A • B • C • D • E • F • G • H • I • J • K • L • M • N • O • P • Q • R • S • T • U • V • W • X • Y • Z • Notes on Using this Glossary - D -Debt: An obligation to repay a specified amount at a specified time. Debt Service: The portion of funds required to repay a financial obligation such as a mortgage that includes interest and principal payments. Deed: A formal written instrument by which title to real property is transferred from one owner to another. The deed should contain an accurate description of the property being conveyed, should be signed and witnessed according to the laws of the state where the property is located, and should be delivered to the purchaser on the day of closing. There are two parties to a deed: the grantor and the grantee. Deed in Lieu of Foreclosure: The process wherein property owners give title to the lender to avoid a foreclosure. Deed of Trust: Like a mortgage, a security instrument whereby real property is given as security for a debt; however in a deed of trust there are three parties to the instrument: the borrower, the trustee, and the lender (or beneficiary). In such a transaction, the borrower transfers the legal title for the property to the trustee, who holds the property in trust as security for the payment of the debt to the lender or beneficiary. If the borrower pays the debt as agreed, the deed of trust becomes void. If, however, she defaults in the payment of the debt, the trustee may sell the property at a public sale under the terms of the deed of trust. In most jurisdictions where the deed of trust is in force, the borrower is subject to having her property sold without benefit of legal proceedings. A few states have begun in recent years to treat the deed of trust like a mortgage. Default: Failure to make mortgage payments as agreed upon in a commitment based on the terms and at the designated time set forth in the mortgage or deed of trust. It is the mortgagor’s responsibility to remember the due date and send the payment prior to the due date, not after. Generally, 30 days after the due date, if payment is not received, the mortgage is in default. In the event of default, the mortgage may give the lender the right to accelerate payments, take possession and receive rents, and start foreclosure. Defaults may also come about by the failure to observe other conditions in the mortgage or deed of trust. Default Judgment: Judgment entered in a lawsuit when a defendant has failed to enter a plea or otherwise defend himself. Discount Points (or Points): Points are an upfront fee paid to the lender at the time you get your loan. Each point equals 1 percent of your total loan amount. Points and interest rates are inherently connected: in general, the more points you pay, the lower the interest rate you get. However, the more points you pay, the more cash you need up front, since points are paid in cash at closing. Documentary Stamps: A state tax, in the form of stamps, required on deeds and mortgages when real estate title passes from one owner to another. The amount of stamps required varies with each state. Down Payment: The amount of money to be paid by the purchaser to the seller upon the signing of the agreement of sale. The agreement of sale will refer to the down payment amount and will acknowledge receipt of the down payment. Down payment is the difference between the sales price and maximum mortgage amount. The down payment may not be refundable if the purchaser fails to buy the property without good cause. If the purchaser wants the down payment to be refundable, she should insert a clause in the agreement of sale specifying the conditions under which the deposit will be refunded, if the agreement does not already contain such clause. If the seller cannot deliver good title, the agreement of sale usually requires the seller to return the down payment and to pay interest and expenses incurred by the purchaser. Duress Unlawful: constraint exercised upon a person, whereby the person is forced to perform some act or to sign an instrument or document against his or her will. |