Don’t Get Confused Over Property Title Jargon Again

[vc_row css=”.vc_custom_1537366864039{margin-top: -63px !important;}”][vc_column][vc_column_text]The definitions of title terms can be just as confusing as the words themselves. Instead of deciphering the meanings for yourself, use this glossary to learn the most common terms real estate professionals will run across during dealings in a simple and easy to understand way.[/vc_column_text][vc_separator][vc_tta_accordion][vc_tta_section i_icon_fontawesome=”fa fa-plus-square-o” title=”A” tab_id=”1537366873256-87361cf9-1b63″ add_icon=”true”][vc_column_text]

Abstract of Title

Summary of the public records relating to the title to a specific piece of land. Title insurance companies and attorneys generally order these from companies / abstractors that specialize in researching a property’s chain of title. The abstract is reviewed by attorneys or title insurance companies to determine if there are any title defects to be cleared before a buyer can purchase a clear, marketable and insurable title.[/vc_column_text][/vc_tta_section][vc_tta_section i_icon_fontawesome=”fa fa-plus-square-o” title=”C” tab_id=”1537366873283-3d461f0d-97cc” add_icon=”true”][vc_column_text]

Cancellation of Mortgage

Sometimes called a Satisfaction of Mortgage, Certificate of Satisfaction, or Discharge of Mortgage – a legal instrument signed by a lender acknowledging that a mortgage has been fully paid. It must be recorded with the County Recorder (or Recorder of Deeds) to clear the title to the real property owned by the person who paid off the debt. A Satisfaction of Mortgage is a non-conveyance instrument.

Certificate of Title

A document that identifies who owns a property. It often comes in the form of a deed and is recorded with the county the home was purchased in. When a home is sold a transfer of title will be accomplished to identify the new owner.

Clear Title

A title without any kind of lien or levy from creditors or other parties and poses no question as to legal ownership. For example, an owner of a car with a clear title is the sole undisputed owner, and no other party can make any kind of legal claim to its ownership.

Cloud (on title) aka Clouded Title

An outstanding claim or encumbrance which negatively affects the marketability of title. Title companies and / or attorneys work to resolve these clouds prior to closing real estate transactions. These are usually discovered during a title search.

Certificate of Satisfaction

Sometimes called a Discharge of Mortgage, Satisfaction of Mortgage, or Cancellation of Mortgage – a legal instrument signed by a lender acknowledging that a mortgage has been fully paid. It must be recorded with the County Recorder (or Recorder of Deeds) to clear the title to the real property owned by the person who paid off the debt. A Satisfaction of Mortgage is a non-conveyance instrument.

Consumer Finance Protection Bureau (CFPB)

A regulatory agency charged with overseeing financial products and services that are offered to consumers.

Closing Disclosure (CD)

A Closing Disclosure is a five-page form that provides final details about the mortgage loan you have selected. It includes the loan terms, your projected monthly payments, and how much you will pay in fees and other costs to get your mortgage (closing costs).  This form came into effect as of October 3, 2015.

The lender is required to give you the Closing Disclosure at least three business days before you close on the mortgage loan. This three-day window allows you time to compare your final terms and costs to those estimated in the Loan Estimate that you previously received from the lender. The three days also gives you time to ask your lender any questions before you go to the closing table.


Conveyance is the act of transferring ownership from one party to another. The term also refers to the written contract itself, such as a deed, that transfers legal title of a property from a seller to a buyer.[/vc_column_text][/vc_tta_section][vc_tta_section i_icon_fontawesome=”fa fa-plus-square-o” title=”D” tab_id=”1537367133060-d7c867b7-0386″ add_icon=”true”][vc_column_text]


A deed is a legal document that grants the right, usually, to own a piece of land. What the person can put on that land will be subject to other regulations. This document transfers ownership of property from the seller to the buyer. The transfer of real estate must be in writing.

Deed to Secure Debt

A legal document that pledges property to a lender as security for the repayment of the loan. The term also is used to refer to the loan itself. This document is recorded at the county courthouse and transfers to the lender legal title to the subject property until the loan is satisfied.

Deed of Trust

A security instrument whereby real property is given as security for a debt. It s a type of secured real-estate transaction that some states use instead of mortgages. A deed of trust involves three parties: a lender, a borrower, and a trustee. The lender gives the borrower money. In exchange, the borrower gives the lender one or more promissory notes.

Discharge of Mortgage

Sometimes called a Satisfaction of Mortgage, Certificate of Satisfaction, or Cancellation of Mortgage – a legal instrument signed by a lender acknowledging that a mortgage has been fully paid. It must be recorded with the County Recorder (or Recorder of Deeds) to clear the title to the real property owned by the person who paid off the debt. A Satisfaction of Mortgage is a non-conveyance instrument.[/vc_column_text][/vc_tta_section][vc_tta_section i_icon_fontawesome=”fa fa-plus-square-o” title=”E” tab_id=”1537367188949-8bd847c1-dbb0″ add_icon=”true”][vc_column_text]


A right of land use by someone who does possess the property. Often times you see this with driveways that are owned by one homeowner but a right-of-way is permitted to another homeowner.


An encumbrance is a claim against a particular piece of property by a party who is not an owner. These may impact or delay transferring the property and typical encumbrances are such things as mortgages, liens, and easements.[/vc_column_text][/vc_tta_section][vc_tta_section i_icon_fontawesome=”fa fa-plus-square-o” title=”F” tab_id=”1537367385020-c7d438e2-cc15″ add_icon=”true”][vc_column_text]

Fannie Mae

Fannie Mae is the nickname for the Federal National Mortgage Association (FNMA). The FNMA is a private entity that purchases and guarantees FHA, VA, and conventional mortgages.

Freddie Mac

Freddie Mac is the nickname for Federal Home Loan Mortgage Corporation (FHLMC). The FHLMC is owned by the Federal Home Loan Bank System and buys FHA, VA, and conventional mortgages.


A defaulted mortgage where the lender takes possession to sell the home for failure to keep up with mortgage payments.[/vc_column_text][/vc_tta_section][vc_tta_section i_icon_fontawesome=”fa fa-plus-square-o” title=”G” tab_id=”1537367439034-1553afcf-cfaf” add_icon=”true”][vc_column_text]

Ginnie Mae

Ginnie Mae is the nickname for the Government National Mortgage Association (GNMA). GNMA is a government agency that buys FHA and VA mortgages.

Good Faith Estimate (GFE)

An itemized estimate of the various fees a buyer will have to pay at closing. Federal Law says lenders must provide it within 3 business days of an initial loan application.[/vc_column_text][/vc_tta_section][vc_tta_section i_icon_fontawesome=”fa fa-plus-square-o” title=”H” tab_id=”1537367478955-03081fda-e134″ add_icon=”true”][vc_column_text]

Home Equity Line of Credit (HELOC)

A loan that provides a way for homeowners to borrow against the equity in their home. It is a line of credit that creates a second mortgage on your property.

HUD-1 Settlement Statement

The former document used to show all charges imposed on borrowers and sellers in connection with the settlement.  This document was replaced with the Closing Disclosure Statement (CD) in October 2015.[/vc_column_text][/vc_tta_section][vc_tta_section i_icon_fontawesome=”fa fa-plus-square-o” title=”J” tab_id=”1537367524290-656bfd53-d7d0″ add_icon=”true”][vc_column_text]

Judgment Lien

A court ruling that gives a creditor the right to take possession of a debtor’s real property if the debtor fails to fulfill his or her contractual obligations.[/vc_column_text][/vc_tta_section][vc_tta_section i_icon_fontawesome=”fa fa-plus-square-o” title=”L” tab_id=”1537367605740-68f83071-4d18″ add_icon=”true”][vc_column_text]


A hold, a claim or charge by one person on the property of another as security for money owed. Claims may include obligations not met or satisfied, judgments, unpaid taxes, material or labor. They are filed on the county / state land records and are a claim against a borrower for failure to pay a debt or perform an obligation or as security in case there is a future default.

Loan Estimate

A Loan Estimate is a three-page form that you receive after applying for a mortgage.

The Loan Estimate tells you important details about the loan you have requested. The lender must provide you a Loan Estimate within three business days of receiving your application. This form went into effect on October 3, 2015

The form provides you with important information, including the estimated interest rate, monthly payment, and total closing costs for the loan. The Loan Estimate also gives you information about the estimated costs of taxes and insurance, and how the interest rate and payments may change in the future. In addition, the form indicates if the loan has special features that you will want to be aware of, like penalties for paying off the loan early (a prepayment penalty) or increases to the mortgage loan balance even if payments are made on time (negative amortization).[/vc_column_text][/vc_tta_section][vc_tta_section i_icon_fontawesome=”fa fa-plus-square-o” title=”M” tab_id=”1537367642324-52a1a1eb-64b0″ add_icon=”true”][vc_column_text]

Marketable Title

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

Mortgage Note

A written promise to pay a certain amount of money, plus interest, at a certain time, or in a specified number of installments.


A legal instrument that creates a lien upon real estate for the purpose of securing a debt. The instrument is executed by a lender and a borrower or guarantor as collateral for the payment of a debt that creates a lien on real estate owned by the borrower or guarantor. The borrower or guarantor is called the mortgagor and the lender is called the mortgagee. In some states, a different legal instrument called a deed of trust fulfills a similar function even though it is not legally the same.[/vc_column_text][/vc_tta_section][vc_tta_section i_icon_fontawesome=”fa fa-plus-square-o” title=”N” tab_id=”1537367787477-34a39817-dd38″ add_icon=”true”][vc_column_text]

Notice of Lis Pendens

Latin for “suit pending”. It is a public notice of pending litigation.[/vc_column_text][/vc_tta_section][vc_tta_section i_icon_fontawesome=”fa fa-plus-square-o” title=”P” tab_id=”1537367815960-1ae23aaf-be0e” add_icon=”true”][vc_column_text]

Power of Attorney

When one person (usually the buyer or seller) appoints someone else to act on their behalf. They are often used when one or both parties are not able to make the closing themselves.

Private Mortgage Insurance (PMI)

Generally, any down payment less than 20% will require the buyer to take out PMI. This insurance covers the lender if the buyer cannot pay back the loan or if the foreclosure sale price is less than the amount owed. Once 20% of the loan has been paid, a homeowner can apply to have PMI removed from the loan.[/vc_column_text][/vc_tta_section][vc_tta_section i_icon_fontawesome=”fa fa-plus-square-o” title=”Q” tab_id=”1537367855380-4cf223f4-c57c” add_icon=”true”][vc_column_text]

Quit-Claim Deed

A quit-claim deed is a document discharging a person’s interest in a property, whether or not the person’s interests or rights were clear, and preventing any claims to the property in the future.[/vc_column_text][/vc_tta_section][vc_tta_section i_icon_fontawesome=”fa fa-plus-square-o” title=”R” tab_id=”1537367883315-b68a0ff1-0f3d” add_icon=”true”][vc_column_text]

Real Estate Owned (REO)

REO homes are those properties owned by a lender. They are available because they did not sell at a foreclosure auction.

Real Property

Land and that which is permanently affixed to it.


A document issued by a mortgage holder indicating that the borrower is released from the mortgage debt. The deed of reconveyance transfers the property title from the lender (also called the beneficiary) to the borrower (also called the trustor).

Release of Mortgage

Sometimes called a Satisfaction of Mortgage, Certificate of Satisfaction, or Cancellation of Mortgage – a legal instrument signed by a lender acknowledging that a mortgage has been fully paid. It must be recorded with the County Recorder (or Recorder of Deeds) to clear the title to the real property owned by the person who paid off the debt. A Satisfaction of Mortgage is a non-conveyance instrument.

Real Estate Settlement Procedures Act (RESPA)

RESPA is a federal law that regulates the activities of lending institutions and requires them to give consumers advance notice of closing costs.


Recording is the act of filing deed and mortgage documents that affect conveying real estate interests with an official recorder’s office. Until documents are recorded, they are generally not protected against subsequent purchases or mortgage liens.


Process of the same mortgagor paying off one loan with the proceeds of another. It is often done to acquire a lower interest rate, decrease the payback period, or for loan consolidation purposes.


The cancellation of a contract. When using your home as collateral for a loan you have a right to cancel the transaction within 3 business days (most often applicable in a refinance).[/vc_column_text][/vc_tta_section][vc_tta_section i_icon_fontawesome=”fa fa-plus-square-o” title=”S” tab_id=”1537367991278-73c335d6-91a8″ add_icon=”true”][vc_column_text]

Satisfaction of Mortgage

Sometimes called a Discharge of Mortgage, Certificate of Satisfaction, or Cancellation of Mortgage – a legal instrument signed by a lender acknowledging that a mortgage has been fully paid. It must be recorded with the County Recorder (or Recorder of Deeds) to clear the title to the real property owned by the person who paid off the debt. A Satisfaction of Mortgage is a non-conveyance instrument.

Short Sale

When a homeowner sells their home for less than the balance of all outstanding liens. The lien holders must approve the short sale and agree to take less than is owed when the sale occurs.

Security Interest

An agreement by the owner of real property to convey a right or interest therein to a creditor in exchange for a thing of value. This right or interest provides possession of the property to the creditor in the event the underlying obligation of the owner/borrower is breached (foreclosure).

It must have 3 qualities to be created:

  1. Value must be provided in exchange for the collateral;
  2. the debtor must have rights in the collateral or the ability to convey rights in the collateral to a secured party; and
  3. either the debtor must have authenticated a security agreement with a description of the collateral or the creditor must be in possession of the collateral.

When all three of these formalities are met, the security interest attaches to the collateral and becomes enforceable.[/vc_column_text][/vc_tta_section][vc_tta_section i_icon_fontawesome=”fa fa-plus-square-o” title=”T” tab_id=”1537368057313-12275872-b9e1″ add_icon=”true”][vc_column_text]


The evidence or right a person has to the ownership and possession of real property. It may be used to refer to a party’s ownership interest in a property, or it may be used to refer to the documents by which a right of ownership is established.

Title Insurance Policy

Protects lenders or homeowners against loss of their interest due to legal defects or failure of title to a particular parcel of real property. Benefits are paid only to the “named insured.” A lender’s policy is required by the lender; however, an owner’s policy, though normally purchased, is optional. A title defect could cause an owner to lose all or part of their real property to a superior ownership interest or claim if uninsured.

Title Transfer Tax

A title transfer tax is essentially the transaction fee charged for passing the title of the property from one person or entity to another.

Truth In Lending Disclosure Statement

The Truth in Lending Act (TILA) of 1968 is United States federal law designed to promote the informed use of consumer credit, by requiring disclosures about its terms and cost to standardize the manner in which costs associated with borrowing are calculated and disclosed.

A Truth-in-Lending Disclosure Statement provides information about the costs of your credit.

Effective October 3, 2015, for most kinds of mortgage loans a new form called the Loan Estimate  replaces the initial Truth-in-Lending disclosure, and a Closing Disclosure replaces the final Truth-in-Lending disclosure.

Title Insurance Binder

Frequently referred to as binder or commitment. It is the written commitment of a title insurance company to insure title to the property under the conditions stated in the binder. If the transaction closes, and the settlement agent does not meet all of the conditions on the binder, the result may not be a clear title and the settlement agent may become liable for loss incurred.

Title Search or Examination

A check of the title records to determine that the buyer is purchasing a house from the legal owner and that there are no liens, overdue special assessments, or other claims or outstanding restrictive covenants on file which would adversely affect the marketability of title. Used to generate an Abstract of Title.


The party given legal responsibility to hold property in the best interest of or “for the benefit of” another. When a borrower defaults on a Deed of Trust the trustee may sell the property.[/vc_column_text][/vc_tta_section][vc_tta_section i_icon_fontawesome=”fa fa-plus-square-o” title=”U” tab_id=”1537368132118-ba7c9520-1095″ add_icon=”true”][vc_column_text]

Uniform Commercial Code (UCC)

A set of suggested laws relating to commercial transactions. The UCC was one of many uniform codes that grew out of a late nineteenth-century movement toward uniformity among state laws.

UCC-1 financing statement (an abbreviation for Uniform Commercial Code-1) is a legal form that a creditor files to give notice that it has or may have an interest in the personal property of a debtor (a person who owes a debt to the creditor as typically specified in the agreement creating the debt).

UCC 3 form, also known as a Financing Statement Amendment, is a document tracking changes to the UCC 1 such as the termination, the continuation, and the transfer of the Financing Statement. Other amendments are also filed, such as amending the names of the two parties or amending the collateral.

Unencumbered Property

Property that is free and clear of any encumbrances such as creditor claims or liens. Examples of typical unencumbered assets are a house without any mortgage or other lien on it.[/vc_column_text][/vc_tta_section][vc_tta_section i_icon_fontawesome=”fa fa-plus-square-o” title=”W” tab_id=”1537368183365-7cd0c5ea-2dc8″ add_icon=”true”][vc_column_text]

Warranty Deed

A warranty deed is a document that is used to legally transfer property, with the owner giving warranty that they have the sole right to do so and that there are no claims to the title.[/vc_column_text][/vc_tta_section][/vc_tta_accordion][vc_separator][vc_column_text]

How reQuire Can Help You:

As an ancillary benefit, settlement companies, law firms, and underwriters have access to our innovative release tracking and reporting solution that will help to improve your file management, record keeping, and the risk abatement processes.[/vc_column_text][/vc_column][/vc_row][vc_row css=”.vc_custom_1537368262276{margin-bottom: 35px !important;padding-top: 20px !important;padding-right: 20px !important;padding-bottom: 20px !important;padding-left: 20px !important;background-color: #f1f1f1 !important;}”][vc_column][vc_column_text]