Amortization:  The reduction of debt over a fixed term on an installment basis.

Appraisal:  An estimation of value of real property "as of" the present or a past date (not future).  Any of three methods are used where applicable: cost approach, income approach, and market data approach.

Appreciation:  Growth in value.

Asking price:  The price an appraiser has determined for a property and the price for which it is on the market.

Assessed value:  The value placed on property by the taxing body of a county.  This value is then used as a basis for computing taxes.

Assignment of Deed of Trust or Mortgage: Assumption by a purchaser of liability for payment of an existing mortgage, or deed of trust. May or may not be accompanied by a release of liability of the original borrower.

Balloon payment:  A final installment payment, larger than previous installments that pays off a debt.

Capital gains:  The profits realized above the adjusted cost basis (cost plus purchase expenses) on the sale of property.

Deed of Trust: A type of security instrument where the borrower conveys the property's title to a third party (trustee) to be held "in trust" as security for the note.

Default:  Failure to discharge a duty or obligation.

Earnest money:  A deposit of money given by a party to bind the contract usually credited toward the sales price.

Easement:  An interest held by one party in the real property of another, giving that person the legal right to trespass on the other's property.

Equity:  In real estate, the value of an interest a person holds over and above any mortgages or liens on the property.

Escrow:  Money or documents held in trust by a neutral third party.

Fair Market Value:  The appraised value of a property as compared with other property values on the market.

Foreclosure: A legal procedure by which mortgaged property is sold, upon default, in order to satisfy a debt. Foreclosures generally are governed by state law, and rules vary between states.

Full Reconveyance: a document prepared by the trustee when an obligation secured by a deed of trust or mortgage is paid back in full.  Once recorded this reconveyance eliminates the lien from the property's title.

Grantee:  The party to whom the title to real property is conveyed:  the buyer.

Grantor:  The person who conveys real estate by deed:  the seller.

Intestate:  A person who has died without leaving a valid will.

Irrevocable:  Incapable of being recalled or revoked: unchangeable, unalterable.

Joint tenancy:  A joint estate whereby upon the death of one joint tenant, his or her interest will go to the surviving joint tenant(s).

Jointly and Severally:  A legal term indicating that a contract has been entered into by two parties and the two parties are not only liable together but individually as well. 

Junior lien: a legal claim upon real property recorded subsequent to (or after) another legal obligation.  A senior (1st) lien would have priority over a junior (2nd, 3rd, etc) lien in most cases. 

Lis Penden (LIS): Notification of a pending lawsuit. The initial document (judicial) filed by an attorney or trustee that starts the foreclosure process after the occurrence of default under the deed of trust or mortgage. Both Lis Penden (LIS) and Notice of Default (NOD) are part of the PRE-foreclosure process.

Mortgage: A conveyance of an interest in real property, given as security for the payment of a debt. An agreement between two parties: the borrower and the lender.

Notice of Default (NOD): The initial document (non-judicial) filed by a trustee that starts the foreclosure process, usually after the occurrence of a default under the deed of trust, or mortgage.  Both Lis Penden (LIS) and Notice of Default (NOD) are part of the PRE-foreclosure process.

Notice (Judgment) of Foreclosure Sale: An order signed by a judge, directing a "Notice of Sale" be published and that a referee (trustee) sell the property at a public auction.

Notice of Trustee's Sale: A filing by notice announcing a public auction.

Points:  Discount charges imposed by lenders to raise the yields on their loans.  One (1) point equals 1% of the loan amount.

Postponement: a verbal announcement made at the time and location of the scheduled trustee's sale that resets the auction to a later date.

Power of Attorney:  A written authorization to an agent to perform specified acts on behalf of his or her principal.

Preliminary title search:  The initial review of all previously recorded documents regarding a specific property.

Prepayment clause:  A clause in a mortgage that gives a mortgagor the priviliage of paying the mortgage indebtedness before it becomes due, either with or without prepayment penalty.

Promissory note:  Written evidence of a debt including the amount, interest rate, and terms.

Quit claim deed:  A deed transferring whatever interest in the property, if any, that a grantor may have.  They are usually used to clear title.

Real Estate Owned (REO): "Real Estate Owned" by the lender; the final step in the foreclosure process.  This document conveys property ownership back to the lender.

Recession of Notice of Default: A document when signed by the lender and recorded by the trustee removes the burden of a previously recorded Notice of Default when the amount in default has been paid back or cured.

Recording:  The act of writing or entering, in a book of public record, instruments affecting the title to real property.

Reinstatement Period: The time period between the recording of the Notice of Default and ending 11 business days before the trustee's auction sale.  The default may be paid back or cured at any time during this period by paying all delinquent amounts including the trustee's fees and costs.

Seller financing:  Refers to the owner of a property who agrees to carry a mortgage on the property that he or she is selling, so that the buyer doesn't have to obtain any or all of the financing from another source or lending institution.

Short sale:   A sale of a house in which the proceeds fall short of what the owner still owes on the mortgage. Many lenders will agree to accept the proceeds of a short sale and forgive the rest of what is owed on the mortgage when the owner cannot make the mortgage payments. By accepting a short sale, the lender can avoid a lengthy and costly foreclosure and the owner is able to pay off the loan for less than what he owes. 

Testate:  Where a person dies leaving a valid will.

Title company:  A firm that examines title to real estate and issues title insurance.

Title insurance:  Insurance issued by a title company guaranteeing the title to be good and marketable.  Title insurance policies can be issued to protect the mortgagee only, the full interest of the buyer or both.