Table Funding Table funding is an option which allows brokers approved for Wholesale Traditional Lending to originate, process and close loans in their name. But at the time of settlement, the loan is transferred to the lender. The lender simultaneously advances funds for the loan, conveys title as well as all loan papers at time of closing. This option meets the needs of brokers who want to maintain good customer relationship by closing loans in their own name.
Table funding is applicable in wet states only. Wet states are the states having Wet Settlement laws, which is require lending banks to pay out the funds within a period of time (somehow within 2 days of closing). This law is in place to reduce the practice if delaying funds after closing the documents.
Table funding is a response to the needs and requirements of the market. By providing the funds for originators at closing, the process helps small firms which do not have the required funds for lending purposes. What happens in table funding is: mortgage brokers may process and select loans but at the time of settlement, they transfer these loans to the lender.
Tacking adding or combining successive periods of continuous occupation of real property by adverse (hostile and/or acting against owners wishes) possessors. This concept enables someone who has not been in possession for the entire statutory period to establish a claim of adverse possession.
Take-out financing long-term permanent financing. In the usual large construction project, the developer obtains 2-types of financing. The 1st is the interim loan which is a short-term loan to cover construction costs. Before lending any money, however, the interim lender normally requires a commitment by a permanent lender to agree to "take out" the interim lender in which the lender pays off the 1st construction loan and leaves the developer with a permanent long-term loan when the building has been completed.
Taking the concept of taking comes from the Takings clause of the fifth amendment of the United States Constitution. The clause reads, "nor shall private property be taken for public use, without just compensation." This means that when land is taken for public use through the government's power of eminent domain or condemnation, the owner must be compensated. (refer to eminent domain)
Talking sign a radio transmitter with a range of up to 250 feet that broadcasts a description of a property to prospects listening to a radio tuned to the transmitter's frequency.
Tandem plan a mortgage subsidy program offered from time to time by the United States Congress. The Government National Mortgage Association (GNMA) purchases certain mortgages at below market interest rates, granting borrowers low-interest loans. GMNA sells the loans on the secondary market at a discount, the discount being the amount of the subsidy. These programs are offered "in tandem" with local mortgage lenders.
Taxation (1) The process by which a government or municipal quasi-public body raises monies to fund its operation. (2) The impact an investment has on the investor's liability for the payment of federal, state, and local taxes.
Tax Abatement - a reduction in the level of taxation faced by an individual or company. Examples of an abatement include a tax decrease, a reduction in penalties or a rebate. A common type of tax abatement is a property tax abatement where a homeowner who has received a property tax bill that they feel is too high and also believe that the assessed value of their property is too high, can appeal to their local tax assessor for a tax abatement.
Tax bill a property owner's tax bill is computed by applying the tax rate to the assessed valuation of the property.
Tax credit An amount by which tax owed is reduced directly.
Tax deed an instrument, similar to a certificate of sale, given to a purchaser at a tax sale.
Tax deferred exchange (1031 exchange) under Section 1031 of the Internal Revenue Code, some or all of the realized gain from the exchange of property may not need to be immediately recognized for tax purposes. Both properties in an exchange must be held for productive use in trade or business or for investment and must be of a like-kind.
Tax-free gifts are gifts that are free from federal gift taxes.
Tax levy the amount to be raised from the general real estate tax is then imposed on property owners through a tax levy. A tax levy is the formal action taken to impose the tax, usually a vote of the taxing district's governing body.
Tax lien a charge against property, created by operation of law. Tax liens and assessments take priority over all other liens
Tax rate the tax rate for each taxing body is computed separately. To arrive at a tax rate, the total monies needed for the coming fiscal year are divided by the total assessments of all real estate located within the taxing body's jurisdiction.
Tax Reform Act of 1986 (TRA 86) sweeping revisions to the income tax laws, enacted by the United State Congress in 1986, that lowered tax rates and eliminated many tax shelters.
Taxpayer Relief Act of 1997 (TRA 97) enacted by the United State Congress and effective May 7, 1997, TRA '97 provides for broader exemption from capital gains taxes on the profits on the sale of a personal residence. Replaces the old provision for a "one-time" exemption of $125,000 for sellers over age 55.
Tax sale a court-ordered sale of real property to raise money to cover delinquent taxes.
Tax shelter a phrase often used to describe some of the tax advantages of real estate or other investments, such as noncash deductions for cost recovery (depreciation), interest, taxes and postponement or even elimination of certain taxes. The tax shelter not only may offset the investor's tax liability relevant to the real estate investment but also may reduce the investor's other ordinary income, which reduces overall tax liability.
Tenancy at sufferance a tenancy (or estate) in which a person wrongfully holds or occupies a property after the expiration of a lease without the consent of the landlord. No notice of termination is required for the landlord to evict the tenant.
Tenancy at will a tenancy (or estate) in which a person holds or occupies real estate with the permission of the owner, for a term of unspecified or uncertain duration: i.e., there is no fixed term to the tenancy.
Tenancy by the entirety some states allow husbands and wives to use a special form of co-ownership called tenancy by the entirety. In this form of ownership, each spouse has an equal, undivided interest in the property. (The term entirety refers to the fact that the owners are considered one indivisible unit because early common law viewed a married couple as one legal person).
Tenancy for years a tenancy for a definite period of time. The tenant must vacate the property at the end of the lease unless an extension or new lease has been agreed upon.
Tenancy in severalty ownership of a property by one person, rather than held jointly with others. Also called sole tenancy.
Tenant in general, one who exclusively holds or possesses property, such as a life tenant or a tenant for years; commonly used to refer to a lessee under a lease. A tenant's occupancy, although exclusive, is always subordinate to the rights of the owner. Tenant refers to an occupant, not necessarily a renter.
Tenant emergency procedures manual a printed manual outlining emergency procedures, including evacuation plans and contact information for emergency personnel. The manual is used by building managers in the event of accident, illness, fire, natural disaster or other emergency situation.
Tenants in common (TIC) a form of concurrent ownership of property between two or more persons, in which each has an undivided interest in the whole property. This form of ownership is most commonly found when the parties acquire title by a decedents wishes in a "Will and/or Trust". Each co-tenant is entitled to the undivided possession of the property. No co-tenant can exclude another co-tenant, or claim ownership of a specific portion of the property. Each co-tenant holds an estate in land plus the home/building by separate and distinct titles, but with unity of possession. Their interests may be equal or unequal. When the conveyance document does not specify the extent of interest of each cotenant, there is a rebuttable presumption that the shares are equal. Unlike a joint tenancy, there is no right of survivorship in a tenancy in common. Therefore when one of the co-tenants dies, the interest passes to his or her heirs or beneficiaries and not to the surviving tenants in common unless the surviving co-owner is an heir or a purchaser. The property interest of a tenant in common is thus subject to a probate proceeding.
Tenant improvements a commercial or an industrial property manager often is called on to make tenant improvements. These are alterations to the interior of the building to meet a tenant's particular space needs. Such construction alterations range from simply repainting or recarpeting to completely gutting the interior and redesigning the space by erecting new walls, partitions and electrical systems.
Tenement a common law real estate term that describes those real property rights of a permanent nature. These rights relate to the land and pass with conveyance of the land, such as buildings and improvements.
Term the length of time in which a loan is to be paid off.
Terms and Conditions the negotiable issues outlined in the offer to purchase and / or the purchase and sale agreement.
Termite inspection a visable check of a property for the presence of termites. Usually performed by a licensed exterminator. Buyers often make a termite inspection a condition of a sales contract, and require a pest control report or a clearance letter showing the property to be clear of any live, visable infestation. The VA, FHA and Fannie Mae all require a termite inspection as a condition of a loan.
Term loan A short-term loan requiring interest-only payments until maturity, at which time the entire principal is due and payable.
Testament also known as a Testamentary trust, is a trust established by will.
Testate having made and left a valid will.
Testator a person who has made a valid will. A woman often is referred to as a testatrix, although testator can be used for either gender.
Thermal mass is a property that enables building materials to absorb, store, and later release significant amounts of heat. Buildings constructed of concrete and masonry have a unique energy savings advantage because of their inherent thermal mass.
Third party authorization Banks will not speak to just anybody who randomly calls to inquire about your loan. The purpose of a third-party authorization is to prevent the bank from getting sued by homeowner/borrower. Bank protocol, is it needs the borrowers permission when it comes to discussing borrowers personal financial information with somebody else. In a Short Sale, the 3rd party is most always the listing agent who has acquired authorization from the home owner.
Third party originator third-party originators prepare loan applications for borrowers and submit the applications to lenders.
3-way switch a light switch that allows a person to turn the light on or off from either end of a hallway or stairway.
30-day notice a documented notice to vacate a premises under a periodic tenancy. Notice must be for the rent period, but not more than 30 days.
Three-day notice Notice to quit, quit or cure, or quit or pay rent. Three-day notice must be given before an unlawful detainer action.
Threshold notification a notification by brokers that they have met the threshold requirements for filing status and fiscal year reports on trust fund activities.
Thrift Another name for a savings and loan association; a financial institution established to promote "thrift" by accepting savings deposits, and to make home mortgage loans.
Tier (township strip) A strip of land six miles wide, extending east and west and numbered north and south according to its distance from the base line in the rectangular (government) survey system of legal description.
Timing refers to the length of time one must wait to receive cash flow from an investment.
Time is of the essence a contract clause that emphasizes punctual performance as an essential requirement of the contract. Thus, if any party to the instrument does not perform within the specified time period (the drop-dead date), that party is in default, provided the non-defaulting party has made a valid tender of performance. If no tender is made, then the clause may be waived. The clause may also be waived by the subsequent acts of the parties such as accepting late payments or signing escrow instructions that allow for extensions of time in which to perform.
Time-sharing a modern approach to communal ownership and use of real estate that permits multiple purchasers to buy undivided interests in real property (usually in a resort condominium or hotel) with a right to use the facility for a fixed or variable time period. Under time-sharing forms of ownership, potential purchasers of property buy fixed or floating time periods for use of a specific apartment within a project.
Title can be viewed as (1) The right to or ownership of land, or (2) The evidence of ownership of land.
Title defects an unresolved claim against the ownership of property, which prevents presentation of a marketable title. Such claims may arise from failure of the owner's spouse or former partner to sign a deed, current liens against the property or an interruption in the title records to a property.
Title insurance a comprehensive indemnity contract under which a title insurance company warrants to make good a loss arising through defects in title to real estate or any liens or encumbrances thereon. Unlike other types of insurance, which protect a policyholder against loss from some future occurrence (such as a fire or auto accident), title insurance in effect protects a policyholder against loss from some occurrence that has already happened, such as a forged deed somewhere in the chain of title. Needless to say, a title company will not insure a bad title any more than a fire insurance company would insure a burning building. However, if upon investigation of the public records and all other material facts, the title company feels that it has an insurable title, it will issue a policy.
Title insurance fees the costs involved in purchasing title insurance. May include title insurance policy and search fees.
Title search the examination of public records relating to real estate to determine the current state of the ownership.
Title theory Some states interpret a mortgage to mean that the lender is the owner of mortgaged property. But in reality and applicable to California, upon full payment of the mortgage debt the borrower becomes the landowner.
Torrens Title system A method of evidencing title by registration with the proper public authority, generally called the registrar. A legal system for the registration of land, used to verify the ownership and encumbrances (except tax liens), without the necessity of an additional search of the public records. The purpose of the Torrens Act pertaining to registration of title to land is to conclusively establish an indefeasible title to the end that anyone may deal with such property with the assurance that the only rights or claims of which he or she need take notice are those so registered. The Torrens system of registration is the title itself; it differs from a title insurance policy, which is only evidence of title. In other words, a person does not acquire title to Torrens-registered real property unless that person registers the title. The distinctive feature of registered property is that title does not pass, and encumbrances (such as mortgages) are not effective against the property until such encumbrances or conveyances are noted on the registered certificate of title. A party who suffers loss through an error made by the governmental registrar can recover damages from the state through an assurance fund. The registrar, however, will not personally defend against litigation or reimburse the landowner for litigation expenses, which is one reason why most mortgagees require title insurance even for Torrens-registered titles. Under the Torrens system, the landowner initially petitions a state court to register his or her property, giving notice to all interested parties. After a search of title is filed with the court, there is generally a hearing to determine the status of the title and the court's determination is made in the form of a court decree. The procedure is similar to a quiet title suit. The initial use of the Torrens system is optional. But once property is registered, all subsequent transfers must follow the registration procedures. Approximately 10 states have adopted the Torrens system ( California has adopted). It is also popular in Canada, Australia and Great Britain. In some states, Torrens-registered property is not subject to a general judgment lien, nor can title be lost through adverse possession.
Tort a wrongful act; a violation of a legal right.
Town house a type of dwelling unit normally having two floors, with the living area and kitchen on the base floor and the bedrooms located on the second floor; a series of individual houses having architectural unity and a common wall between each unit.
Township a division of land, used in the government (rectangular) survey system of land description, which is six miles square, and contains 36 sections, each of which is one mile square and consists of 23,040 acres.
Township line lines running east and west, parallel to the base line and six miles apart
Township squares when the horizontal township lines and the vertical range lines intersect, they form squares. These township squares are the basic units of the rectangular survey system. Townships are 6 miles square and contain 36 square miles (23,040 acres).
Township tiers township lines form strips of land called township tiers. These township tiers are designated by consecutive numbers north or south of the base line.
Toxic Substance Control Act enacted by Congress in 1976, the act authorizes EPA to secure information on all new and existing chemical substances and to control any of these substances determined to cause an unreasonable risk to public health or the environment. The act was established to ensure that the human health and environmental effects of chemical substances were identified and properly controlled prior to placing these materials into commerce.
Trade fixture an article of personal property annexed or affixed to leased premises by the tenant as a necessary part of the tenant's trade or business. At the termination of a lease, a tenant must leave most fixtures in the premises; however, trade fixtures are removable by the tenant before expiration of the lease, and the tenant is responsible for any damages caused by their removal. However, a tenant cannot usually remove replacement fixtures, that is, improvements installed to replace worn-out ones. For instance, if a tenant installs a new bar to replace an old bar in a tavern the tenant leases, the tenant cannot remove the bar upon termination of the lease. If the tenant fails to remove trade fixtures within a reasonable time of lease expiration, the fixtures will be considered abandoned and will become the property of the landlord.
Trading on the equity the practice of agreeing to buy real estate and then assigning the purchase agreement to another buyer before closing takes place; thus turning a profit by "selling the paper."
Tranche a series of bonds “pooled” and issued are a security for a CMO (collateralized mortgage obligations). A tranche sometimes refers to a single issue of a security released at different timesFor example, a company may announce that is intends to issue $10,000,000 in bonds in two tranches of $5,000,000. Tranches are important to collateralized mortgage obligations, which are backed by pools of mortgages. These mortgages are arranged in tranches that mature at different times, for instance in 10 years, 15 years, and 30 years
Transaction broker a transaction broker (also referred to as a non-agent, facilitator, coordinator or contract broker) is not an agent of either party. A transactional broker's job is simply to help both the buyer and the seller with the necessary paperwork and formalities involved in transferring ownership of real property. The buyer and the seller negotiate the sale without representation.
Transaction Coordinator (also known as the "TC" ) is a person and/or a working team responsible for managing and monitoring the paperwork relative to the Real Estate transaction. The process involves interfacing with Real Estate professionals, Clients (Seller or Buyers), Escrow companies, Title companies and property management companies. A TC is responsible for maintaining a copy of escrow files and the production, coordination and processing of all information and documents pertaining to the sale of each home. Lastly the TC puts together the final Broker file of the entire real estate transaction.
Transfer tax a state/city or local tax imposed on the property transfer (sale) or conveyance of realty property or any realty interest by means of grant deed, lease, sublease, assignment, contract for deed or similar instrument. One purpose of the tax is to acquire reliable data on the fair market value of the property to help establish more accurate real property tax assessments. Keep in mind the actual transfer tax varies from county to county, city to city.....Currently in San Diego the "transfer tax" is $1.10 for every $1,000 of a home sale. FOR EXAMPLE a home sold for $345,000 will incur a $379.50 transfer tax upon sale of the home (calculated: $345,000/1000 = 345, therefore 345 x $1.10 = $379.50)
Treasury Bill a Treasury bill issued for less than a year.
Treasury Note issued from one to five years.
Treasury Bond issued from five to ten years.
Trespass unlawful entry or injury to the property of another.
Trigger terms stated terms in an advertisement which trigger additional disclosure of all credit terms.
Trip hazard any situation where there is an increased likelihood of tripping (e.g. stairs that do not have a uniform tread or riser height all the way along the stairs).
Triple-net lease a net-net-net lease where, in addition to the stipulated rent, the lessee assumes payment of all expenses associated with the operation of the property. This includes both fixed expenses, such as taxes and insurance, and all operating expenses, including costs of maintenance and repair. In some cases, the triple-net tenant even pays the interest payments on the lessor's mortgage on the property leased. Strictly speaking, the term triple-net lease is redundant because "net lease" adequately describes the situation. Rather than rely on labels, however, the parties must examine the provisions of the lease to discover the extent of the tenant's responsibilities.
Triplex a building comprised of three dwelling units, each having a front and rear (or side) door and yard; similar to row houses.
Truss a roof structural support system made up from "2 by" wood components that are attached using press-on metal plates (as opposed to rafters that are nailed together).
Trust a documented arrangement whereby legal title to property is transferred by the grantor (or trustor) to a person called a trustee, to be held and managed by that person for the benefit of another, called a beneficiary.
Trustee (1) One who holds property in trust for another as a fiduciary and is charged with the duty to protect, preserve and enhance the value and the highest and best use of the trust property. One who holds property in trust for another to secure the performance of an obligation. In those states using trust deeds as security devices, the trustee holds bare legal title to the property pending the borrower/trustor paying off the underlying debt or promissory note. The trustee is usually a lending institution, trust company or title insurance company.
Trust deed also called a deed of trust. A legal document in which title to property is transferred to a third-party trustee as security for an obligation owed by the trustor (borrower) to the beneficiary (lender). A trust deed is similar to a mortgage—the main difference is that it involves three parties. When a borrower repays the note secured by a trust deed, the trustee must reconvey title back to the borrower by way of a Deed of Reconveyance.
Trust deed lien a lien on the property of a trustor that secures a deed of trust loan.
Trustee's deed A deed executed by a trustee conveying land held/property in a trust.
Trust funds money or other things of value that are received by a broker or salesperson on behalf of a principal or any other person, and which are held for the benefit of others in the performance of any act(s) for which a real estate license is required.
Trust fund bank account an account set up by a broker, attorney or other agent at a bank or other recognized depository, into which the broker deposits all funds entrusted to the agent by the principal or others; also called an earnest money or escrow account.
Trust ledger an accounting ledger where a property manager records monies paid out on behalf of an owner.
Trustor The person who creates a trust and gives the instructions to the trustee.
Truth-in-lending law (TIL) a body of federal law effective July 1969 as part of the Consumer Credit Protection Act, and implemented by the Federal Reserve Board's Regulation Z. It was amended in 1982 by the Truth-in-Lending Simplification and Reform Act and later amendments. The main purpose of this law is to ensure that borrowers and customers in need of consumer credit are given meaningful information with respect to the cost of credit. In this way consumers can more readily compare the various credit terms available to them and thus avoid the uninformed use of credit. This law creates a disclosure device only, and does not establish any set maximum or minimum interest rates or require any charges for credit
Truth-in-lending Act (TILA) The most important aspects of the act concern the pieces of information that must be disclosed to a borrower prior to extending credit: such as annual percentage rate (APR), term of the loan and total costs to the borrower. This information must be visable/apparent on all documents presented to the consumer before signing, and also possibly on periodic billing statements. TILA applies to most types of credit, whether it be closed-end credit (such as an auto loan or mortgage), or open-ended credit (such as a credit card).
Two-step mortgage a hybrid loan between a fixed-rate and adjustable-rate loan where a lower rate remains in effect for seven years and is then adjusted once for the balance of the loan period.
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