Utah Real Estate

Real Estate Terms

Real Estate Terms can be confusing, there are so many terms, below is a list of common Real Estate terms and their definitions.

ACCELERATION CLAUSE A provision in a mortgage that gives the lender the right to demand payment of the entire principal balance if a monthly payment is missed.

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

ADDITIONAL PRINCIPLE PAYMENT A payment by a borrower of more than the scheduled principal amount due in order to reduce the remaining balance on the loan.

ADJUSTED BASIS The original cost of a property plus the value of any capital expenditures for improvements to the property minus any depreciation taken.

ADMINISTRATOR A person appointed by a probate court to administer the estate of a person who died intestate.

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-made amenities include swimming pools, tennis courts, community buildings and other recreational facilities.

APPRECIATION An increase in the value of a property due to changes in market conditions or other causes. The opposite of depreciation.

ASSESSED VALUE The valuation placed on property by a public tax assessor for purposes of taxation.

ASSESSMENT 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.

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).

ASSIGNMENT The transfer of a mortgage from one person to another.

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 mortgage from the seller. The loan does not need to be paid in full by the original borrower upon sale or transfer of the property.

ATTORNEY-IN-FACT One who holds a power of attorney from another to execute documents on behalf of the grantor of the power.

BENEFICIARY The person designated to receive the income from a trust, estate or a deed of trust.

BEQUEATH To transfer personal property through a will.

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

BILL OF SALE A written document that transfers title to personal property.

BINDER A preliminary agreement, secured by the payment of an earnest money deposit, under which a buyer offers to purchase real estate.

BLANKET INSURANCE POLICY A single policy that covers more than one piece of property (or more than one person).

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

BONA FIDE In good faith, without fraud.

BREACH A violation of any legal obligation.

BROKER A person who, for a commission or a fee, brings parties together and assists in negotiating contracts between them.

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.

BUILDING CODE Local regulations that control design, construction and materials used in construction. Building codes are based on safety and health standards.

CAPITAL EXPENDITURE The cost of an improvement made to extend the useful life of a property or to add to its value.

CAPITAL IMPROVEMENT Any structure or component erected as a permanent improvement to real property that adds to its value and useful life.

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 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.

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.

CHATTEL Another name for personal property.

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

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 buyer.

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.

CLOSING COSTS 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 (See HUD-1 statement)

CLOUD ON 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.

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 loss.

COINSURANCE CLAUSE 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 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.

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

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)

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.

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 LAW An unwritten body of law based on general custom in England and used to an extent in the United States.

COMMUNITY PROPERTY 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.

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.

CONDEMNATION 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.

CONDOMINIUM 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 areas.

CONDOMINIUM CONVERSION Changing the ownership of an existing building (usually a rental project) to the condominium form of ownership.

CONTINGENCY 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.

CONTRACT An oral or written agreement to do or not to do a certain thing.

COOPERATIVE (CO-OP) 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.

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

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 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.

CREDITOR A person to whom money is owed.

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.

CREDIT REPORTING AGENCY ( or BEAUREAU) 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.

DEED The legal document conveying title to a property.

DEED-IN-LIEU A deed given by a mortgagor to the mortgagee to satisfy a debt and avoid foreclosure. Also called a "voluntary conveyance."

DEED OF TRUST The document used in some states instead of a mortgage; title is conveyed to a trustee.

DEFAULT Failure to make mortgage payments on a timely basis or to comply with other requirements of a mortgage.

DEPRECIATION A decline in the value of property; the opposite of appreciation.

DISCOUNT POINTS (See point)

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

DOWN PAYMENT The part of the purchase price of a property that the buyer pays in cash and does not finance with a mortgage.

DUE-ON-SALE-CLAUSE 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-CLAUSE This terminology is usually used for second mortgages. See due-on-sale clause.

EARNEST MONEY DEPOSIT A deposit made by the potential home buyer to show that he or she is serious about buying the house.

EASEMENT A right of way giving persons other than the owner access to or over a property.

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.

EMINENT DOMAIN 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.

ENCROACHMENT An improvement that intrudes illegally on another's property.

ENCUMBRANCE Anything that affects or limits the fee simple title to a property, such as mortgages, leases, easements or restrictions.

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

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.

EQUITY 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 mortgage.

ESCROW 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 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 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.

ESTATE 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.

EVICTION The lawful expulsion of an occupant from real property.

EXAMINATION OF TITLE The report on the title of a property from the public records or an abstract of the title.

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.

EXECUTOR 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 form.

FAIR MARKET VALUE 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.

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.

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 www.homepath.com.

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.

FEE SIMPLE The greatest possible interest a person can have in real estate.

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.

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

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.

FIXTURE Personal property that becomes real property when attached in a permanent manner to real estate.

FORECLOSURE 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.

GRANTEE The person to whom an interest in real property is conveyed.

GRANTOR The person conveying an interest in real property.

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.

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.

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.

HOMEOWNERS INSURANCE An insurance policy that combines personal liability insurance and hazard insurance coverage for a dwelling and its contents.

HOMEOWNERS 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.

HOUSING EXPENSE RATION The percentage of gross monthly income that goes toward paying housing expenses.

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."

INCOME PROPERTY Real estate developed or improved to produce income.

INLFATION 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.

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.

INVESTMENT PROPERTY A property that is not occupied by the owner.

JOINT TENANCY A form of co-ownership that gives each tenant equal interest and equal rights in the property, including the right of survivorship.

JUDGEMENT 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.

JUDGEMENT LEIN 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.

LEASE 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.

LEGAL DESCRIPTION A property description, recognized by law, that is sufficient to locate and identify the property without oral testimony.

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.

LIEN A legal claim against a property that must be paid off when the property is sold.

LIQUID ASSET A cash asset or an asset that is easily converted into cash.

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.

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.

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

NET WORTH The value of all of a person's assets, including cash, minus all liabilities.

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

NOTICE OF DEFAULT A formal written notice to a borrower that a default has occurred and that legal action may be taken.

OWNER FINANCING A property purchase transaction in which the property seller provides all or part of the financing.

PERSONAL PROPERTY Any property that is not real property.

POINT A one-time charge by the lender for originating a loan. A point is 1 percent of the amount of the mortgage.

POWER OF ATTORNEY A legal document authorizing one person to act on behalf of another. The most common type POW is a "specific" power of attorney delegated when one spouse can not be present at the document signing.

PROMISSORY NOTE A written promise to repay a specified amount over a specified period of time.

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.

PURCHASE AND SALE AGREEMENT A written contract signed by the buyer and seller stating the terms and conditions under which a property will be sold.

PURCHASE MONEY TRANSACTION The acquisition of property through the payment of money or its equivalent.

QUITCLAIM DEED A deed that transfers without warranty whatever interest or title a grantor may have at the time the conveyance is made.

RADON A radioactive gas found in some homes that in sufficient concentrations can cause health problems.

REAL ESTATE AGENT A person licensed to negotiate and transact the sale of real estate on behalf of the property owner.

REAL PROPERTY Land and appurtenances, including anything of a permanent nature such as structures, trees, minerals and the interest, benefits and inherent rights thereof.

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®.

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.

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 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.

RENT WITH OPTION TO BUY See lease-purchase mortgage loan.

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.

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 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.

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.

SECONDARY MORTGAGE MARKET The buying and selling of existing mortgages.

SECURED LOAN A loan that is backed by collateral.

SECURITY The property that will be pledged as collateral for a loan.

SELLER TAKE-BACK An agreement in which the owner of a property provides financing, often in combination with an assumable mortgage. See owner financing.

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.

SETTLEMENT (See closing)

SETTLEMENT SHEET (See HUD-1 statement)

SUBORDINATE FINANCING Any mortgage or other lien that has a priority that is lower than that of the first mortgage.

SURVEY 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.

SWEAT EQUITY Contribution to the construction or rehabilitation of a property in the form of labor or services rather than cash.

TENANCY BY THE ENTIRETY 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 common.

TENANCY IN COMMON A type of joint tenancy in a property without right of survivorship. Contrast with tenancy by the entirety and with joint tenancy.

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.

TITLE 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 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 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 outstanding.

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.

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 State or local tax payable when title passes from one owner to another.

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.

TRUSTEE A fiduciary who holds or controls property for the benefit of another.

UNSECURED LOAN A loan that is not backed by collateral. .

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.

VETERANS AFFAIRS, DEPARTMENT OF (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 veterans.

WRAP AROUND 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.