Glossary
tenancy
in common
As opposed to joint tenancy, when there are two or
more individuals on title to a piece of property,
this type of ownership does not pass ownership to
the others in the event of death.
third-party
origination
A process by which a lender uses another party to
completely or partially originate, process, underwrite,
close, fund, or package the mortgages it plans to
deliver to the secondary mortgage market.
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.
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.
transfer
tax
State or local tax payable when title passes from
one owner to another.
Treasury
index
An index that is used to determine interest rate changes
for certain adjustable-rate mortgage (ARM) plans.
It is based on the results of auctions that the U.S.
Treasury holds for its Treasury bills and securities
or is derived from the U.S. Treasury's daily yield
curve, which is based on the closing market bid yields
on actively traded Treasury securities in the over-the-counter
market.
trustee
A fiduciary who holds or controls property for the
benefit of 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.
two-step
mortgage
An adjustable-rate mortgage (ARM) that has one interest
rate for the first five or seven years of its mortgage
term and a different interest rate for the remainder
of the amortization term.
VA
mortgage
A mortgage that is guaranteed by the Department of
Veterans Affairs (VA).
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 Administration
(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.
©1996 By Leonard
Leonard & Associates, Inc. All rights reserved.
Duplication in whole or in part without permission
is prohibited.
