Abandonment
The voluntary and permanent cessation of use or enjoyment with no intention to resume or reclaim one's possession or interest. May pertain to an easement or a property.
Abrogation
Tenants cannot sign away their rights in advance of signing the lease.
Abstract of Title
A condensed version of the history of title to a particular parcel of real estate as recorded in the county clerk's records; consists of a summary of the original grant and all subsequent conveyances and encumbrances affecting the property.
Abutting
The joining, reaching, or touching of adjoining land. Abutting parcels of land have a common boundary.
Accelerated Depreciation
A method of calculating for tax purposes the depreciation of income property at a faster rat than would be achieved using the straight-line method. Note** any depreciation taken in excess of that which would be claimed using the straight-line rate is subj
Acceleration Clause
A provision in a written mortgage, note, bond, or conditional sales contract that, in the event of a default, the whole amount of principal and interest may be declared to be due an payable at once.
Accretion
An increase or addition to land by the deposit of sand or soil washed up naturally from a river lake or sea.
Accrued Depreciation
The actual depreciation that has occurred to a property at any given date; the difference between the cost of replacement new (as of the date of appraisal) and the present appraised value.
Acknowledgment
A declaration made by a person to a notary public, or other public official authorized to take acknowledgments that an instrument was executed by that person as a free and voluntary act.
Actual Eviction
The result of legal action originated by a lessor, whereby a defaulted tenant is physically ousted from the rented property pursuant to a court order.
Actual Notice
Express information or fact; that which is know; actual knowledge.
Adjustable-rate Mortgage
A mortgage in which the interest rate changes at predetermined intervals. The mortgage has caps, or a ceiling, that limits the amount it can change at the predetermined intervals.
Administrator
The party appointed by the county court to settle the estate of a deceased person who died without leaving a will.
Ad Valorem Tax
A tax levied according to value; generally used to refer to real estate tax. Also called the general tax.
Adverse possession
The right of an occupant of land to acquire title against the real owner, where possession has been actual, continuous, hostile, visible, and distinct for the statutory period.
Affidavit
A written statement signed and sworn to before a person authorized to administer an oath.
Agent
One who represents or has the power to act for another person (called the principal). The authorization may be express or implied. A fiduciary relationship is created under the law of agency when a property owner, as the principal, executes a listing agre
Agreement of sale
A written agreement whereby the purchaser agrees to buy certain real estate and the seller agrees to sell, upon terms and conditions set forth in the agreement.
Air Lot
A designated airspace over a piece of land. Air lots, like surgace property, may be transferred.
Air Rights
The right to use the open space above a property, generally allowing the surface to be used for another purpose.
Alienation
The act of transferring property to another. Alienation may be voluntary, such as by gift or sale; or involuntary, such as through eminent domain or adverse possession.
Alienation Clause
The clause in a mortgage or deed of trst that states that the balance of the secured debt becomes immediately due and payable at the mortgagee's option if the property is sold by the mortgagor. In effect, this clause prevents the mortgagor from assigning
Alluvion
New deposits of soil as the result of accretion.
Amenitites
The tangible and intangible features that increase the value or desirability of real estate.
Americans with Disabilities Act (ADA)
A federal law that became effective in 1992. It is designed to eliminate the discrimination against individuals with disabilities by mandating equal access to jobs, public accommodations, public transportation, telecommunications and government services.
Amortization
The liquidation of a financial burden by installment payments.
Amortized Loan
A loan in which the principal, as well as the interest, is payable in monthly or other periodic installments over the term of the loan.
Antitrust Laws
The laws designed to preserve the free enterprise of the open marketplace by making illegal certain private conspiracies and combinations formed to minimize competition. Violations of antitrust laws in the real estate business generally involve either pri
Appraisal
An estimate of the quantity, quality, or value of something. The process through which conclusions of property value are obtained; also refers to the report setting forth the process of estimation and conclusion of value.
Appraised Value
An estimate of a property's present worth.
Appreciation
An increase in the worth or value of a property due to economic or related causes that may prove to be either temporary or permanent; opposite of depreciation.
Appurenant
Belonging to; incident to. Ex: a garage is appurtenant to a house. The common interest in the common elements of a condominium is appurtenant to each apartment.
Arbitration
A means of settling a controversy between two parties through the medium of an impartial third party whose decision on the controversy (it is agreed) will be final and binding.
Assemblage
The process of merging two or more parcels of real estate to create one parcel.
Assessment
The imposition of a tax, charge, or levy, usually according to established rates.
Assignment
The transfer in writing of rights or interest in a bond, mortgage, lease, or other instrument.
Assumption of Mortgage
The transfer of title to property to a grantee wherein he assumes liability for payment of an existing note secured by a mortgage agaisnt the property. Should the mortgage b foreclosed and the property sold for a lesser amount than that due, the grantee-p
Attachment
The method by which a debtor's property is placed in the custody of the law and held as security pending outcome of a creditor's suit.
Attorney-in-fact
The holder of a power of attorney.
Attorney's Opinion of Title
An instrument written and signed by the attorney who examines the title, stating the attorney's opinion as to whether a seller may convey good title.
Automatic Extension
A clause in a listing agreement that states that the agreement will continue automatically for a certain period of time after its expiration date. In many states, use of this clause is discouraged or prohibited.
Avulsion
The sudden removal of land by natural forces, such as an earthquake.
Balloon payment
the final payment of a mortgage loan that is considerably larger than the required periodic payments because the loan amount was not fully amortized.
Bargain and Sale Deed
A deed that carries with it no warranties against liens or other encumbrances, but that does imply that the grantor has the right to convey title. Note that the grantor may add warranties to the deed at his or her discretion.
Base Line
One of a set of imaginary lines running east and west and crossing a principal meridian at a definite point, used by surveyors for reference in locating and describing land under the rectangular survey system (or government survey method) of property desc
Bench Mark
A permanent reference mark or point established for use by surveyors in measuring differences in elevation.
Benficiary
The person for who a trust operates, or in whose behalf the income from a trust estate is drawn. Also refers to a lender who lends money on real estate and takes back a note and deed of trust from the borrower.
Bequest
A provision in a will providing for the distribution of personal property.
Bilateral Contract
A contract in which each party promises to perform an act in exchange for the other party's promises to perform.
Bill of Sale
A written insturment given to pass title to personal property.
Binder
An agreement that may accompany an earnest money deposit for the purchase of real property as evidence of the purchaser's good faith and intent to complete the transaction.
Blanket Mortgage
A mortgage covering more than one parcel of real estate, providing fo reach parcel's partial release from the mortgage lien upon repayment of a definite portion of the debt.
Blockbusting
The illegal practice of inducing homeowners to sell their properties by making representations regarding the entry, or prospective entry, of minority persons into the neighborhood.
Blue-Sky Laws
The common name for those state laws that regulate the registration and sale of investment securities.
Branch Office
A secondary place of business apart from the principal or main office from which real estate business is conducted. A branch office generally must be run by a licensed real estate broker working on behalf of the broker operating the principal office.
Breach of Contract
The failure, without legal excuse, of one of the parties to a contract to perform according to the contract.
Broker
One who buys and sells for another for a commission.
Budget Loan or Budget Mortgage
A loan in which the monthly payments made by the borrower cover not only interest and a payment on the principal , but also one-twelfth of such expenses as taxes, insurance, assessments, and similar charges. The monthly payment is called a PITI payment.
Buffer Zone
A zone or space between two different use districts. An example of a buffer zone would be a park between a residential district and a commercial district.
Building Code
An ordinance specifying the minimum standards of construction of buildings for the protection of public safety and health.
Building Line
A line fixed at a certain distance from the front and/or sides of a lot beyond which no structure can project; a setback line used to ensure a degree of uniformity in the appearance of buildings and unobstructed light, air, and view.
Building Restrictions
The limitations on the size or type of property improvements established by zoning acts or by deed or lease restrictions.
Bulk Zoning
Bulk zoning controls the density of the development on land to avoid overcrowding.
Bundle of Legal Rights
The theory that land ownership involves ownership of all legal rights to the land such as: Possession, control within the law, and enjoyment, rather than ownership of the land itself.
Buydown Mortgage
A mortgage in which the interest rate is reduced by paying interest in advance. A temporary buydown is for the initial years of the loan. A permanent buydown is for the life of the loan.
Capacity of Parties
The legal ability of ability of persons to enter into a valid contract. Most persons have full capacity to contract, and are said to be competent parties.
Capital Gains
A tax on the profits realized from the sale of a capital asset.
Capital Improvement
Any improvement that is made to extend the useful life of a property or add to its value.
Capital Investment
The initial capital and the long-term expenditures made to establish and maintain a business or investment property.
Capitalization
The process of converting into present value (or obtaining the present worth of) a series of anticipated future periodic installments of net income. In real estate appraising, it usually takes the form of discounting. The formula is expressed as follows:
Capitalization Rate
The rate of return a property will produce on the owner's investment.
Cash Flow
The net spendable income from an investment, determined by deducting all operating and fixed expenses from the gross income. If expenses exceed income, a negative cash flow is the result.
Casualty Insurance
A type of insurance policy that protects a property owner or other person from loss or injury sustained as a result of theft, vadalism, or similar occurrences.
Caveat emptor
A Latin phrase meaning "let the buyer beware
Caveat Venditor
A Latin phrase meaning "Let the seller beware
Certificate of Eligibility
A certificate given by the federal government to qualified veterans to show their remaining eligibility for a VA guaranteed loan.
Certificate of Occupancy
A certificate of occupancy is issued after the building is inspected to make sure it complies with building codes.
Certificate of Reasonable Value
A certificate issued by the Veterans Ad ministration certifying the value, as determined by an approved VA appraiser, of property secured by a VA mortgage.
Certificate of Reduction
A document issued by the lender to verify the loan balance.
Certificate of Sale
The document generally given to a purchaser at a tax foreclosure sale. A certificate of sale does not convey title; generally, it is an instrument certifying that the holder received title to the property after the redemption period had passed and that th
Certificate of Title
A statement of opinion on the status of the title ot a parcel of real property based on an examination of specified public records.
Cession Deed
The type of deed used when land is donated to the government.
Chain of TItle
The succession of conveyances from some accepted starting point whereby the present holder of real property derives a title.
Codicil
An addition to a will that alters, explains, adds to, or confirms the will, but does not revoke it.
Coinsurance Clause
A clause in insurance policies covering real property that requires the policy holder to maintain fire insurance; coverage is generally equal to at least 80 percent of the property's actual replacement cost.
Collateral
Something of value given or pledged to a lender as security for a debt or obligation.
Commercial Property
A classification of real estate that includes income-producing properties.
Commingled Property
That property of married couple that is so mixed or commingled that it is difficult to determine whether it is separate or community property. Commingled property becomes community property.
Commingling
The illegal act of a real estate broker who mixes the money of other people with that of his or her own; by law brokers are required to maintain a separate trust account for the funds of other parties held temporarily by the broker.
Common Elements
Those parts of a property that are necessary or convenient to the existence, maintenance, and safety of a condominium, or are normally used in common by all of the condo residents. All condo owners have an undivided ownership interest in the common elemen
Common Law
The body of law based on custom, usage, and court decisions.
Community Property
A system of property ownership based on the theory that each spouse has an equal interest in the property acquired by the efforts of either spouse during marriage.
Community Reinvestment Act
A part of the Housing and Community Development passed in 1977. The purpose of the act is to prevent the practice of redlining and disinvestment by lenders in certain areas of a city.
Comparables
The properties listed in an appraisal report that are substantially equivalent to the subject property.
Competent Parties
Those persons who are recognized by law as being able to contract with others; usually those of legal age and sound mind.
Condemnation
A judicial or administrative proceeding to exercise the power of eminent domain, by which a government agency takes private property for public use and compensates the owner.
Conditional-Use Permit
A permit granted that allows the holder to build a special-purpose property that is inconsistent with zoning in the area. A conditional permit is generally issued to allow buildings for the good of the public, such as hospitals and houses of worship in a
Condominium
The absolute ownership of an apartment or a unit, generally in a multi-unit building, based on a legal description of the airspace that the unit actually occupies, plus an undivided interest in the ownership of the common elements that are owned jointly w
Conformity
The maximum value is achieved when the property is in harmony with its surroundings.
Consideration
Something of value that induces one to enter into a contract. Consideration may be valuable (money or commodity) or good (love and affection).
Constructive Eviction
Acts done by the landlord that so materially disturb or impair the tenant's enjoyment of the leased premises that the tenant is effectively forced to move out and terminate the lease without liability for any further rent. Also refers to a purchaser's ina
Constructive Notice
Notice given to the world by recorded documents. All persons are charged with knowledge of such documents and their contents, whether or not they have actually examined them. Possession of property is also considered constructive notice that the person in
Contingency
A provision in a contract that requires completion or that a certain event must occur before the contract becomes binding.
Contract
An agreement entered into by two or more legally competent parties by the terms of which one or more of the parties, for a consideration, undertakes to do or to refrain from doing some legal act or acts. A contract may be either unilateral, where only one
Contract for Deed
A contract for the sale of real estate wherein the sales price is paid in periodic installments by the purchaser, who is in possession, although title is retained by the seller until final payment. Also called an installment contract or land contract.
Contract for exchange of real estate
A contract of sale of real estate in which the consdieration is paid wholly or partly in property.
Contract Rent
Rental income received under the current lease agreement.
Contribution
The value of any part of the property is measured by its effect on the value of the whole
Conventional Insured Mortgage
A mortgage (loan) wherein the borrower has less than a 20 percent down payment. The lender may require that the borrower purchase private mortgage insurance to reduce the lender's risk.
Conventional Life Estate
A life estate created by the grantor rather than by law.
Conventional Mortgage
A mortgage (loan) where real property is used as security for the payment of the debt and the loan is not insured through FHA or guaranteed by VA.
Conventional Uninsured Mortgage
A mortgage (loan) wherein the borrower has a 20 percent or greater down payment, and the lender accepts the creditworthiness of the borrower and the property as security for the loan.
Conversion
The process of changing from one form of ownership to another, such as apartment use to condo use.
Conveyance
A written instrument that evidences transfer of some interest in real property from one person to another.
Cooperative
A residential multiunit building whose title is held by a trust or corporation, which is owned by and operated for the benefit of persons living within the building, who are the beneficial owners of the trust or stockholers of the corporation, each having
Corporation
An enity or organization created by operation of law whose rights of doing business are essentially the same as those of an individual. The entity has continuous existence until dissolved according to legal procedures..
Correction Lines
Used in the government survey to compensate for the curvature of the earth.
Cost Approach
The process of estimating the value of a special purchase property. The formula is as follows:
Reproduction or replacement cost - Depreciation + Land = Value
Counseling
The business of providing people with expert advice on a subject, based on the counselor's extensive, expert knowledge of the subject.
Counteroffer
A new offer made as a reply to an offer received, having the effect of voiding the original offer, which cannot be accepted thereafter unless revived by the offeror's repeating it.
Covenant
A promise to do or to refrain from doing an act. The covenants found in a general warranty deed are seisin, encumbrances, further assurance, quite enjoyment, and warranty forever.
Covenant of Quiet Enjoyment
In a deed, this covenant ensures that the grantee and the grantee's heirs have the right to the property free from interference from the acts or claims of third parties. IN a lease, this covenant ensures the tenants' right of possession without interferen
Curable Depreciation
When the cost of fixing the property does not exceed the value of the property
Curtesy
A life estate, usually a fractional interest, given by some states to the surviving husband in real estate owned by his deceased wife. Many states have abolished curtesy.
Cycle
The cycle of real estate is growth, stability, decline, and restoration
Datum
A horizontal plane from which heights and depths are measured.
Dba
Doing Business As
Debenture
A note or bond given as evidence of debt and issued without security.
Debit
Something owed to another; an obligation to pay or to return something.
Debit Service
A borrower's periodic payment, comprising principal and interst, on the unpaid balance of a mortgage.
Decreasing returns
When adding improvements to the land does not produce a proportional increase in the property value.
Deed
A written instrument that, when executed and delivered, conveys title to, or an interest in, real estate.
Deed in Trust
A three-party instrument in which the trustor conveys legal title to the trustee for the benefit of the beneficiary. The trustee has full power to sell, mortgage, and subdivide a parcel of real estate. The beneficiary controls the trustee's use of these p
Deed Restrictions
The clauses in a deed limiting the future uses of the property. Deed restrictions may impose a vast variety of limitations and conditions, such as limiting the density of the buildings, dictating the types of structures that can be erected, and preventing
Default
The nonperformance of a duty, whether arising under a contract or otherwise; failure to meet an obligation when due.
Defeasance
A provision or condition in a deed or in a separate instrument that, when being performed, renders the instrument void.
Defeasible Fee Estate
An estate in land in which the holder has fee simple title subject to being divested on the happening of a specified condition. Two categories: (1) fee simple determinable or special limitation, and (2) fee simple subject to a conditions subsequent.
Deficiency Judgment
A personal judgment levied against the mortgagor when a foreclosure sale does not produce sufficient funds to pay the mortgage debt in full.
Delinquent taxes
Those unpaid taxes that are past due
Delivery
The legal act of transferring ownership. Documents, such as deeds and mortgages, must be delivered and accepted to be valid.
Delivery in Escrow
Delivery of a deed to a third person until the performance of some act or condition by one of the parties.
Demand
The willingness of a number of people to accept available goods at a given price; often coupled with supply
Density zoning
The zoning ordinances that restrict the average maximum number of houses per acre that may be built within a particular area, generally a subdivision.
Depreciation
In appraisal, a loss of value in property due to all causes, including physical deterioration, functional depreciation, and economic obsolescence. In real estate investment, an expense deduction for tax purposes as taken over the period of ownership of in
Descent
The hereditary succession of an heir to the property of a relative who dies intestate.
Designated Agent
An agent who has been appointed by a broker to act for a specific principal or client.
Determinable Fee Estate
A defeasible fee estate in which the property automatically reverts to the grantor upon the occurrence of a specified event or condition. Also known as special limitation.
Devise
A transfer of real estate by will or last testament. The donor is the devisor and the recipient is the devisee.
Diminishing Returns
The principle of diminishing returns applies when a given parcel of land reaches its maximum percentage return on investment, and further expenditures for improving the property yield a decreasing return.
Discount Points
An added loan fee charged by a lender to make the yield on a lower-than-market-value FHA or VA loan competitive with higher-interest conventional loans.
Discount Rate
The rate of interest a commercial bank must pay when it borrows from its Federal Reserve Bank. Consequently, the discount rate is the rate of interest the banking system carries within its own framework. Member banks may take certain promissory notes that
Dispossess
To oust from land by legal process.
Dominant Tenement
A property that includes in its ownership the appurtenant right to use an easement over another's property for a specific purpose.
Dower
The legal right or interest recognized in some states that a wife acquires in the property her husband held or acquired during their marriage. During the lifetime of the husband, the right is only a possibility of an interest; on his death, it can become
Dual Agency
This occurs when an agent represents both parties in the same transaction. Both parties are clients.
Due Diligence
Reasonable care and protection agents owe any party that is their client; the obligation of a person to use good-faith efforts to perform the terms of a contract, such as the buyer's responsibility to make efforts to obtain financing if that was a term of
Due-on-sale Clause
A clause in a mortgage allowing th elender the right to implement the acceleration clause in the mortgage if the borrower transfers title to the property.
Duress
The use of unlawful constraint that forces action or inaction against a person's will.
Earnest Money Deposit
An amount of money deposited by a buyer under the terms of a contract.
Easement
A right to use the land of another for a specific purpose, such as for a right-of-way or for utilities; an incorporeal interest in land. An easement appurtenant passes with the land when conveyed.
Easement by Necessity
An easement allowed by law as necessary for the full enjoyment of a parcel of real estate; for example. a right of ingress and egress over a grantor's land.
Easement by Prescription
An easement acquired by continuous, open, uninterrupted, exclusive, and adverse use of the property for the period of time prescribed by state law.
Easement in Gross
An easement that is not created for the benefit of any land owned by the owner of the easement but that attaches personally to the easement owner. For example: a right to an easement granted by Eleanor Franks to Joe Fish to use a portion of her property f
Economic Life
The period of time over which an improved property will earn an income adequate to justify its continued existence.
Economic Obsolescence
The impairment of desirability or useful life arising from factors external to the property, such as economic forces or environmental changes that affect supply and demand relationships in the market. Loss in the use and value of a property arising from t
Emblements
Those growing crops produced annually through the tenant's own care and labor, and that can be taken away after the tenancy is ended. Personal property. IF the tenant terminates the tenancy voluntarily, the tenant is not generally entitled to the emblemen
Eminent Domain
The right of a government or municipal quasi-public body to acquire property for public use through a court action called condemnation, in which the court determines that the use is a public use and determines the price or compensation to be paid to the o
Encroachment
A fixture, or structure, such as a wall or fence that invades a portion of a property belonging to another.
Encumbrance
Any lien, such as a mortgage, tax, or judgment lien, an easement, a restriction on the use of the land, or an outstanding dower right that may diminish the value of the property.
Equal Credit Opportunity Act (ECOA)
A federal act that prohibits discrimination by lenders on the basis of race, color, religion, sex, national origin, age, or marital status in any aspect of a credit transaction.
Equalization
The raising or lowering of assessed values for tax purposes in a particular county or taxing district to make them equal to assessments in other counties or districts.
Equitable Lien
A lien that arises out of common law, wherein the parties have agreed in writing that a certain property will be held as security for a debt.
Equitable Right of Redemption
The right of a defaulted borrower to redeem property before foreclosure upon full payment of the outstanding debt, as well as accrued interest and related costs prior to the foreclosure.
Equitable Title
The interest held by a vendee under a contract for deed or a sales contract; the equitable right to obtain absolute ownership to property when legal title is held in another's name' an insurable interest.
Equity
The interest or value that an owner has in a property over and above any mortgage indebtedness
Erosion
The gradual wearing away of land by water, wind, and general weather conditions; the diminishing of property caused by the elements.
Errors and Omissions Insurance
An insurance that protects brokers from loss due to errors, mistakes, and negligence.
Escalation Clause
A clause found in a mortgage or lease that allows the payment to adjust over the life of the mortgage or lease.
Escheat
The reversion of property to the state in the event the owner thereof dies without leaving a will and has no heirs to whom the property may pass by lawful descent.
Escrow
The closing of a transaction through a third party, called an escrow agent or escrowee, who receives certain funds and documents to be delivered on the performance of certain conditions in the escrow agreement.
Estate for Years
An interest for a certain, exact period of time in property leased for a specified consideration.
Estate in severalty
An estate owned by one person.
Estoppel Certificate
A legal instrument executed by a mortgagor showing the amount of the unpaid balance due on a mortgage and stating that the mortgagor has no defenses or offsets against the mortgagee at the time of execution of the certificate. AKA certificate of no defens
Evidence of Title
A proof of ownership of property, which is commonly a certificate of title, a title insurance policy, an abstract of title with lawyer's opinion, or a Torrens registration certificate.
Exchange
A transaction in which all or part of the consideration for the purchase of real property is the transfer of like-kind property (that is, real estate for real estate).
Exclusive-Agency Buyer Agency Agreement
A buyer brokerage agreement wherein the broker is entitled to a payment only if the broker locates the property the buyer purchases. The buyer can find property without the services of the agent.
Exclusive-Agency Listing
A listing contract under which the owner appoints a real estate broker as an exclusive agent for a designated period of time to sell the property on the owner's stated terms for a commission. However, the owner reserves the right to sell without paying an
Exclusive Buyer Agency Agreement
An exclusive-agency agreement wherein the buyer is legally bound to compensate the agent whenever the buyer purchases a property of the type described in the contract. This is true even if the buyer finds the property.
Exclusive-Right-to-Sell Listing
A listing contract under which the owner appoints a real estate broker as the owner's exclusive agent for a designated period of time to sell the property on the owner's stated terms and agrees to pay the broker a commission when the property is sold, whe
Exculpatory Clause
A hold harmless clause that may be found in contracts excusing a party for injuries to another.
Executed Contract
A contract in which all parties have fulfilled their promises and thus performed the contract.
Execution
The singing and delivery of an instrument. Also, a legal order directing an official to enforce a judgment against the property of a debtor.
Executor
The male designated in a will to handle the estate of the deceased.
Executory Contract
A contract under which something remains to be done by one or more of the parties.
Executrix
The female designated in a will to handle the estate of the deceased. The probate court must approve any sale of property by the executrix.
Expenses
The short-term costs that are deducted from an investment property's income, such as minor repairs, regular maintenance, and renting costs.
Expressed contract
An oral or written contract in which the parties state their terms and express their intentions in words.
Familial Status
A protected class under federal fair housing law. A landlord cannot refuse to rent to a head of the household with minor children or to a pregnant woman.
Federal Fair Housing Act
The term for the Title VIII of the Civil Rights Act enacted in 1968 that prohibits discrimination based on race, color, sex, religion, or national origin in the sale and rental or residential property.
Federal Home Loan Bank System
A system created by the Federal Home Loan Bank Act of 1932 to provide for a central reserve credit system for savings institutions engaged in home mortgage finance (predominantly savings and loans). The system is divided into 12 federal home loan bank dis
Federal Home Loan Mortgage Corporation
A member of the secondary mortgage market that primarily buys conventional loans.
Federal Housing Administration (FHA)
A federal administrative body created by the National Housing Act in 1934 to encourage improvement in housing standards and conditions to provide an adequate home financing system through the insurance of housing mortgages and credit, and to exert a stabi
Federal Income Tax
An annual tax based on the income, including monies derived from the lease, use, or operation of real estate.
Federal National Mortgage Association (FNMA)
Fannie Mae is the popular name for this federal agency that creates a secondary market for existing mortgages. FNMA does not loan money directly, but rather buys VA, FHA, and conventional loans.
Federal Reserve Banks
The government controls banks located in each of the 12 Federal Reserve districts, established by the Federal Reserve Act of 1913.
Fee Simple Absolute
The highest form of ownership recognized by law.
AKA: Fee Simple or Ownership in Fee.
Fee Simple Subject to a Condition Subsequent
A defeasible fee estate in which the grantor reserves right of reentry to the property when the condition of ownership is violated.
FHA Appraisal
A Federal Housing Administration (FHA) evaluation of a property as security for a loan. Includes study of the physical characteristics of the property and surroundings; the location of the property; the prospective borrower's ability and willingness to re
FHA Loan
A loan insured by the FHA and made by an approved lender in accordance with the FHA's regulations
Fiduciary Relationship
A relationship of trust and confidence, as between trustee and beneficiary, attorney and client, and principal and agent.
First Mortgage
A mortgage that creates a superior voluntary lien on the property mortgaged relative to other charges or encumbrances against same.
Fixture
An article that was once personal property, but has been so affixed to real estate that is has become real property.
Floor Area Ratio (FAR)
The FAR indicates the relationship between a building area and land, or the relationship between the square footage of the building and the square footage of the land.
Forcible Entry and Detainer
A summary proceeding for restoring to possession of land one who is wrongfully kept out or has been wrongfully deprived of the possession.
Foreclosure
A legal procedure whereby property used as security for a debt is sold to satisfy the debt in the event of default in payment of the mortgage note or default of other terms in the mortgage document. The foreclosure procedure brings the rights of all parti
Formal Will
A will written by an attorney, with two subscribing witnesses and with necessary language. Such a will may appoint the executor of the estate as independent agent and avoid the necessity of a bond.
Fractional Sections
An oversized or undersized section that is not exactly one mile by one mile is a fractional section; used only in the government or rectangular survey.
Fraud
A misstatement of a material fact made with intent to deceive or made with reckless disregard of the truth that actually does deceive.
Freehold Estate
An estate in land in which ownership is for an indeterminate length of time, in contrast to a leasehold estate.