Glossary of Title Insurance Terms
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for definition of term.
ABSTRACT OF TITLE
ABSTRACT SEARCH
ALTA (American Land Title Association)
APPROVED ABSTRACTOR
APPROVED ATTORNEY
BACK TITLE LETTER (also BACK TITLE
CERTIFICATE)
BINDER (also COMMITMENT)
CLOSING (also SETTLEMENT)
COLLATERAL
DEED (also GENERAL WARRANTY)
DEED REFERENCE
DEFECT IN TITLE
EASEMENT
EMINENT DOMAIN
ENCUMBRANCE
ESCHEAT
ESCROW
ESTATE
EVIDENCE OF TITLE
EXCLUSION
FHA (also FEDERAL HOUSING ADMINISTRATION)
FHLMC (FEDERAL HOME MORTGAGE CORPORATION or FREDDIE
MAC)
FNMA (FEDERAL NATIONAL MORTGAGE ASSOCIATION or FANNIE
MAE)
FEE SIMPLE
FORECLOSURE
GNMA (GOVERNMENT NATIONAL MORTGAGE ASSOCIATION or GINNIE
MAE)
GOOD TITLE
GRANTEE
GRANTOR
GUARANTY POLICY
HEIR
TITLE PLANT
TORRENS SYSTEM
UNDISCLOSED DEFECTS
UNMARKETABLE TITLE
WARRANTY
Terms:
ABSTRACT
OF TITLE
A summarization of the title to land consisting of a synopsis of all
recorded deeds, mortgages, liens, encumbrances and court proceedings
which have affected the title to real estate. The abstract includes all
liens, charges or liabilities to which the real estate may be subject.
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ABSTRACT
SEARCH
A title examination based upon an abstract of title rather than a review
of public records.
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ALTA
(American Land Title Association)
ALTA is a national association of title insurance companies and title
abstract organizations. ALTA promulgates standard policy forms.
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APPROVED
ABSTRACTOR
An individual (layman, attorney, company, etc.) Who has been deemed
qualified to prepare complete, accurate abstracts of title and upon
whose abstracts title company examiners and approved attorneys rely in
determining the status of a title.
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APPROVED
ATTORNEY
An attorney who has been deemed qualified to examine and render an
opinion on real estate titles and on whose opinion title policies may be
issued.
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BACK
TITLE LETTER (also BACK TITLE CERTIFICATE)
A letter or certificate furnished to an attorney authorizing him to base
his title opinion concerning a particular parcel of real estate on an
examination of title beginning with a specific date or a specified deed.
The back title letter (certificate) provides the status of the title as
of the specific date or specified deed.
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BINDER
(also COMMITMENT)
An agreement that upon satisfaction of the requirements set forth in the
binder the insurer will issue the specified title insurance policy
subject only to the exceptions stated in the binder. The binder contains
the title status on a particular date.
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CLOSING
(also SETTLEMENT)
The process by which parties to a real estate transaction agree to and
conclude the details of a sale / mortgage including the execution of
documents relating thereto and the distribution of the appropriate
funds.
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COLLATERAL
Marketable real or personal property, which a borrower pledges as
security for a loan. In mortgage situations, specific parcels of land
usually constitute collateral.
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DEED (also
GENERAL WARRANTY)
A written conveyance of realty whereby title is transferred from one
entity to another and in which the grantor obligates himself, his heirs,
etc. to forever defend the grantee, his heirs, etc, against all lawful
claims against the title.
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DEED
REFERENCE
The number of the book and page in the public deed records where a
particular deed may be found.
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DEFECT
IN TITLE
A deficiency or impropriety in title to real estate.
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EASEMENT
A privilege, right of use or enjoyment which one entity may have in the
land of another.
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EMINENT
DOMAIN
The right of a government to take private property for public use. The
owner of the private property must be compensated.
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ENCUMBRANCE
Any right or interest in land held by other than the owner that may
decrease the lands value. Examples include mortgage liens, tax liens,
etc.
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ESCHEAT
The transfer of title of property to the state if the owner dies
intestate and without heirs.
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ESCROW
Money, securities, funds, documents or other property deposited with a
third party to be held by that third party (known as an escrow agent)
until the happening of a future event. Upon the happening of the future
event, the property deposited is delivered to the designated party.
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ESTATE
The degree, quantity, nature and extent of interest that a person has in
land.
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EVIDENCE
OF TITLE
Deed, abstract of title, attorneys opinion, title insurance, etc. A
document that demonstrates the status or quality of a real estate title.
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EXCLUSION
General matters affecting title to real property excluded from coverage
of a title insurance policy.
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FHA (also
FEDERAL HOUSING ADMINISTRATION)
An agency of the federal government which insures private loans for
financing of new and existing housing and for home repairs under
government approved programs.
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FHLMC (FEDERAL
HOME MORTGAGE CORPORATION or FREDDIE MAC)
A federally sponsored private corporation which provides a secondary
market for housing mortgages.
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FNMA
(FEDERAL NATIONAL MORTGAGE ASSOCIATION or FANNIE MAE)
A federally sponsored private corporation which provides a secondary
market for housing mortgages.
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FEE
SIMPLE
The highest estate one may have in real property. An absolute or fee
simple estate is entitled to the entire property, with unconditional
power of disposition during his life, and descending to his heirs and
legal representatives upon his death intestate.
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FORECLOSURE
The process through which a mortgager of real property is deprived of
his interest in that property because of the mortgagors failure to
comply with the terms and conditions of the mortgage.
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GNMA
(GOVERNMENT NATIONAL MORTGAGE ASSOCIATION or GINNIE MAE)
A government association which provides a secondary market for housing
mortgages and special assistance to mortgagee financing housing under
special FHA mortgage insurance programs.
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GOOD
TITLE
Marketable or merchantable title. Such a title as a court of equity
would adopt as a sufficient ground for compelling specific performance
of a contract to purchase.
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GRANTEE
Buyer of a real estate title
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GRANTOR
Seller of a real estate title.
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GUARANTY
POLICY
A title insurance policy which insures against defects of title
appearing in the public records. (Title policies insure against defects
whether or not they appear in public records.)
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HEIR
An entity that succeeds to an estate in lands, upon the death of his
ancestor by descent and right of relationship.
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TITLE
PLANT
A compilation of records of transactions affecting particular parcels of
real property. The information contained therein is otherwise available
only from an examination of public records.
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TORRENS
SYSTEM
A governmental title registration system wherein title to land is
evidenced by a certificate of title issued by a public official.
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UNDISCLOSED
DEFECTS
Imperfections in a title that cannot be determined by an examination of
public records.
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UNMARKETABLE
TITLE
A title which cannot be sold for a fair market value because of defects
or limitations.
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WARRANTY
A promise by a grantor of real estate title, for himself and his heirs,
to warrant and defend the title and possession of the estate granted, to
the grantee and his heirs forever.
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Lisa Reynolds
Tyler Pyle
Michelle Strickland
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