Acceleration
Clause -
An alternate term for an alienation clause. Upon
the happening of a certain event, the note is
said to be "accelerated", i.e., becomes due in
full.
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Alienation Clause
- Provision in a note, or in a security instrument,
calling for automatic payment in full in the event
of an unauthorized sale or transfer of title by
borrower.
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Assumption
- An agreement in which a buyer agrees to
be liable for payment of an existing note secured
by a mortgage or Deed of Trust.
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Beneficiary
- The lender, for whose benefit the Deed of
Trust is created as security for his money.
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Chain of Title
- A chronological list of documents comprising
the recording history of title to a specific parcel
of real property.
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Conveyance
- A written instrument transferring title
to or an interest in property.
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Escrow -
A transaction in which an impartial third party
acts as agent for both seller and buyer, or for
both borrower and lender, in carrying our instructions,
recording documents, delivering papers and documents,
and disbursing funds.
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Foreclosure
- Enforcement of a lien by sale of property
given as security. In California, foreclosure
may be judicial (requires a lawsuit brought before
a court) or non-judicial. Almost all foreclosures
in California are pursued non-judicially.
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Foreclosure Sale
- The sale of property given as security to
secure performance of an obligation. All liens
junior to the one in foreclosure are "wiped out"
or eliminated at the sale. Senior liens remain
in effect. Tax obligations are unaffected by foreclosure
sales.
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Grant Deed
- A written instrument, guaranteeing ownership
by implied warranties, which transfers title to
real property.
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Lien -
A charge upon property for the purpose of securing
the payment or discharge of a debt or obligation.
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Notice of Default
- A notice recorded of a trustor's failure
to perform an obligation under a Deed of Trust,
usually failure to make timely payments on the
promissory note. The initial step in a non-judicial
foreclosure of a Deed of Trust.
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Notice of Trustee Sale
- A notice recorded of a scheduled sale of
the property in default, giving the day, time,
location, and approximate opening bid. The trustee
sale is sometimes called the foreclosure sale.
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Quit Claim Deed
- A form of deed containing no warranties,
which conveys the current right, title and interest
of the grantor in and to real property. Often
used in divorces and in selling the Brooklyn Bridge.
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Reconveyance -
A document extinguishing or canceling the lien
of a Deed of Trust.
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Record - To incorporate
into the public records of the County Recorder.
Redemption - The
act of buying back property previously sold in
judicial proceedings, available for a period after
the foreclosure concludes. While a judicial foreclosure
is possible, it is rarely used with Deeds of Trust
in California. Non-judicial sales have no
period of redemption.
REO - A
property taken by a lender through foreclosure
because no one bid on it at the trustee sale.
The auctioneer makes a credit bid for the lender,
who receives the property - the security for the
loan - instead of cash.
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Title Insurance
- Assurance of indemnification or compensation
for loss occasioned by defects in the title to
real property, or to the interest insured. After
all liens and encumbrances are researched by a
title company and published in a title report
approved by a buyer, a policy of title insurance
is issued.
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Trust Deed
- Also called a TD or Deed of Trust - a three-party
security instrument that conveys bare legal title
to property as security for the performance of
an obligation; sometimes called a mortgage (actually
a two-party security instrument). When recorded,
liens are identified by the order in which they
were recorded, e.g., 1st TD, 2nd TD, 3rd TD, etc.
The 1st TD is senior to the 2nd and is called
the senior lien. The 2nd is junior to the 1st,
but senior to the 3rd, etc.
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Trustee
- In California, a three-party state, the
trustee holds the bare legal title to the property
for the benefit of another, the lender. Chosen
by the beneficiary, he follows the appropriate
steps in the foreclosure procedure and signs the
deed if the property goes to sale. If a promissory
note is paid off, it is the trustee who reconveys
or cancels the Deed of Trust.
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Trustor-
The borrower of the funds who gives or conveys
bare legal title to the property in trust using
a Deed of Trust.
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