monthly housing costs:  the total monthly costs which are made up by adding the principal, interest, property taxes, and insurance. 

total paid at closing:  all closing costs which also include the down payment, escrow fees and any prepaid accounts. 

tract:  a parcel of land which is generally held for subdividing and developing into residential or commercial developments. 

tract home: a mass produced house which is constructed within a project by a builder along with several other models to form a consistency of housing. 

trading down:  acquiring a house which is smaller and less expensive than a currently owned house.  Often applies to empty nesters. 

trading up:  acquiring a house which is larger and more expensive than a currently owner house. 

transaction:  the exchange of an asset for payment between a buyer and seller. 

transaction broker:  a real estate professional who helps negotiate an agreement but does not represent the buyer or seller. 

transaction costs:  any of the costs associated with the purchase or sale of real estate. 

transfer:  the process of conveying something from one entity or person to another person or entity. 

transferable development rights:  legal designation where the development potential of a site is severed from its title and made available for transfer to another location. 

transfer development rights:  a type of zoning ordinance that allows owners of property zoned for low-density development to sell or transfer development rights to other property owners. 

transfer fee:  the fee charged by a lender to either a buyer, seller or both for the transfer of a mortgage when the mortgaged property is sold. 

transfer of ownership:  the means by which the ownership of a property changes hands. 

transfer tax:  the state and or local tax which becomes payable upon the change of title from one owner to another. 

Treasury Bills:  the securities which have the full backing of the U.S. Government issued by the Treasury Department. 

Treasury Index:  one of the indices used to calculate interest rate for adjustable rate mortgages(ARM) which is tied to the Treasury Bills. 

trust:  the tax entity created by a trust agreement.  This insures the distribution of all or part of its income to designated beneficiaries as per the agreement. 

trust account:  a special account which protects the funds of a buyer or seller in a transaction. 

trust deed:  basically the conveyance of real estate to a third party which is held for the benefit of another.  This is the most common method of financing real estate purchases in California (most other states use mortgages).  

trustee:  a fiduciary who handles money or holds title to their land. 

trustee’s deed:  deed given by a trustee at a deed of trust foreclosure sale. 

trustee’s sale:  foreclosure sale which is conducted by a trustee under the conditions of a deed of trust. 

Truth in Lending Act:  federally mandated law which requires lenders to fully disclose in writing, all the terms, costs and conditions of a mortgage which also includes the calculation of the annual percentage rate(APR).  It is the responsibility of the lender to provide the borrower a copy of the Truth in Lending(TIL) within the parameters of the RESPA laws. 

turnaround property:  deteriorated property which can be acquired for a good price with the intent of restoring and reselling for a profit. 

turnkey project:  development in which a developer completes an entire project to a buyers specifications and turns the keys over to the buyer.  Basically it is referred to as turnkey because the buyer needs only turn the key and they have a functional unit which is ready for occupancy. 

two-step mortgage:  adjustable rate mortgage(ARM) with a single interest rate for the first part of the term and then another rate for the balance of the term. 

underlying mortgage:  first mortgage on a property where other mortgages will exist. 

undersupply:  the amount of real estate in demand exceeds the amount of properties available which normally will create an increase in prices. 

underwriting:  the process a lender uses to determine the risk of a loan.  The analysis involves credit worthiness and the quality of the property itself. 

underwriting fee:  the lender charged fee which is for the verification of information necessary to make a decision as to whether to approve a loan or not. 

undivided interest:  ownership by two or more people which entitles each to the right to use the entire property. 

unencumbered property:  property that is free and clear of any liens and obligations. 

Uniform Residential Appraisal Report(URAR):  this is the industry standard form that is used by appraisers for a dwelling. 

unimproved land:  raw land in its natural state free of improvements. 

unity:  that legal doctrine which is necessary for property to be owned as joint tenants. 

unity of interest:  joint tenants must acquire their interest by the same conveyance and with the same interest. 

unity of time: joint tenants must acquire their title simultaneously. 

unrecorded deed:  deed transferring ownership which is not recorded. 

unsecured loan:  any loan which is not backed by any collateral. 

unsecured note:  situation where the borrower uses his or her individual financial and credit situations as security for the loan. 

unsolicited listing:  if a real estate broker takes a listing with no effort on their part. 

U.S. Department of Agriculture(USDA) Rural Development:  a division of the USDA which provides loans, loan guarantees and grant programs to promote the quality of life in Americas rural areas. 

U.S. Department of Housing and Urban Development(HUD):  the federal agency which oversees the Federal Housing Administration(FHA) along with a number of other housing and community development programs. 

usufructuary right:  an individual’s right to utilize the property of another such as the rights afforded an easement. 

usury laws:  exceeding the maximum rate of interest allowed by laws of a state. 

VA short for the Veterans Administration.  This is the federal agency which guarantees loans made to qualified veterans on approved property. 

VA guarantee:  the VA will guarantee a percentage of a home loan with maximum limits based on the sale price of the house and the eligibility of the borrower. 

VA loan:  home loan which is made thru the Department of Veteran Affairs. 

VA mortgage:  a mortgage that is made to a qualified and eligible veteran which is guaranteed by the Department of Veterans Affairs. 

valuation:  the value of a property as reflected by an appraisal. 

value after the taking:  any value that would be left on a property after it has been condemned.   

value before the taking:  market price of all the property which is valued prior to condemnation action. 

variable interest rate:  a changing loan interest rate which is normally based on fluctuations in the rate paid for Treasury bills or c/d’s. 

variable maturity mortgage:  long-term mortgage in which the interest rate may be adjusted periodically by the lender.  Payments might remain the same but the terms might change to compensate for the adjustment. 

variable-rate mortgage:  loan with an interest rate that can change depending on the changes in the index it is based on.  See adjustable rate mortgage(ARM). 

vendee:  purchaser of real property. 

vendee’s lien:  the legal right of a vendee of real estate to the paid purchase price plus costs for the acquisition should the seller fail to surrender the deed to the property. 

vendor:  seller of real property. 

venture capital:  financing source for new businesses or ventures which have a “high-risk” and potential “high reward” possibility. 

verification of deposit(VOD):  a document which is signed by a borrower’s bank or other institution which will give a comprehensive accounting of the borrower’s account balance and history. 

verification of employment(VOE):  an employers statement which confirms a borrower’s salary and position and is a normal part of the loan process. 

view ordinance:  laws adopted by some cities or towns which have very desirable views such as those in the mountains or overlooking the ocean.  These laws protect a property owner from having his or her view obstructed by overgrowing trees and vegetation.   Many times included in the CC&R’s of a community. 

visual right:  occupant’s right of view without obstruction. 

volatile market:  a situation where short-term real estate prices can move in sudden and unpredictable ways. 

voluntary alienation:  the conveyance of title between two parties by using a deed. 

voluntary conveyance:  a deed given by a mortgagor to a mortgagee which satisfies a debt and avoids foreclosure.  Also referred to as a deed in lieu of foreclosure. 

voluntary lien:  lien given to a lender by a homeowner such as a mortgage. 

waiver:  voluntary relinquishment of a right, privilege, or claim which is usually in writing. 

waiver of lien:  voluntarily surrendering the right of a lien which is most often temporary. 

waiver of tax lien:  form signed by a taxing entity which certifies it will not file a lien against a property owner for back taxes. 

walkaway risk:    the risk that occurs when a buyer or seller decides not to proceed with a transaction.  If the property is not sold as the offered price it may not be realized at a later time. 

warehouse fee:  the cost to the lender to haol a loan temporarily before it is sold on the secondary market.   

warranted price:  the amount considered to be fair for a transaction involving real estate which is justified by the conditions which are involved in the exchange. 

warranty deed:  deed that assumes the title to a property is free of encumbrances and clear. 

weak market:  low volume of real estate transactions which is similar to a depressed market. 

without recourse:  the legal words which mean a note or bill that cannot look to the holder to personally compensate if the loan isn’t paid. 

workout:  the case where a lender loosens some of the terms of an overdue payment should a borrower run into trouble when paying back a loan.  Some of those remedies can include changing the term or the interest rate depending on the borrowers situation. 

wraparound mortgage:  a mortgage loan which includes the remaining balance of a previous first mortgage and an additional amount requested by the mortgagor. 

writ of execution:  court order which authorizes the seizure and sale of property due to nonpayment of taxes or the foreclosure of that property. 

zero net:  after a sale the net proceeds to the seller are nothing  after all outstanding expenses are paid. 

zoning:  rules and regulations which determine the use of land and property and to what end they can be used for.  Zoning can apply to commercial, industrial or residential properties.  Can also include height restrictions, noise, parking and open spaces. 

zoning variances:  modification of existing zoning laws for special circumstances.  An example would be allowing a taller than allowed building in a specific zone.