Terms and definitions help our clients understand trust deeds

This page was developed to help our clients understand terms and definitions of their note, trusts, deeds and other terminology that they might have questions about. It will also help you in filling out the free quote form.

1st Remaining Balance: The balance on the first loan to be recorded as a lien against a specific property. Original amount of note.

2nd Remaining Balance: The balance on the second loan to be recorded as a lien against a specific property.

Accrued Interest: This is the amount of interest earned on the note but not yet received in payment.

Adjustable-rate mortgage (ARM): A mortgage in which the interest changes periodically, according to corresponding fluctuations in an index. All ARMs are tied to indexes.

Balloon mortgage:
A mortgage loan that requires the remaining principal balance be paid at a specific point in time.

Balloon payment:
The final lump sum payment that is due at the termination of a balloon mortgage.

Closing: The completion of the buyer and seller transaction including all documentation.

Current payment: Financial payment that is up to date.

Credit Report: The report issued on an individual's credit by credit reporting agencies.

Debt: The financial obligation that is owed by the buyer (borrower).

Debtor: The one who owes money to the seller.

Deed Of Trust: This is a security investment which is handled by a third party Trustee such as a bank for the purpose of foreclosure in case of default.

Default: This is the term used for violation of the security investment.

Delinquent: Overdue payments or late payments.

Escrow: The third party stakeholder that handles all contracts and documents needed from both buyer and seller and that those documents are fulfilled according to escrow instructions.

Foreclosure: The judicial process that occurs as a means to enforce one's right to payment under a mortgage. The Judge can order the property to be sold at auction and all proceeds to be paid to the creditor.

Grantor: Person making the payments for the property.

Grantee: Person receiving the payments.

Mortgage: The security investment which insures payment of the note. In case of default, it can be foreclosed in court.

Mortgagee: The seller of the property who receives payment.

Mortgagor: The buyer or borrower that makes the payment to the mortgagee.

Payee: The person who receives payment on the note.

Payor: The person who makes the payments to the payee.

Promissory Note: A legal document promising to pay a certain amount set in agreement and time.

Trust Deed: Same as Deed of Trust and is the security investment that insures payment on a note.

Trustee: One who holds property in trust for another.

Trustor: One who deeds his property to the trustee.