Chapter 5 Flashcards
Encumbrance
Any charge, claim, right, burden (otherwise called a cloud
on title), and/or interest in real property other than the owners, including
but not limited to, any restriction upon the title to real property, affecting
and/or limiting any interests or its use.
Lien
A form of encumbrance which usually makes specific property
security for the payment of a debt or discharge of an obligation (ex:
judgments, taxes, mortgages, deeds of trust, etc..).
Voluntary Lien
Any lien placed on property with consent of, or as a result
of, the voluntary act of the owner.
Involuntary Lien
A lien imposed against property without consent of an
owner (ex: taxes, special assessments, federal income tax liens, etc..).
Debt
That which is due from one person or another; obligation, liability.
Promissory Note
Following a loan commitment from the lender, the
borrower signs a note, promising to repay the loan under stipulated terms.
The promissory note establishes personal liability for its payment. The
evidence of the debt
Security Instrument
A contract whereby a debtor agrees to use property
as security or collateral for the repayment of debt.
Hypothecate
To pledge a thing as security without the necessity of giving
up possession of it.
Mortgage
A contract whereby a mortgagor agrees to use real property as
security for the repayment of debt.
Foreclosure
Procedure whereby property pledged for a debt is sold to pay
the debt in event of default in payments or terms.
Trustor
One who borrows money from a trust deed lender, then deeds
the real property securing the loan to a trustee to be held as security until
trustor has performed the obligation to the lender under terms of a deed of
trust.
Trustee
One who holds property in trust for another to secure the
performance of an obligation. Third party under a deed of trust.
Real Property Sales Contract
An agreement to convey title to real
property upon satisfaction of specified conditions which does not require
conveyance within one year of formation of the contract.
Vendor
A seller.
Vendee
A purchaser, buyer.
Deed in Lieu of Foreclosure
A deed to real property accepted by a lender
from a defaulting borrower to avoid the necessity of foreclosure
proceedings by the lender.
Mechanic’s Lien
A lien created by statute which exists against real
property in favor of persons who have performed work or furnished
materials for the improvement of the real property.
General Lien
A lien on all the property of a debtor.
Specific Lien
A lien that attaches to one specific property only.
Package Loan
A type of loan used in home financing covering real
property, improvements, and movable equipment/appliances.
Judgment Lien
A legal claim on all of the property of a judgment debtor
which enables the judgment creditor to have the property sold for payment
of the amount of the judgment.
Easement
A right, privilege or interest limited to a specific purpose which
one party has in the land of another.
Easement Appurtenance
A right of use in the adjoining land of another
that moves with the title to the property benefiting from the easement.
Easement in Gross
A right of use in the land of another without the
requirement that the holder of the right own adjoining land.
