Ingress: A right to enter upon and pass through land.
Interest Rate: The percentage of an amount of money which is paid for its use for a specified time. Usually expressed as an annual percentage.
Interest Rate Cap: The maximum interest rate increase of an Adjustable Mortgage Loan. For example: a 12% loan with a 5% interest rate cap would have maximum interest for the life of the loan which would not exceed 17%.
Involuntary Conveyance: A transfer of real property without the consent of the owner, such as by a divorce decree, by condemnation, etc.
Judgment: The decision of a court of law. Money judgments, when recorded, become a lien on real property of the defendant.
Judgment Lien: A lien against the property of a judgment debtor. An involuntary lien.
Jurat: The certificate of an officer before whom a writing was sworn to, such as a notary public.
Land Contract: An installment contract for the sale of land. The seller (vendor) has legal title until paid in full. The buyer (vendee) has equitable title during the contract term.
Landlocked Parcel: A parcel of land surrounded entirely by privately owned land, with no access to the public right of way (road). Condemnation for a limited access highway is a major cause of such parcels.
Late Charge: A penalty for failure to pay an installment payment on time. Usually not allowed as interest for tax deductions. May or may not be included as usury.
Lease: An agreement, by which an owner of real property (lessor) gives the right of possession to another (lessee), for a specified period of time (term) and for a specified consideration (rent),
Lease with Option to Purchase: A lease under which the lessee has the right to purchase the property. The price and terms of the purchase must be set forth for the option to be valid. The option may run for the length of the lease or only for a portion of the lease period.
Leasehold Interest: The interest which the lessee has in the value of the lease itself in condemnation proceedings to determination. The difference between the total remaining rent under the lease and the rent lessee would currently pay for similar space for the same time period.
Lease Purchase Agreement: See Lease with Option to Purchase.
Legal Description: A method of geographically identifying a parcel of land, which is acceptable in a court of law.
Legal Notice: The notice required by law in a particular case. May be actual notice, constructive notice, etc.
Letter of Credit: A letter, usually from a bank, requesting a person or company to extend credit to a certain person or company and guarantying payment. Most commonly used in the purchase of goods from another country. The letter may be revocable or irrevocable, but most parties insist on the irrevocable.
Letter of Intent: A formal method of stating that a prospective developer, buyer, or lessee, is interested in property. Not an offer and creates no obligation. However, a builder who wants to build an office building, for example, may influence a lender by showing letters of intent from major prospective tenants.
Liable: Obligated, responsible.
Lien: An encumbrance against property for money, either voluntary or involuntary. All liens are encumbrances but all encumbrances are not liens.
Lien Waiver: For our purposes, a waiver of mechanic's lien rights, signed by subcontractors so that the owner or general contractor can receive a draw on construction loan.
Life Estate: An estate in real property for the life of a living person. The estate then reverts back to the grantor or on to a third party.
Loan Origination Fee: A one time set up fee charged by the lender.
Loan Policy: A title insurance policy insuring a mortgagee, or beneficiary under a deed of trust, against loss caused by invalid title in the borrower, or loss of priority of the mortgage or deed of trust.
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, are set by statute.
Loss Payable Clause: A clause in a fire 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.
Majority: The age at which a person is no longer a minor, and is legally entitled to contract and enjoy civic rights, such as voting.
Market Value: The highest price a willing buyer would pay and a willing seller accept, both being fully informed, and the property exposed for a reasonable period of time. The market value may be different from the price a property can actually be sold for at a given time.
Marketability: Salability. The probability of selling property at a specific time, price, and terms.
Marketable Title: Title which can be readily marketed (sold) to a reasonably prudent purchaser aware of the facts and their legal meaning concerning liens and encumbrances.
Mechanic's Lien: A lien created by statute for the purpose of securing priority of payment for the price or value of work performed and materials furnished in construction or repair of improvements to land, and which attaches to the land as well as the improvements.
Mortgage: To hypothecate as security, real property for the payment of a debt. The borrower retains possession and use of the property.
Mortgage Broker: One, who for a fee, brings together a borrower and lender, and handles the necessary applications for the borrower to obtain a loan against real property by giving a mortgage or deed of trust as security.
Mortgage Servicing: Controlling the necessary duties of a mortgagee, such as collecting payments, releasing the lien upon payment in full, foreclosing if in default, and making sure the taxes are paid, insurance is in force, etc. Servicing may be done by the lender or a company acting for the lender, for a servicing fee.
Mortgagee: The party lending the money and receiving the mortgage. Some states treat the mortgagee as the "legal" owner, entitled to rents from the property. Other states treat the mortgagee as a secured creditor, the mortgagor being the owner. The latter is the more modern and accepted view.
Mortgagor: The party who borrows the money and gives the mortgage.
Notary: One who is authorized by the state or federal government, to administer oaths, and to attest to the authenticity of signatures.
Note: A unilateral agreement containing an express and absolute promise of the signer to pay to a named person, or order, or bearer, a definite sum of money at a specified date or on demand. Usually provides for interest and, concerning real property, is secured by a mortgage or trust deed.
Occupancy: With reference to land, the word has become synonymous with possession.
Oil & Gas Leases: A lease giving the lessee the right to extract oil and gas from land. More like a mining lease than a land lease, in that the lessee has an ownership interest in a portion of the property (the oil and gas) rather than just the use of the property. The lessor is generally paid based on the oil and gas taken.
Open End Mortgage: A mortgage permitting the mortgagor to borrow additional money under the same mortgage, with certain conditions, usually as to the assets of the mortgage.
Owner's Policy: Title insurance for the owner of property, rather than a lienholder.
Power of Attorney: An authority by which one person (principal) enables another (attorney in fact) to act for him.
Prepaid Interest: Interest paid before coming due.
Prepayment Penalty: A penalty under a note, mortgage, or deed penalty, either in full or in part.
Private Mortgage Insurance (PMI): Insurance against a loss by a lender in the event of default by a borrower (mortgagor). The insurance is similar to insurance by a governmental agency such as FHA, except that it is issued by a private insurance company.
Probate: Originally, the proving that a will was valid. Modernly, any action over which probate court has jurisdiction.
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.
PUD: Planned Unit Development, A subdivision of five or more individually owned lots with one or more other parcels owned in common or with reciprocal rights in one or more other parcels. The lots are generally small, being the exact size of the improvements, or slightly larger.
Purchase Money Mortgage: A mortgage given from buyer to seller to secure all or a portion of the purchase price. Any mortgage from which the funds are used to purchase the property.
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