Quitclaim Deed
A deed operating as a release; intended to pass any title, interest or claim that the grantor may have in the property, but not containing any warranty that such title is valid, nor containing any warranty or covenants for title.
Rebuild Letter
A letter provided by the appropriate municipality, stating a structure on a specific property can be rebuilt as originally constructed in the case of damage or destruction.
Recision
The cancellation of a contract. With respect to mortgage refinancing, the law that gives the homeowner three days to cancel a contract in some cases once it is signed if the transaction uses equity in the home as security.
Reconveyance (RECON)
An instrument used to transfer title from a trustee to the property owner when title is held as security for a debt. Most commonly used upon payment in full of a mortgage or trust deed.
Recording
The act of recording a document such as a deed or mortgage in a public registry thereby giving notice to future purchasers, creditors or other interested parties. Recording is controlled by statute and usually requires the witnessing and notarizing of an instrument to be recorded.
Refinance
Obtaining a new mortgage loan on a property already owned. Often to replace existing loans on the property.
Rescind
To void or cancel in such a way as to treat the contract, or other object of the rescission, as if it never existed.
RESPA
Short for the Real Estate Settlement Procedures Act. RESPA is a federal law that allows consumers to review information on known or estimated settlement costs.
Reverse Annuity Mortgage (RAM)
A form of mortgage in which the lender makes periodic payments to the borrower using the borrower’s equity in the home as Satisfaction of Mortgage: The document issued by the mortgagee when the mortgage loan is paid in full. Also called a “release of mortgage.
Rural
A term used to describe a property’s location. For example, rural properties are in remote locations, on non-paved roads, or streets with support services more than 10 miles away. Rural is also a term used to describe areas that are not within a city.
Second Mortgage
A mortgage made subsequent to another mortgage and subordinate to the first one.
Section 32
A section of the Federal Truth-in-Lending Act pertaining to high fee loans and the restrictions and compliance issues with which this type of loan transaction must comply.
Simple Interest
Interest which is computed only on the principle balance.
Single Family Residence (SFR)
A standard home with no common areas, no homeowners’ dues or sharing of common walls. A home intended to be occupied by 1 family.
Sole Proprietorship
Ownership of a business, with no formal entity as a vehicle or structure. The sole proprietorship reports its tax information on Federal tax form 1040.
Subordinate
A lien taking a legal title position junior to another lien that recorded later. For example, if a mortgage lien is recorded in 1996, it can subordinate to a lien recorded in 1999. Subordination may apply not only to mortgages, but also to leases, real estate rights and any other type of debt instruments.
Subordination Agreement
An agreement by which a lien holder agrees to accept a lien position junior to that of a later-recorded lien. For example, when a lien holder agrees to subordinate, a formal agreement must be drawn, signed and recorded to make it a legal transaction. Subordinations may apply not only to mortgages, but also to leases, real estate rights and any other types of debt interests.
Suburban
The area around a city. Usually residential with some small businesses.
Supplemental Taxes
Additional taxes assessed by the city and/or county on property. These taxes are in addition to any taxes impounded in an escrow account.
Sweat Equity
Equity created by a purchaser performing work on a property being purchased.
Tax Lien
A lien for outstanding or delinquent property, IRS or state taxes. Tax liens for delinquent property taxes are the most common and attach only to the property upon which the taxes are unpaid. Property tax liens always take priority over other liens.
Temporary Disability Award Letter
A letter issued to employees who are awarded temporary disability benefits because they are unable to work due to medical disability. These employees are expected to return to work once their disability heals
Tenancy by the Entirety
A form of ownership by husband and wife whereby each holds title to the entire property with right of survivorship. In the event of the death of one, the survivor takes the entire property to the exclusion of the deceased’s heirs.
Tenancy in Common
A form of holding title in which the property is owned by 2 or more persons whereby each tenant holds an undivided interest in the property and no right of survivorship.
Title
A document that gives evidence of an individual’s ownership of property.
Title Commitment
A written report showing all current claims against a property before a sale or loan transaction. After completion of the transaction, a title insurance policy is issued.
Title Insurance
A policy, usually issued by a title insurance company, which insures a home buyer against errors in the title search. The cost of the policy is usually a function of the value of the property, and is often borne by the purchaser and/or seller. Policies are also available to protect the lender’s interests.
Tradeline
Credit items reported on a credit report.
Trust Deed
An instrument used in many states in place of a mortgage. Grants an interest in the property as collateral for a loan and, when recorded with the county, creates a lien having priority over later-filed mortgages or trust deeds.
Truth-In Lending
A federal law requiring disclosure of the Annual Percentage Rate to home buyers shortly after they apply for the loan. Also known as Regulation Z.
Underwriting
The decision whether to make a loan to a potential home buyer based on credit, employment, assets, and other factors, and the matching of this risk to an appropriate rate and term or loan amount.
Unemployment Compensation Award Letter
A letter issued to employees who are awarded unemployment benefits when their employment is terminated through no fault of their own. The benefits they receive are called unemployment compensation.
Uniform Residential Appraisal Report (URAR)
The most common appraisal form in use. The URAR is used to document the methods used to determine the market value of single-family residences and planned unit developments.
Urban
A term used to describe a property’s location. Urban properties have paved access roads and streets; they are close to neighboring properties and have support services less than 10 miles away. Urban is also a term used to describe a property located in a city or town.
Vacancy Factor
A multiple by which gross monthly rental income is multiplied. The vacancy factor reduces the owner’s monthly rental income to allow for months when units are vacant and the owner is not receiving full rental income.
VA Loan
A long-term, low-or no-down payment loan guaranteed by the Department of Veterans Affairs. Restricted to individuals qualified by military service or other entitlements.
Variable Interest Rate
An interest rate that fluctuates as a result of changes in a controlling index rate. With adjustable-rate mortgages, there are usually maximums as to the frequency and amount of fluctuation.
Verification of Deposit (VOD)
A document signed by the borrower’s financial institution verifying the status and balance of his/her financial accounts.
Verification of Employment (VOE)
A document signed by the borrower’s employer verifying his/her position and salary.
Verification of Mortgage (VOM)
Documentation that establishes the customer’s mortgage payment history.
VOR
Acronym for Verification of Rent.
Warranty Deed
A deed used in many states to convey fee title to real property. A deed in which the grantor or seller warrants or guarantees good title is being conveyed as opposed to a quitclaim deed that contains no representation or warranty as to the quality of title being conveyed.
Wholesale Lender
A lender who works only with mortgage brokers and takes completed loan packages and underwrites them. They offer mortgage brokers discounted pricing in return for the up-front work done by the mortgage broker.
Zoning
The division of a city or county by legislative regulations into areas specifying the permitted uses allowable for the real property in these areas.