Ten Four USA




ABSTRACT OF TITLE - A condensed history or summary of the title to a parcel of real estate.

ACCELERATION CLAUSE - A clause in the mortgage which provides that in the event of default or sale of property, or other cause, by the borrower, the entire balance of the obligation shall become due and payable at once.

ACKNOWLEDGMENT - A formal declaration before a duly authorized person, such as a notary public, to the effect that the person executing the instrument is performing his free act and deed and that the signature is genuine.

ADDITIONAL ADVANCE - A future loan or advance of funds made under the open-end provision of a mortgage which is secured by the lien of that same mortgage.

AFFIDAVIT - A sworn statement in writing before an official, usually a notary.

AMENITY - The real or perceived qualities or benefits of a property which make it more desirable.

AMORTIZATION - The repayment of the principal of a loan in periodic installments (usually monthly) over the length of the loan term; payments usually include principal and interest.

APPLICANT - One who applies for a real estate loan (the prospective mortgagor).

APPLICATION - A form used to record pertinent information concerning a prospective mortgagor and the proposed security.

APPRAISAL - The valuation of real estate by a professional based on knowledge of real estate prices and local markets.

APPRECIATION - Any increase in value. The opposite of depreciation.

APPURTENANCE - Anything attached to the land and thus a part of the property, such as a barn, garage, or an easement.

APR (ANNUAL PERCENTAGE RATE) - A representation of the actual finance charges associated with a loan, including interest plus the cost of loan points (charged at closing) over the life of the loan.

ARM (ADJUSTABLE RATE MORTGAGE) - A mortgage loan on which the interest rate can change on a periodic basis in response to movements of a market rate index, provided the borrower is given proper notice. Rate changes may affect the monthly payment, principal balance, maturity or a combination of these.

ASSESSMENT - The valuation of property for tax purposes; also refers to a tax levied against property for a special purpose.

ASSUMPTION OF A MORTGAGE - The agreement between buyer and seller whereby the buyer takes over personal liability for an existing mortgage debt on a property without a release of the seller's liability.

ATTACHMENT - A legal process whereby a defendant's property is seized by court order to have it available if needed to satisfy a judgment in a pending court action.



BALLOON PAYMENT LOAN - A loan made under terms not requiring full amortization of principal, but requiring a large payment (balloon) at maturity.

BASIS POINT - One hundredth of one percent (1%) of an expressed interest rate.

BLANKET MORTGAGE - One mortgage which covers more than one parcel of real estate.

BUYDOWN - An amount paid to a lender in order to reduce the mortgage rate on the loan.


CLOSING - The final settlement between a buyer and seller of real estate in which title is transferred and an accounting of funds is made by all parties to the transaction.

CLOSING COSTS - All of the costs, not including the price of the property, to the buyer and the seller which are associated with the purchase, sale, or financing of real property.

CLOSING STATEMENT (MORTGAGE LOAN, REAL ESTATE) - A written itemized accounting of income and expense funds between borrower and lender when a mortgage loan transaction is closed or completed.

COLLATERAL - Property, real or personal, pledged to secure payment of a debt.

COMMITMENT - A promise or pledge by a lender to make a loan on specified terms at a given time in the future.

COMPARABLES - Appraisal method based on comparing verified sale prices of similar nearby properties with the appraised property.

CONDITIONAL COMMITMENT  - One most often used with FHA loans on a specific property for a definite loan amount with specific terms for some future unknown purchasers of satisfactory credit standing.

CONDOMINIUM - A form of ownership of real property, title to which is vested in a particular unit in a multi-family dwelling, as well as proportionate interest in certain common areas.

CONSTRUCTION LOAN - A mortgage loan to finance the construction of a building and other improvements on a site; loan disbursements are made in stages as the construction progresses.

CONTRACT FOR DEED - A form of land contract in which the conveying of title is deferred until the conditions in the contract have been met by the buyer - usually the payment of a stipulated portion of the purchase price - at which time the seller will give over to the buyer a warranty deed.

CONVENTIONAL MORTGAGE - A mortgage loan not insured by FHA or guaranteed by VA.

CONVEYANCE - Transfer of title from one person to another. Also, the instrument by which the transfer is made, such as the deed.

COOPERATIVE - Ownership of a unit in a multiple unit building; the individual owns stock in the corporation which grants him a proprietary lease to his unit.

CRV - Certificate of Reasonable Value; VA's appraisal.


DEBT - An amount of money due by certain and express agreement.

DEBT SERVICE (Total) - Monthly payments for principal and interest on a mortgage loan, and also for taxes, insurance and any long term obligations.

DEED - A legal instrument conveying title to real estate.

DEED OF TRUST - A legal document conveying the title to real estate to a trustee who holds the title as security until the owner of the property has repaid a debt. Also called a Trust Deed or Trust Indenture.

DEFAULT - Failure to meet legal obligation in a contract, note, or mortgage, such as failure to make the monthly payments on a mortgage.

DELINQUENCY - Failure of the debtor to pay an obligation when due.

DEPOSIT RECEIPT - Conditional land sales contract which acknowledges payment of a deposit and describes the terms and conditions of the sale.

DEPRECIATION - Loss of value in real estate from any cause; usually due to physical deterioration or functional and/or economic obsolescence.

DISCOUNT - The fee or interest deducted from a loan at the time it is made or sold; the difference between the principal amount of the loan and the actual amount loaned, expressed as a percentage of par value. Discounts are commonly used with FHA and VA mortgages to adjust their fixed interest rates to the current market rate.

DISINTERMEDIATION - The shifting of funds from deposits at financial institutions to direct investments such as government securities, stocks and bonds.


EASEMENT - A right acquired by the owner of one parcel of land to use the land of another for a special purpose.

E.C.O.A. - Equal Credit Opportunity Act; insures non-discrimination in lending.

ECONOMIC LIFE - The estimated period of time during which a property is profitably utilized.

ECONOMIC OBSOLESCENCE - A loss in value caused by factors external to the property, such as heavy vehicular traffic or incompatible land uses.

EMINENT DOMAIN - The right of government to acquire private property for public use upon payment of just compensation.

ENCROACHMENT - An improvement which extends beyond the property line and intrudes upon the property of another person.

ENCUMBRANCE - A lien or claim upon title to real estate, such as a mortgage or easement.

ENTITLEMENT - The insurance or guarantee benefit available to a qualified veteran.

EQUITY - The difference between the market value of the property and the mortgage amount and other liens against it.

ESCROW - Monies and instruments delivered to a third person to be held in trust for a specified use and under stipulated conditions.

ESCROW ACCOUNT - An account set up by the lender into which the borrower makes periodic payments, usually monthly, for taxes, hazard insurance, assessments, and FHA mortgage insurance premiums. The funds are held in trust by the lender who pays the sums as they become due. Also known as an Impound Account.

ESCROW PAYMENT - That portion of a mortgagor's monthly payments held in trust by the lender to pay for taxes, hazard insurance, mortgage insurance, lease payments and other items as they become due.

ESTOPPEL LETTER - Payoff statement for existing mortgages.

EQUITY LOAN - Any loan that is based upon the homeowner's equity in his house, usually a second or third mortgage.


FHA - Federal Housing Administration. A division of the Department of Housing and Urban Development. Its main activity is the insuring of residential mortgage loans made by private lenders.

FHA MORTGAGE - A loan that is insured by the Federal Housing Administration.

FHLBB - Federal Home Loan Bank Board. An independent federal agency responsible for the operations of the Federal Home Loan Banks as well as for chartering, insuring and regulating members of the Federal Home Loan Bank system.

FHLMC - Federal Home Loan Mortgage Corporation (popularly known as The Mortgage Corporation). A secondary mortgage market under the Federal Home Loan Bank System; buys and sells conventional, FHA and VA mortgages.

FEDERAL NATIONAL MORTGAGE ASSOCIATION (FANNIE  MAE) - A private corporation under Federal charter responsible for making a secondary market in residential mortgages.

FEDERAL SAVINGS AND LOAN INSURANCE CORPORATION (FSLIC) - A government corporation that insures deposit accounts in Federal and other participating savings and loan associations up to $100,000 for individual and government accounts; a unit of the Federal Home Loan Bank Board.

FEE SIMPLE - The largest estate or interest in real estate; owner has all rights in the property and there are no limitations on heirs. Also, known as fee and fee simple absolute estate.

FIRM COMMITMENT - A promise by an investor to purchase a specified mortgage loan; also a commitment by FHA or VA to insure or guarantee a loan on a specific property and borrower

FLOOD INSURANCE - Insurance over and above normal hazard insurance to cover damage caused by rising water. (Many areas of South Florida are designated as flood prone areas by the Federal government, and flood insurance is required to obtain home financing from Federally regulated lending institutions).

FORECLOSURE - A legal process whereby property pledged as security for a debt is sold, in the event of default, to pay the debt; the property is usually sold at public auction by an officer of the court, such as the sheriff.

FUNCTIONAL OBSOLESCENCE - Decline in the value of property due to changes in style, design, technology, floor plan, and the like; the building is no longer adequately able to perform its intended function.


GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (GINNIE MAE) - A government corporation providing a secondary market for FHA-insured and VA-guaranteed mortgages and guaranteeing securities backed by pools of these mortgages.

GRACE PERIOD - Time after which a loan payment is due in which the lender makes no charge or penalty.

GROSS INCOME - Total income from a property before deduction for expenses and debt service.

GUARANTY - A promise by one party to pay a debt or perform an obligation contracted for by another in the event that the original obligor fails to pay or perform as contracted.


HAZARD INSURANCE - A form of insurance whereby the insurance company protects the insured from specified losses, such as fire, windstorm, and the like.

HIGHEST AND BEST USE - That use of property which will produce the most profitable use of the site under existing legal and zoning restrictions.

HOMESTEAD - Real estate occupied by the owner as a home and used as his primary residence.

HUD - The Department of Housing and Urban Development. It is responsible for the administration and implementation of government housing and urban development programs.


IMPOUNDS - That portion of a mortgagor's monthly payments held in trust by the lender to pay for taxes, hazard insurance, mortgage insurance, lease payments and other items as they become due, Also known as escrow payments.

INCOME PROPERTY - Property which produces money income to its owner.

INSTRUMENT - A written document that gives formal expression to a legal agreement.

INSURABLE VALUE - The amount of insurance which may be carried on destructible portions of a property to indemnify the owner in the event of loss.

INSURED LOAN - A loan insured by FHA insurance, VA guarantee or a private mortgage insurance company.


JUDGMENT - A decree of a court. In practice this is the lien upon the lands of the debtor resulting from the court's award to a creditor.

JUNIOR MORTGAGE - A lien subordinate to a prior mortgage.


LAND ACQUISITION AND DEVELOPMENT LOAN - Used by developers to acquire and/or develop raw land into finished lots. Typical improvements include streets, water, sewer, drainage, electricity and telephone service. May be combined with construction loans for houses or apartments.

LATE CHARGE - An additional charge or penalty the lender imposes on a borrower who fails to make a payment when due.

LEASE - A contract by which the possession and use of land and buildings is given to another party for a period of time and at a specified rent.

LEASEHOLD - The interest or estate of the lessee under a lease.

LEGAL DESCRIPTION - A property description recognized by law, which is sufficient to locate and identify a property without oral testimony.

LIEN - A legal hold or claim which one person has upon the property of another as security for some debt or charge. The right given by law to satisfy debt.

LIQUIDITY - The ability of a person or institution to convert assets into cash quickly, usually with a minimum of loss.

LOAN-TO-VALUE RATIO - The relationship between the amount of the mortgage loan and the appraised value of the security, expressed as a percentage of the appraised value.


MARKET VALUE - The highest price which property will bring if exposed for sale in the open market, allowing reasonable time to find a knowledgeable purchaser.

MECHANIC'S LIEN - A lien created by statute in favor of persons who have performed work or furnished materials for the erection or repair of building.

MIL - The measure used to specify property tax rates; a mil is one tenth of one cent, or one dollar per $1,000 of assessed valuation.

MIP - Mortgage Insurance Premium. The consideration paid by the mortgagor for mortgage insurance, wither to FHA or a private mortgage insurance (PMI) company.

MORATORIUM - A temporary suspension by the lender of the enforcement of a borrower's debt.

MORTGAGE - A conveyance of an interest in real property given as security for the payment of a debt.

MORTGAGE NOTE - A written promise to pay a specific sum of money at a specific interest rate within a specified term, secured by a mortgage.

MORTGAGEE - The lender under a mortgage.

MORTGAGOR - The borrower under a mortgage.


NEGATIVE AMORTIZATION - This occurs when an adjustable rate mortgage payment is no longer sufficient to pay the principal and interest. The short fall (unpaid interest) is added to the outstanding principal balance.


OBSOLESCENCE - Loss of value due to changes in demand for a property when its usefulness and desirability are impaired when contrasted with modern properties.

OPEN-END MORTGAGE - A mortgage with a provision that the outstanding loan amount may be increased upon mutual agreement of the lender and the borrower.

ORIGINATION FEE - The initial fee charged by a mortgage lender in originating and processing a loan.


PERMANENT BUYDOWN - Method used by an individual (buyer, seller, etc.) to reduce monthly payments for a home mortgage. Note rate is bought down by adding more discount points to lower effective interest rate for the term of the mortgage. Also known as a discount buy-down.

PERMANENT FINANCING - A long-term mortgage loan

PHYSICAL DETERIORATION - Depreciation of property due to wear and tear and the action of the elements.

PITI - Principal, Interest, Taxes, and Insurance.

PLANNED UNIT DEVELOPMENT (PUD) - A planned combination of various land uses in one location, such as residential, non residential and open space. Usually has some common areas of ownership.

PLAT - A map or plan of a given area of land, such as a subdivision.

PLAT BOOK - Books in the court house which are a public record of the recorded plats for a given county or area.

POINTS - Amount deducted from loan proceeds at closing to increase the lender's yield on the mortgage above the contract rate. An adjustment of the interest rate on a mortgage loan rather than a fee for services. Also the amount of discount on a government loan. Usually expressed as a percentage.

PREPAYMENT - A privilege in a note, bond, or mortgage permitting the borrower to make payments in advance of their due date.

PREPAYMENT PENALTY - A penalty sometimes charged by the lender for payment of a debt before it becomes due.

PRIMARY MARKET - The market in which mortgage loans are originated.

PRINCIPAL - The amount of the mortgage debt, exclusive of interest.

PRIVATE MORTGAGE INSURANCE (PMI) - Insurance issued, by a private company, to a lender to protect the lender against loss on high loan-to-value mortgages, such as 90-95 percent loans.

PURCHASE MONEY SECOND MORTGAGE - A second mortgage given in partial payment of the purchase price by the seller or another lender so the buyer can assume the seller's first mortgage.


QUIT CLAIM DEED - A deed to release any interest a person may have in a property; contains no warranties.


REAL PROPERTY - Land and all the improvements permanently affixed to the land.

REALTOR - A real estate broker or an associate holding active membership in a local real estate board affiliated with the National Association of Realtors.

RECEIVER - A person appointed by the court to manage a property being foreclosed.

RECORD - To place an instrument on the public records.

RECOURSE - The right to claim or require performance of an obligation against a prior owner or holder of an instrument.

REFINANCING - The payment of a debt with monies obtained through a new obligation.

REPLACEMENT COST - The current cost of producing a similar, but not identical, housing unit.

RESPA - Real Estate Settlement Procedures Act. Provides for advance disclosure to home buyers of settlement costs and limits amounts required for escrow accounts.

RIGHT OF RESCISSION - The statutory right of a borrower (on some types of loans), under the truth-in-lending law, to rescind a transaction within a period of three days after its completion.


SALES CONTRACT - Legal document containing terms of an agreement between buyer and seller.

SATISFACTION OF MORTGAGE - Settlement in full of a mortgage debt; lender gives satisfaction instrument which is recorded.

SECOND MORTGAGE - A mortgage whose claim is subordinate to a first mortgage.


SECONDARY MORTGAGE MARKET - The market in which existing mortgages are bought and sold.

SECURITY - Property given or pledged to secure a debt, such as real estate used as collateral for a mortgage debt.

SERVICING - All the steps and operations a lender performs to keep a  loan in good standing, such as collection of payments, payment of taxes, insurance, property inspection, and the like.

SINGLE-FAMILY PROPERTY - A property intended for ownership and occupancy by one family. Usually a detached residence but may be a townhouse or individual condominium unit.

SPECIAL ASSESSMENT - A charge levied against a property by government to finance improvements which benefit the property, such as street pavement or a sewer line.

SPOT LOANS - Single-family loans solicited on an individual basis.

SPOT SURVEY - A drawing by a land engineer which shows the exact dimensions of the land and the angles of its boundaries and the exact placement of any improvements on the land.

STATUTE OF LIMITATIONS - A legislative act which states that a legal action may not be taken after the passage of a specified period of time.

SUBORDINATION - A lender permitting a debt due to him to be subordinated or inferior to the debt of another lender on the same property.

SURVEY - A measurement of land, prepared by a registered land surveyor, showing the location of the land with reference to known points, its dimensions, and the location and dimensions of any improvements.


TAKEOUT - The commitment issued by a permanent lender to acquire a mortgage loan from the originating lender. The permanent lender or investor agrees to make a long-term, permanent loan, the proceeds of which are used to pay off a short-term loan, such as a construction loan.

TAX LIEN - A claim against property for nonpayment of property taxes.

TEMPORARY BUYDOWN - Money advanced by an individual (builder, seller, etc.) to reduce monthly payments for a home mortgage for a specified period of time. The funds are held in a pledged account and applied to the monthly payment to reduce it to a lower effective rate without changing the note rate. Also known as an Escrow Buy-down.

TERM - The period of time between the original date of a mortgage and its maturity date.

TITLE - Evidence of ownership in property. In the case of real estate, the documentary evidence of ownership is the title deed, which specifies in whom the legal estate is vested and the history of ownership and transfers.

TITLE INSURANCE (MORTGAGE OWNERS) - Insurance which protects the lender on real estate against loss due to defects in title.

TITLE SEARCH - An analysis of all of the instruments affecting a given parcel or real estate.

TRACT LOAN - A loan made on the security of a tract of land or subdivision covering proposed construction of single family homes.

TRUTH-IN-LENDING - The Consumer Credit Protection Act of 1968 which requires lenders to disclose the costs of a loan to a borrower.



UNDERWRITING - Determining the risks in a given loan and settling loan terms.

USURY - Charging more than the legal rate for the use of money.



VA (VETERANS ADMINISTRATION) - A Federal government agency which, among other programs, administers the VA loan guaranty programs for veterans.

VA CERTIFICATE OF REASONABLE VALUE - A document issued by the VA establishing maximum value and loan amounts for a VA guaranteed mortgage.

VA LOAN - A mortgage loan made by a private lender with a portion of the loan guaranteed by the Veterans Administration; also called a G.I. Loan.



WRAP AROUND MORTGAGE - A mortgage subordinate in all cases to an existing first mortgage which remains outstanding and unsatisfied. It differs from the conventional second mortgage in that it is the face amount of the wrap-around which the holder of the wrap-around loan agrees to pay. Also, it incorporates a special agreement between the parties for payment of the debt service on the first mortgage.

WAIVER - Voluntary relinquishment of a right.

WARRANTY DEED - Grantor warrants good title and guarantees to defend it against all claimants.



YIELD - The annual earnings by an investor on a property.



ZONING ORDINANCE - Restrictions placed upon the use of real estate by a governmental body.