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FNF Producers License Exam > Key Terms > Flashcards

Key Terms Flashcards

1
Q

Abandonment

A

The voluntary surrender or relinquishment of the possession of property.

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2
Q

Abstract

A

A history of all transactions shown in the public records affecting a particular tract of land. Title Insurance is a more common method of providing evidence of marketable title in today’s real estate industry.

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3
Q

Accretion

A

An increase in land area by the gradual deposit of solid material caused by the action of water.

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4
Q

Acknowledgement

A

A formal declaration before a duly authorized official (i.e. Notary Public) by a person who has executed an instrument, that such execution in his free act and deed.

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5
Q

Acre

A

An area of land containing 43,560 square feet or 4,840 square yards.

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6
Q

Adjustable Rate Mortgage (ARM)

A

Mortgage loans under which the interest rate is periodically adjusted, in accordance with some market indicator (i.e. Treasury Bills, Financial Indexes, etc.), to more closely coincide with the current rates. The extent and number of these adjustments are agreed to in the mortgage note at the time the loan is executed.

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7
Q

Adverse Possession

A

The possession, by one person, of land belonging to another in a manner deemed adverse to the interest of the owner. In Michigan, by operation of law, title to the land could become vested in such a person after a fixed number of years if the owners fails to assert his or her rights.

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8
Q

Affidavit

A

A written statement made under oath before a notary public or other judicial officer. There can be many types of affidavits used in real estate transactions. Some may be required by a title insurance company, others may be part of a lender’s closing package.

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9
Q

Agency

A
  1. A relationship between two person and/or corporations, by agreement or otherwise, where on (the agent) may act on behalf of the other (the principal) and bind the principal by words and actions. The authority of an agency depends upon the relation created by express of implied contract or by law.
  2. A Title Insurance Agency where a title agency/agent is appointed by an underwriter to write title assurances on the underwriter/insurer’s “paper”.
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10
Q

Agreement

A

A legally binding contract made between two or more persons.

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11
Q

ALTA (American Land Title Association)

A

The trade association of the title insurance industry, which has adopted certain insurance policy forms to standardize coverage on a national basis.

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12
Q

Amortization

A

Payment to reduce the principal of a debt in regular, periodic installments. An amortization schedule can be printed to show the breakdown between principal and interest of payments and the principal balance after each payment has been applied.

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13
Q

Appraisal

A

A report from an independent third party detailing the estimated value of real estate. An appraisal is required in most first mortgage liens lending situations.

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14
Q

Appurtenance

A

A right or privilege that is a part of the ownership of property, such as a right of way to a highway across the land of another. Water rights are also an example.

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15
Q

Arbitration

A

The process by which parties who cannot agree among themselves submit the dispute to the judgement of an impartial third party.

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16
Q

Assessed Value

A

The value of property for tax purposes usually fixed by the tax assessor for the municipality.

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17
Q

Assessment

A
  1. The valuation of real estate for purposes of taxes or special improvement or assessment charges.
    2. The amount of taxes or special improvement or assessment charges. Special improvement or assessment charges are usually for the costs of streets, sidewalks, sewers, drains, etc.
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18
Q

Assignee

A

The person who receives (is assigned) the assignment; grantee.

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19
Q

Assignment

A
  1. The act of transferring an interest, such as a loan secured by a mortgage, from one person to another.
    2. The instrument of paper by which one person transfers such ownership to another.
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20
Q

Assignor

A

The person who transfers or assigns; grantee.

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21
Q

Attorney’s Opinion

A

A statement by an attorney as to the validity of a title, arrived at after investigation of the history of the title as recorded in the public records - usually a review of an updated Abstract of Title or a review of a title insurance commitment. Title Insurance is more commonly used in today’s real estate transactions, rather than, in the past, an updated Abstract and an Attorney’s Opinions of the title’s abstract.

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22
Q

Avulsion

A

A sudden change in the channel of a body of water.

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23
Q

Balloon Note

A

A form of promissory note that calls for the minimum payment of principal and the payment of interest at regular intervals. This type of note requires a substantial (or lump sum) final payment, which represents all the principal balance that remains due on the original note. This “balloon payment” could be paid in a lump sum of cash or a refinance could be done with the “lump sum” being paid off with a new mortgage to repay the balance.

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24
Q

Bankruptcy

A

A proceeding in U.S. District Court where in assets of an insolvent debtor are protected and distributed in an equitable manner.

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25
Q

Binder

A
  1. A preliminary certificate issued to present as evidence of homeowner’s insurance at closing.
    2. A preliminary report as the condition of a title and a commitment to issue a title insurance policy in a certain manner when certain conditions are met.
    3. A deposit in escrow of a small part of the purchase price of real estate, sometimes called an earnest money or good faith deposit; the consideration that binds the contract for purchase.
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26
Q

Bundle of Rights

A

Beneficial interests or rights an owner has in his property, including the rights of use and transfer, and the right to exclude others.

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27
Q

Caveat Emptor

A

Means “Let the Buyer Beware”. Places a duty on a buyer to examine goods or property before purchasing when he buys at his own risk.

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28
Q

Certificate of Title

A

A certificate issued by a title examiner stating the condition of title.

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29
Q

Chain

A

In real estate measurements (surveying), a chain is 66 feet long or 100 links, each link being 7.92 inches. The measurement may change when used in field other than surveying.

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30
Q

Chain of Title

A

The successive ownership or transfers in the history of title to a tract of land. A “chain of title” is researched through the public records, (i.e. documents recorded and related to a piece of property).

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31
Q

Chattel

A

Another name for personal property as distinguished from real estate (a/k/a real property). An article of movable property.

32
Q

Claim

A

An adverse right or interest asserted by one party against another or against an insurer or indemnitor related to property. Claims may arise from unpaid debts, taxes, as well as from hidden title defects or interest in property.

33
Q

Clear Title

A

Real property ownership free of liens, defects, encumbrances or claims.

34
Q

Closing

A

Also called “settlement”, a meeting of all parties involved in a property transaction during which documents are signed, monies are accounted for, disbursed and a real estate transaction is finalized. Could also refer to the settlement of a real estate refinance.

35
Q

Closing Protection Letter (CPL)

A

a/k/a Insured Closing Letter. Routinely requested by lenders, the Closing Protection Letter is a document issued by title insurance underwriters that sets forth the underwriter’s responsibility for negligence, fraud, and error in the closings performed by agents and approved attorneys. It indemnified the indemnitee against loss or damage arising from a breach of certain fiduciary duties owed by the closing agent to the parties to the transaction. This document is necessary because the agency/principal relationship between an underwriter and a policy issuing agent or approved attorney is limited to the issuance of a policy and does not extend escrow functions.

36
Q

Closing Statement

A

A summation, in the form of a balance sheet, made at a closing, showing the amounts of debits and credits to which each party to a real estate transaction is entitled. (NOTE: A HUG Settlement Statement affords the same summation, but in a specific format designated by the Department of Housing and Urban Development).

37
Q

Clouded Title

A

An irregularity, possible claim or encumbrance that, if valid, would adversely affect or impair the title.

38
Q

Common Area

A

When used in reference to condos or planned unit developments (PUD), the common area is that portion of land that is owned in common by all unit/lot owners and which each has an equal right to use. In a condo, the common area includes the buildings surrounding the units, but not the unit or air space.

39
Q

Co-insurance

A

Two or more policies of title insurance issued by different insurers (underwriters), each covering a portion of the same risk, which together provide total coverage of the risk.

40
Q

Commitment

A

Also called “binder”, a document is issued by a title insurance company after researching the public records related to the property to be insured, that contains the conditions ( also called “requirements”) under which a policy of title insurance will be issued, after receiving payment for the title insurance premium and meeting the requirements set forth, satisfactory to the title insurer.

41
Q

Conditions

A

Provisions related to restrictions and reservations in deeds and other real estate instruments (documents) that make a particular right contingent upon the occurrence of some future event.

42
Q

Condominium

A

An arrangement of separate ownership of individual units in a multiple unit building or in a single real property parcel. All the unit owners have a right in the common to use the common elements with separate ownership confined to the individual units, which are sequential designated. Condominiums encompass residential, industrial, or commercial (i.e. apartment, office, or store) units. Site Condominiums are related to vacant land units.

43
Q

Condominium Unit

A

A residential or commercial unit in a condominium complex.

44
Q

Condemnation

A
  1. The taking of private property for a public purpose with compensation to the owner under the right of eminent domain. Governmental units, railroads, and utility companies have the right to condemn and take private property.
    2. The destruction by government of private property that imperils the life, health, or safety of the public.
45
Q

Consideration

A
  1. Something of value given to induce another person to enter into a contract. It may be money services, or a promise, and consists of either a benefit to the promisor, or a loss or detriment to the promisee.
    2. As related to a deed - the consideration is recited on a deed noting the sale price or value exchanged to the Grantor from the grantee for the deed to land. Example: Consideration - One Hundred Thousand Dollars and no/100 ($100,000.00) OR Consideration - “Love and other valuable consideration”.
46
Q

Constructive Notice

A

Notice given by public records.

47
Q

Cooperatives

A

Often referred to as a co-op. Units in a multiple unit building or complex, wherein the land and the building is owned in fee or held under a long term lease by a cooperative corporation. The purchaser of a unit in a cooperative receives shares of stock in the cooperative corporation and a proprietary lease to his/her apartment.

48
Q

Conventional Loan

A

A loan secured by a mortgage for which the loan-to-value ration is within an acceptable range for a particular lending institution. The most common real estate loan program. The lender usually will lend 80%, 90% and even 95% under programs with a variety of terms, costs, and conditions.

49
Q

Conveyance

A

The transfer of title to property from one person to another.

50
Q

Corporation

A

An artificial person or legal entity vested with powers and capacity to contract, own, control, convey property, and transaction business within the limits of the powers granted. This legal entity can hold title to property.

51
Q

Covenant

A

A formal agreement or contract between two parties in which one party gives the other certain promises and assurances, such as covenants of warranty in a warranty deed.

52
Q

Curtesy

A

In Michigan, these rights are no longer in effect, but at one time, curtesy rights were rights that a husband had in his wife’s property at her death. Compare with “Dower”.

53
Q

DBA (D/B/A, Doing Business As)

A

A DBA is not a legal entity that can hold title to property.

54
Q

Decedent

A

A deceased person.

55
Q

Dedication

A

The setting aside of certain land by the owner and declaring it to be for public use. Examples: streets, sidewalks, parks, etc.

56
Q

Deed

A

A document through which a conveyance of property is effected.

57
Q

Deed Restriction

A

A covenant contained in a deed imposing limits on the use or occupancy of real estate or the type, size, purpose, or location of improvements to be constructed on it.

58
Q

Defect

A

A blemish, imperfection, or deficiency. A defective title is one that is irregular and faulty.

59
Q

Depreciation

A

Loss in value occasioned by ordinary wear and tear, destructive action of the elements, or functional or economic obsolescence.

60
Q

Description

A

Legal description.

61
Q

Devise

A

A gift of real estate made by a will.

62
Q

Devisee

A

One who is given real estate under a will.

63
Q

Dominant Estate

A

The property for the benefit of which a right-of-way easement exists across another’s adjoining piece of land is said to be the dominant estate. The land across which the easement runs is said to be the servient estate.

64
Q

Dower

A

A right that a wife has in her husband’s property at the time of his death. A wife must sign documents eliminating her dower interest in a any property owned by her husband.

65
Q

Draw

A

A partial advance of the proceeds of a construction loan mortgage to which the borrower is entitled when construction reaches a certain specified stage.

66
Q

Due-on-Sale Clause

A

A provision in a note and mortgage calling for automatic acceleration at the lender’s option in the event of sale or transfer of the real property to a third party; also called an “alienation clause.”

67
Q

Earnest Money

A

A deposit of funds by the purchaser on a piece of real estate as evidence of good faith until the transaction closes. Usually given at the time a purchase agreement is written.

68
Q

Easement

A

A right to use all or part of the land owned by another for specific purpose. An easement may, for example, entitle its holder to install and maintain sewer or utility lines or be granted for ingress and egress to another parcel of land.

69
Q

Easement Appurtenant

A

Easement created for the benefit of a parcel of land.

70
Q

Easement in Gross

A

Easement created for the benefit of an individual, rather than for a parcel of land (i.e. a public utility easement).

71
Q

Easement of Necessity

A

An easement which is indispensable to the enjoyment of the dominant estate. An easement by necessity arises by operation of law when land conveyed is completely shut off from access to any road by land retained by grantor or by land of grantor and that of a stranger.

72
Q

Egress

A

The right to a path or Right-of-Way over which a person may leave his own real estate.

73
Q

Eminent Domain

A

The right of a government to take privately owned property for public purposes under condemnation proceedings subject to payment for its fair market value.

74
Q

Encroachment

A

Any building, improvement, or structure located on one property (such as a wall, fence, or driveway) that intrudes upon the property of another.

75
Q

Encumbrance

A

Any interest, right, lien, or liability attached to a parcel of land (such as unpaid taxes or an unsatisfied mortgage) that constitutes or represents a burden or charge upon the property.

76
Q

Endorsement

A

(as related to title insurance) A “rider” attached to an insurance policy to expand or limit coverage.

FNF Producers License Exam (1 decks)

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