The following are common terms one might encounter within the title abstracting business. As always if we can be of assistance in any way or help clarify some of the following, please do not hesitate to contact us.
The chronological order of conveyance of a parcel of land, from the original owner to the present owner.
Closing:
The process of completing a real estate transaction during which deeds, mortgages, leases and other required instruments are signed an/or delivered, and accounting between parties is made, and the money is disbursed.
Closing Protection Letters:
A document issued by a title insurance company in connection with an about-to-be-issued title insurance policy. It protects a mortgagee who is forwarding funds to a title insurance company's agent or attorney against an embezzlement
of funds or a failure to follow specific closing instructions
Commitment:
The preliminary report or binder issued prior to the issuance of a title insurance policy containing the terms, conditions, exceptions, and any other matters under which the title insurer is willing to issue its title insurance policy.
Encroachment:
The extension of a structure from the real estate to which it belongs across a boundary line and onto adjoining property.
Encumbrances:
A claim, lien charge, or liability attached to and binding real property.
Endorsement:
The act, of the holder of a negotiable instrument, of transferring said instrument by signing the back of said instrument with or without qualifications.
Escrow:
Any transaction wherein one person for the purpose of affecting the sale, transfer, encumbering, or leasing of real or personal property to another person, delivers any written instrument, money evidence of title to real or personal
property or any other thing of value to a third person to be held by such third person until the happening of a specified event or the performance of a prescribed condition, , then it is then to be delivered by such third person to
a grantee, grantor, promisee, promissor, oblige, obligor, bailee, bailor or any agent or employee or any of the latter.
Exception:
Any item specifically excluded.
Foreclosure:
A proceeding in and out of court, to extinguish all rights, title, and interest, of owners of property in order to sell the property to satisfy a lien against it.
Gap Coverage:
Title insurance is generally a two-step procedure, and the period of time between those two steps is the gap period. A title insurance gap policy provides insurance coverage to the policyholder for title defects that may arise during
the gap period.
Insurance:
A contract under which, for consideration, one party agrees to indemnify another for a possible loss under certain conditions.
Lender’s Policy:
When a mortgage is granted, the lender seeks protection for their investment and requires a policy be issued to protect against losses resulting from claims made by others against the property.
Loan Closing:
The time agreed upon by a borrower and a lender when the execution of the loan documents by the borrower occurs.
Owner’s Policy:
A policy of title insurance usually insuring an owner of real estate against loss occasioned by defects in, liens against, or un-marketability of the owner’s title.
Policy:
A contract insuring or indemnifying owners of, or other persons lawfully interested in, real or personal property or an interest in real or personal property against loss or damage.
Premium Rates:
Price for a unit of insurance.
Probate:
Originally, the proving that a will is valid.
Real Property:
Lands and anything permanently affixed to the land, such as buildings affixed.
Requirements:
That which is imposed by an authority
Search and Examination:
A review of all recorded documents affecting a specific piece of property to determine the present condition of title.
Settlement:
The time when the settlement agent has received a duly executed deed, loan funds, loan documents, and other documents and certified funds required to carry out the terms of a contract between the parties, and the settlement agent can
reasonably determine that pre-recordation condition of the contract have been satisfied.
Simultaneous Issue:
When an Owner’s and Lender’s title insurance policy is issued at the same time. Such issuances usually allows for a reduced premium.
Subrogation:
The substitution of one person to another, so that the former may exercise certain rights or claims of the latter.
Title Defect:
Title to real property which lacks some of the elements necessary to transfer good title.
Title Insurance:
Indemnity against loss resulting from defects in or liens upon a title
Good Faith Estimate:
An estimate of closing costs the lender is required (under the federal Real Estate Settlement Procedures Act) to give to the buyer with at least three days of applying for a mortgage loan.
Title Insurer:
An entity that underwrites title insurance coverage.
Title Producer:
Means a person who is authorized to perform, on behalf of a title insurer, the following acts in conjunction with the issuance of a title insurance commitment or policy covering real or personal property situated in the District of Columbia.
HUD-1 Settlement Statement:
Is a standard form in use in the United States of America which is used to itemize services and fees charged to the borrower by the lender or broker when applying for a loan for the purpose of purchasing or refinancing real estate.
