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Glossary of Terms - T

Taxes and Insurance:

Funds collected as part of the borrower’s monthly payment and held in escrow for the payment of the borrower’s, or funds paid by the borrower for, state and local property taxes and insurance premiums.

Tenancy in Common:

An estate or interest in land held by two or more persons, each having equal rights of possession and enjoyment, but without any right of succession by survivorship between the owners.

Tenant:

A person occupying and using a piece of real property with the owner’s permission.

Termite Inspection:

An inspection to determine whether a property has termite infestation or termite damage. In many parts of the country, a home must be inspected for termites before it can be sold.

Third-Party Origination:

A process by which a lender uses another party to completely or partially originate, process, underwrite, close, fund, or package a mortgage loan. See also “Mortgage Broker.”

Title:

The right to, and the ownership of, property.  A title or deed is sometimes used as proof of ownership of land.

Title Covenants:

Covenants ordinarily inserted into conveyances and in transfers of title to real estate for the purpose of providing protection to the purchaser against possible insufficiency of the title received.  A group of such covenants known as the “common law covenants” includes:  covenants against encumbrances; covenants for further assurance (in other words, to do whatever is necessary to rectify title deficiencies); covenants of good faith and authority to convey; covenants of quiet enjoyment; covenants of seisin; and covenants of warranty.

Title Defect:

Any possible or patent claim or right outstanding in a chain of title that is adverse to a claim of ownership over property.

Title Insurance:

Insurance that protects lenders and homeowners against losses resulting from defects of title on a specifically described parcel of real property.

Title Search:

A check of the public records to ensure that the seller is the legal owner of the property and to identify any liens or claims against the property.

Trade Equity:

Real estate or assets given to the seller as part of the down payment for the property.

Transaction:

In real estate, the whole process required to complete the sale of real estate from offer to closing.

Transfer Tax:

State or local tax payable when title to property passes from one owner to another.

Treasury Index:

An index that is used to determine interest rate changes for certain adjustable-rate mortgage (ARM) plans. It is based on the results of auctions by the U.S. Treasury of Treasury bills and securities.

Trust Account:

An account separate and apart and physically segregated from the real estate broker’s own funds, in which the broker is required by law to deposit all funds collected for clients.

Truth-In-Lending Act (TILA):

A federal law that requires disclosure of a truth-in-lending statement for consumer credit. The statement includes a summary of the total cost of credit, such as the annual percentage rate (APR) and other specifics of the credit.

Two- to Four- Family Property:

A residential property that provides living space (dwelling units) for two to four families, although ownership of the structure is evidenced by a single deed; a loan secured by such a property is considered to be a single-family mortgage.