Title & Escrow Glossary

Abstract of Judgment: A summary of the essential provisions of a court judgment that, when recorded, creates a general lien on all real property of the judgment debtor in the county. Acknowledgment: A formal declaration before a notary public that an execution of an instrument is the signer's act and deed. Adjustable Rate Mortgage (ARM): A mortgage in which the interest rate is adjusted periodically according to a preselected index.

ALTA (American Land Title Association): A national association that adopts standard title policy forms. Amortization: Paying off a debt in installments over time without a final balloon payment. Beneficiary: The person entitled to receive funds or property under a will, trust, insurance policy, or security instrument — in a mortgage loan, the beneficiary is the lender. Bona Fide Purchaser: One who buys property in good faith, for fair value, and without notice of adverse claims.

CC&Rs (Covenants, Conditions and Restrictions): Limitations on the use and enjoyment of real property, most common in condominiums and planned unit developments. Chain of Title: A chronological list of recorded instruments tracing title from the original owner to the present owner. Clear Title: Title free from liens, defects, or other encumbrances. Cloud on Title: Any document, claim, unreleased lien, or encumbrance that would impair title to a property.

Deed of Trust: A security agreement creating a lien by which title to real property is transferred to a third-party trustee as security for an obligation owed by the trustor (borrower) to the beneficiary (lender). Documentary Transfer Tax: The tax, based on sales price, charged by the city and/or county on the transfer of real property. Easement: A limited right or interest in land of another that entitles the holder to some use, privilege, or benefit. Encumbrance: A claim, right, or lien upon real property held by someone other than the owner.

Escrow: The process in which a disinterested third party holds money and documents for delivery to the respective parties on performance of established conditions. Fee Simple: An estate under which the owner has complete interest and unrestricted use, including the right to dispose of the property. Hidden Defect: An encumbrance on a title not apparent in public records — such as unknown heirs, secret marriages, or forged instruments.

Joint Tenancy: Ownership by two or more persons with equal shares; upon death of one tenant, their share passes to the surviving tenant(s). Lien: A recorded document claiming an interest in real property as security for a debt. Lis Pendens: Legal notice that a lawsuit is pending — also called a notice of action. Mechanic's Lien: A lien on real estate securing payment of debts to persons who perform labor or furnish materials for construction.

Reconveyance: The conveyance to the landowner of title held by a trustee when the debt is satisfied. Statement of Information: A confidential form completed by buyer, seller, and borrower allowing the title company to distinguish between parties with similar names. Subordination Agreement: An agreement making a prior lien inferior to an otherwise junior lien. Vesting: The manner in which title is held — examples include community property, joint tenancy, and tenancy in common.

This glossary is provided by Team Goeglein at Fidelity National Title as a reference for agents and clients across the South Bay and Westside LA. Contact Matt Goeglein or Xavier de la Piedra IV with questions about any title or escrow term.