Land

In a legal sense, the solid part of the surface of the earth, as distinguished from water; any ground, soil or earth whatsoever regarded as the subject of ownership and everything annexted to it, whether by nature, e.g., trees and everything in or on it, such as minerals and running water, or annexed to it by man; e.g., buildings, fences, etc. In an economic sense, land consists of all those elements in the wealth of a nation which is supposed to be furnished by nature as distinguished from those improvements which owe their value to the labor and organizing power of man.

Land Contract

Installment plan for buying a house. It is used as an alternative to obtaining a loan from a traditional, source such as a mortgage banker or savings and loan.

Late Charge

A penalty for failure to pay an installment on time.

Latent Defect

Hidden structural defect.

Lease with Option to Purchase

A lease under which the lessee has the right to purchase the property. The option may run for the length of the lease or only for a portion of the lease period.

Legal Description

An expanded and unique description of a property that is used on legal documents, such as deeds and deeds of trust. Recorded documents generally require a legal description.

Lender

A general term encompassing all mortgages, and beneficiaries under deeds of trust.

Lender's Instructions

A document that lenders prepare for the closing agent that outlines the requirements for loan closing.

Lessee

One who possesses the right to use or occupy a property under lease agreement.

Lessor

One who holds title to and conveys the right to use and occupy a property under lease agreement.

Letter of Intent

A formal method of stating that a prospective developer, buyer or lessee is interested in property.

Lien

An encumbrance against property for for the payment of debt; a lien may be a mechanic's lien, mortgage, unpaid taxes or judgment.

Life Estate

An estate in real property for the life of a living person. The estate then reverts back to the grantor or to a third party.

Limited Partnership

A partnership consisting of one or more general partners who conduct the business and are responsible for losses, and one or more special partners, who contributes capital and are liable only to the amount contributed.

Lis Pendens

A public notice that litigation is pending on a property.

Listing

A record of property for sale by a broker who has been authorized by the owner to sell. Also used to denote the property so listed.

Listing Agreement

Agreement between a property owner and a real estate broker, authorizing the broker to find a buyer for the property. If the sale is consummated, the listing broker will be paid a fee.

Loan Discount/Premium Fees

Fees that borrowers pay (sometimes seller will pay for borrower) that adjust to the yield requirement of the investor. Loan discount denotes an investor yield requirement higher than the note rate. Loan premium denotes an investor yield requirement lower than the note rate.

Loan Lock

Guarantee from a lender that a borrower will receive the interest rate in effect at the time of loan application.

Loan Officer

A person that helps borrowers through the loan selection, processing, and closing of a mortgage loan. Loan officers can be paid a commission or salary for their services and can work for mortgage brokers, mortgage bankers, or depository institutions.

Loan Origination Fees

The cost to obtain a loan that is paid to the originating lender or broker.

Loan Package

The information regarding a borrower and property necessary which is the basis for a lender's credit decision to extend or deny credit.

Loan Ratio

The amount of a loan to the value or selling price of real property.

Loan Servicing

The function of collecting loan payments, managing the property tax and insurance escrows, foreclosing on defaulted loans and remitting payments to the investor/beneficiary.

Loan-to-Value Ratio

The ratio of the mortgage loan amount to the property's appraised value or selling price, whichever is less.

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Margin

The number of percentage points the lender adds to the index rate to calculate the adjustable rate mortgage (ARM) interest rate at each adjustment.

Market Value

The most likely price a given property will bring if widely exposed on the market, assuming fully informed buyer and seller.

Marketable Title

A title that is free and clear of objectionable liens, clouds or other title defects. Atitle which enables an owner to sell his property freely to others and which others will accept without objection.

Marketing

The management process through which efforts to conceive, develop and deliver goods and services are integrated to satisfy the needs and wants of selected customers as a means of achieving company objectives.

Market Price

The price paid for a property; the amount of money that must be given or which can be obtained at the market in exchange under the immediate conditions existing at a certain date. To be distinguished from market value.

Market Value

The higest price estimated in terms of money which a buyer would be warranted in paying and a seller justified in accepting, provided both parties were fully informed, acted intelligently and voluntarily and, further, that all the rights and benefits inherent in or attributable to the property were included in the transfer.

Mechanics Lien

A lien created by statute for the purpose of securing priority of payment for the price or value of work performed and materials furnished in construction or repair of improvements to land.

Misrepresentation

False statement made to or concealment of knowledge from another party with the intent to provoke action from that party.

Mortgage

A lien or claim against real property given as security for a loan. It is a two party agreement as apposed to the three-party agreemenet of a deed of trust.

Mortgage Broker

A professional that helps consumers through the loan selection, processing and closing of a mortgage loan. Most mortgage brokers have access to a wide range of mortgage products through many mortgage lenders. Mortgage brokers are paid a fee by the borrower when a suitable mortgage is found and closed.

Mortgage Commitment

A written notice from the bank or other lending institution saying it will advance mortgage funds in a specified amount to enable a buyer to purchase a house.

Mortgagee

The lender of money or the receiver of the mortgage document.

Mortgage Insurance

Insurance required for a loan-to-value ratio above 80.01%.

Mortgage Banker

Financial intermediaries that orginate mortgage loans through loan officers or independent mortgage brokers and sell the mortgages into the secondary mortgage market.

Mortgage Note

The document outlining the amount of the debt, the terms and payments, the interest rate, margins and caps for ARMs, the name of the lender and the borrower, and any other material item required by the lender.

Mortgage Warehousing

A funding facility, such as a commercial bank, that is used by mortgage companies to fund loans which are sold to an investor shortly thereafter. The mortgage notes are used as collateral for this interim financing.

Mortgagor

The borrower of money or the giver of the mortgage document.

Multiple Listing Service

A means of making possible the orderly dissemination and correlations of listing information to its members so that REALTORS may better serve the buying and selling public.

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NATIONAL ASSOCIATION OF REALTORS

The association of REALTORS dedicated to the protection and the preservation of the free enterprise system and the right of the individual to own real property as guaranteed by teh Constitution of the United States of America. Each member of the NATIONAL ASSOCIATION OF REALTORS must adhere to a strict Code of Ethics and Standards of Practice designed to provde assurances to the public of the REALTORS integrity and professionalism.

Negative Amortization

An increase in principal balance which occurs when the monthly payments do not cover all of the interest cost. The interest cost which is not covered by the payment is added to the unpaid principal balance.

Net Listing

An arrangement wherby the Broker receives as commission all monies received above a minimum sales price agreed to by the owners and the Broker.

Non-conforming Loan

Loans that are above the loan limits set by FNMA and FHLMC. Also known as jumbo loans.

Nonconforming Use

A property which does not conform to the zoning of an area.

Note

A written promise to repay a certain sum of money on specified terms.

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Obsolescence

Impairment of desirability and usefulness brought about by changes in the art, design or process or from external influencing circumstances that make a property less desirable and valuable for a continuity or use.

Offer

A promise by one party to do a specified deed as the other party in turn performs a specific deed.

Office of Comptroller Currency

A federal government regulatory agency that oversees some commercial banks.

Office of Thrift Supervision

A federal government regulatory agency that oversees savings and loans.

Open End Mortgage

A mortgage permitting the mortgagor to borrow additional money under the same mortgage, with certain conditions.

Open Listing

An authorization given by a property owner to a real estate Broker wherin said Broker is given the nonexclusive right to secure a purchaser; open listings may be given to any number of Brokers without liability to compensate any except the one who first secures a buyer ready, willing and able to meet the terms of the listing, or secures the acceptance by the seller of a satisfactory offer.

Origination Fee

A fee or charge for work involved in the evaluation, preparation and submission of a proposed mortgage loan.

Owner of Record

The individual(s) named on a deed that has been recorded at the local municipality.

Owners Policy

Title insurance for the owner of property, rather than a lienholder.

Ownership

The right to posess and use property to the exclusion of others.

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