| Term | Definition |
| Acceleration Clause | A clause that provides the mortgagee (lender) the right to demand immediate repayment of the loan balance upon default of the mortgagor (borrower). It is also triggered by the due on sale clause (demands immediate repayment if the home is sold). |
| Adjustable Rate Mortgage (ARM) | A home loan with an interest rate that periodically adjusts to reflect changes in a specified financial index. |
| Alienation Clause | A loan provision requiring the borrower to pay the balance of the loan in a lump sum if the property is sold or transferred. |
| Amortization | The process of paying the principal and interest on a loan through regularyly scheduled payments. |
| Amortization Tables | Mathematical tables used to calculate a borrower's monthly payment. |
| Amortization Terms | The length of time required to amortize the mortgage loan expressed as a number of months. For example, 360 months is the amortization term for a 30-year fixed-rate mortgage. |
| Annual Mortgagor Statement | An annual statement to borrowers detailing the remaining principal balance and amounts paid for taxes and interest throughout the year. |
| Annuity | The payment of a fixed sum at regular intervals. |
| Assignment of Deed of Trust | A written document, that transfers the beneficial interest in a note and deed of trust from one party to another. |
| Bankruptcy | A legal proceeding which allows a debtor to discharge certain debts or obligations without paying the full amount or allows the debtor time to reorganize his/her financial affairs so he/she can fully repay his/her debts. |
| Beneficiary | The lender or their successor in interest for whose benefit a trust is created and to whom the debt is owed. |
| Breach | The failure without legal excuse to perform any promise made in a contract. A breach is stated in the notice of default. |
| Declaration of Default | A written document that instructs the trustee to prepare and record a notice of default and, if necessary, to sell the secured property in order to satisfy the unpaid obligation. |
| Deed of Trust | A written document describing the real property that is being pledged to the lender as security for the repayment of an obligation (the loan or promissory note). The Deed of Trust acts in the same capacity as a Mortgage. |
| Equity | The current market value of a home minus the outstanding mortgage(s) balance(s) (or all of the debt that is owed on the property). |
| Eviction | See "Unlawful Detainer." |
| Federal Tax Lien | An obligation to the United States government as a result of nonpayment of federal income taxes. |
| Foreclosure | A popular term used to describe the procedure followed in enforcing a creditor's rights when a devt secured by any lien on property is in default; however, the correct term for a "Foreclosure" involving a deed of trust is a "Trustee's Sale Proceeding." |
| Junior Lien | A legal claim upon real property recorded subsequent (or recorded prior but has subordinated) to another legal claim upon the same real property. |
| Mortgage | A written document describing the real property that is being pledged to the lender as security for the repayment of an obligation (the loan or promissory note). The mortgage acts in the same capacity as the Deed of Trust. |
| Note / Promissory Note | A written document, (promise to pay), that sets forth the amount of the obligation and the terms of repayment. When involving real estate, the Note is used in conjunction with a mortgage or deed of trust. |
| Notic of Trustee's Sale | A written document that sets forth the day, date and time of the trustee's sale, describes the property to be sold and gives an estimate of the unpaid debt as of the first publication debt. |
| Notice of Default | A written document that gives constructive notice of a trustor's failure to perform his obligation under a deed of trust. This document does not require the acknowledgment of a notary public and must be recorded. |
| Notice of Rescission | A written document that cancels or annuls the effect of a notice of default when a default has been cured (reinstated). |
| Promissory Note | See "Note" |
| Quitclaim Deed | A legal document which "quits" or relinquishes one's interest in a property to another party. Whereas a warranty deed will "warrant" real estate that is conveyed, a quitclaim deed does not. |
| Reversed Mortgage | A special type of loan available to equity-rich, older home owners. Repayment is not necessary until the borrower sells the property. Many downsides exist to these loans. |
| Right of Redemption | The right of a property owner to redeem his/her real estate from either foreclosure or tax sale by paying off the amount owed in a finite, given period of time. This time differs from state to state. Many states do have a right of redemption. |
| Short Sale | When the lender agrees to take less than what is owed on the promissory note as full payoff on the loan. Also referred to as a 'short pay'. |
| Title | The legal document conferring ownership of a piece of real estate |
| Title Company | A firm that ensures that the property title is clear and provides title insurance. |
| Title Exam | An examination of the public record to determine that the seller is the legal owner and there are no encumbrances (such as claims or liens) affecting the property |
| Title Insurance | A policy issued to lenders and buyers to protect against loss due to disputed property ownership at a later date. |
| Title Search | The process of reviewing all recorded transactions in the public record to determine whether any title defects exist that could interfere with the clear transfer of ownership of the property. Title searches will reveal any liens, judgments, or clouds. |
| Trustee's Deed | A written document which is prepared and signed by the trustee when the secured property is sold at a trustee's sale. This document transfers ownership to the successful bidder at the sale. |
| Warrant Deed | The document containing the conditions and terms of warranty issued by the owner to the buyer. It guarantees the seller about title, contents, composition of the goods. It is specifically used when a property is transferred. |