Glossary of Notary Public, Mortgage, Signing Agent, and Loan Signing Terms.

0-9 · 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

1-4 Family Rider ( Assignment of Rents )
Please see, "Family Rider"

Acceleration Clause
This clause allows the lender to speed up the rate at which your loan comes due or even to demand immediate payment of the entire outstanding balance of the loan should you default on your loan.

Acknowledgment
1. The act of admitting or recognizing the existence of an agreement by signing as evidence of one's intention that the agreement shall be binding and in full force and effect. 2. The certificate affixed to the document. 3. A notary act where the signer acknowledges to the notary that they signed a particular document in the past. In such a notary act, the signer must sign the notary's journal in the notary's presence, but can sign the document before appearing before the notary. A common mispelling of this word is Acknowledgement which contains an additional "e" in the middle of the word.

Addendum to the HUD
This document verifies that you have read, understood, and agreed to the contents of the HUD ( Settlement Statement ). It is necessary for the borrower to sign this document.

Address Certification The purpose of this document is to verify the address of the property.

Adjustable Rate Mortgage (ARM)
A mortgage in which the interest rate is adjusted periodically based on a preselected index. Also sometimes known as the renegotiable rate mortgage, or the variable rate mortgage.

Adjustable Rate Note
A Note that is with an adjustable rate mortgage. Please see, "Note"

Adjustable Rate Rider This document calculates the interest rate and monthly payments the borrower must make. The charges would be basd on the US Treasury Index.

Adjustment Date
The date on which the interest rate changes for an adjustable-rate mortgage (ARM).

Adjustment Interval
On an adjustable rate mortgage, the time between changes in the interest rate and/or monthly payment, typically one, three, or five years.

Adjustment Period
The period that elapses between the adjustment dates for an adjustable-rate mortgage (ARM).

Administer
To give in a formal way. A notary might administer an Oath or Affirmation for example.

Affiant
The person who takes an oath or affirmation. The person to whom an oath or affirmation is administered who is sometimes called a deponent.

Affidavit
A document that contains a statement, made under oath or affirmation, signed by the affiant and a jurat certificate signed and sealed by a notary.

Affirmation
A solemn statement, equivalent by law to an oath, but without religious significance or reference to a Supreme Being.

Affix
To secure an object to another. To attach, or add to. In the notary context, affix is typically used when speaking of affixing one's stamp to an instrument. The word instrument is a formal term for a document. It simply means to stamp something in a notary context.

Amortization
Amortization means loan payment by equal periodic payments calculated to pay off the debt at the end of a fixed period, including accrued interest on the outstanding balance.

Amortization Term
The amount of time required to amortize a mortgage loan. The amortization term is expressed as a number of months. For example, for a 30-year fixed-rate mortgage, the amortization term is 360 months.

Annual Percentage Rate (APR)
The APR reflects the cost of a mortgage as a yearly rate. This rate is likely to be higher than the stated note rate or advertised rate on the mortgage, because it takes into account points and other credit costs. This APR allows the home buyers to compare different types of mortgages based on the annual cost for each loan.

Annual percentage yield (APY)
The rate of interest earned by an account owner in a year, if no withdrawals occur. All financial institutions must calculate the APY in the same way.

Appear before
Notary acts require the signer or affiant to appear before the notary public. There was a case where a person in jail was in a window of a room fifty feet away. The notary could not clearly see the signer, therefore, the signer was deemed to not have appeared before the notary and a Power of Attorney was recommended by the signer's attorney.

Application
A document which is often many pages long, commonly referred to as "The 1003". It is used to apply for a mortgage and to provide information regarding a prospective mortgagor and the proposed security. It is common to have errors regarding the borrower's personal information on this document due to carelessness on the part of many lenders.

Appraisal
An estimate of the value of property, made by a qualified professional called an "appraiser".

Appraiser
A person qualified by education, training, and experience who estimates the value of real property and personal property.

Appreciation
An increase in the value of a property due to changes in market conditions or other causes. The opposite of appreciation is depreciation.

Apostille
Authentication document for Hague Convention members.

Application
To become a notary, it is necessary to file an application with your state's notary division. Each state has its own requirements, so please check with your state's notary division. Contact information is available at http://www.123notary.com/statecontact.asp

Appointment
The act of designating an individual for an office or position.

Arbitration Rider
By signing this document, the borrower consents to having an arbitrator resolve all future disagreements regarding the loan rather than settle in court. The arbitrator could show favor to the lender which would not be in the borrower's best interests.

Asset
Anything of monetary value that is owned by a person. Assets include real property, personal property, and enforceable claims against others (including bank accounts, stocks, mutual funds, and so on).

Assignment
The transfer of a mortgage from one person to another.

Assumable mortgage
A mortgage that can be taken over ("assumed") by the buyer when a home is sold.

Assumption
The agreement between buyer and seller where the buyer takes over the payments on an existing mortgage from the seller. Assuming a loan can usually save the buyer money since this is an existing mortgage debt, unlike a new mortgage where additional expenses such as closing costs and new, possibly higher, market-rate interest charges will apply.

Assumption clause
A provision in an assumable mortgage that allows a buyer to assume responsibility for the mortgage from the seller. The loan does not need to be paid in full by the original borrower upon sale or transfer of the property.

Assumption fee
The fee paid to a lender resulting from the assumption of an existing mortgage. The fee is generally paid by the purchaser.

Attest:
To affirm to be true, correct, or genuine; to corroborate.

Attorney in Fact
A person who is given written authority to act on the behalf of another. The document giving the authority is a "power of attorney".

Authenticate:
To prove or verify as genuine. An Authentication certificate is a very important document that is from the Notary's state's Secretary of State or Notary Division that validates that the notary's seal and information are consistant with the information that they have on file. An Appostile has a very similar function to a Certificate of Authentication.

Balloon Mortgage
A Balloon Mortgage is usually a short-term fixed-rate loan which involves small payments for a certain period of time and one large payment for the remaining amount of the principal at a contractually specified time.

Balloon Payment
The final lump sum payment that is made at the maturity date of a balloon mortgage.

Basis Point
A basis point is 1/100th of a percentage point. For example, a fee calculated as 50 basis points of a loan amount of $100,000 would be 0.50% or $500.

Beneficial Interest
Notarizing a document for a family member, or a document in which the notary is named, or has financial interest, could constitute beneficial interest. A Notary should avoid notarizing documents in which he or she has beneficial interest.

Beneficiary
The person designated to receive the income from a trust, estate, deed of trust, or insurance policy.

Birth Certificates
A Notary generally can not certify a copy of a birth certificate. This would be subject to state laws. However, it is common for a signer to swear an oath that a copy of a birth certificate is a true, correct, and complete copy.

Biweekly Payment Mortgage
A mortgage that requires payments to reduce the debt every two weeks instead of the standard monthly payment schedule. The 26 or possibly 27 biweekly payments are each equal to one-half of the monthly payment that would be required if the loan were a standard 30-year fixed-rate mortgage, and they are usually drafted from the borrower's bank account. The borrower can save a substantial amount of interest as a result of this type of mortgage.

Blanket Mortgage
The mortgage that is secured by a cooperative project, as opposed to the share loans on individual units within the project.

Blank Spaces in documents
A Notary should not notarize a document with blank spaces.

Bond
Many states require notaries to carry a surety bond to protect others from any misconduct or mistake. Should the Notary be liable for monetary sums, the bonding company would be liable to pay whatever was owed, and would then go after the Notary to collect the damages.

Borrower's Certification & Authorization
This document has the borrower certify that all the information within the loan application is correct. It also authorizes the lender to share information in the loan application with other parties. It also gives the lender the right to verify information in the loan application, credit application, and employment history.

Breach
A violation of any legal obligation could be called a "Breach of contract".

Bridge Loan
A form of second trust that is collateralized by the borrower's present home (which is usually for sale) in a manner that allows the proceeds to be used for closing on a new house before the present home is sold. Also known as "swing loan."

Broker
A person who brings parties together and assists in negotiating contracts between them for a commission or fee.

Buydown Mortgage
A temporary buydown is a mortgage on which an initial lump sum payment is made by any party to reduce a borrower's monthly payments during the first few years of a mortgage. A permanent buydown reduces the interest rate over the entire life of a mortgage.

Cap
A provision of an adjustable-rate mortgage (ARM) that limits how much the interest rate or mortgage payments can increase or decrease.

Capacity
Refers to the signers official job identity when signing a document. A signer could sign in the capacity of themself as an individual, or as a president of a particular company. Being an attorney is another common capacity.

Capital Improvement
Any structure or component erected as a permanent improvement to real property that increases its value.

Cash-out Refinance
A refinance transaction in which the amount of money received from the new loan exceeds the total of the money needed to repay the existing first mortgage, closing costs, points, and the amount required to satisfy any outstanding subordinate mortgage liens. In other words, a refinance transaction in which the borrower receives additional cash that can be used for any purpose.

Certificate
A written statement, signed by an official, describing acts performed in an official capacity. A notary certificate would generally include a venue which would indicate the state and county where the notary act took place, notary wording indicating who the signer was, the date the notarization took place, a signature of the notary, and additional boiler plate wording would be standard components of the many varieties of notary certificates. Notary certificates could be for many of the possible notary acts and could differ somewhat in content from state to state.

Certificate of Title
A statement provided by an abstract company, title company, or attorney stating that the title to real estate is legally held by the current owner.

Certified Copy
An exact copy of an original document. In California, notaries may only certify copies of power of attorney documents.

Certified Notary Signing Agent
A certified signing agent is one who has been certified by a company that trains notaries. No state government governs or participates in the certifying of signing agents. If a notary identifies themselves as a certified signing agent, it would be useful to ask who they were certified by as standards for education and testing differ widely from company to company. The abbreviation for a Certified Notary Signing Agent is "CNSA".

Chain of Title
The history of all of the documents that transfer title to a parcel of real property, beginning with the earliest existing document and ending with the most recent.

Clear Title
A title that is free of liens or legal questions as to ownership of the property.

Closing
The meeting between the buyer, seller, and lender or their agents where the property and funds legally change hands. Also called a settlement. A loan closing would have a very different meaning.

Closing Accomodation Rider
This document is not in all loan packages. However, if it is in a loan package, it must be signed before proceeding to the other loan documents. This document states that the loan has been conditionally approved and that all information submitted by the borrower is subject to being checked by the lender.

Closing Agent
Closing agents can be the lender, escrow, title, closing service companies, etc. A closing agent actually performs the closing process, which includes, disbursement of funds, the issuing of title insurance, if applicable and recording of the deed. In addition, the closing agent, if a notary, can also notarize the applicable documents in the loan package. With the expansion of the lenders requirements across the nation, the need for a "signing agent " was developed. Many people do not correctly distinguish between a signing agent and a closing agent. The signing agent has only one function which is to supervise the signing and to notarize a few documents included in the loan documents during the signing.

Closing Costs
Closing costs usually include a loan origination fee, discount points, appraisal fee, notary fee, title search and insurance, survey, taxes, deed recording fee, credit report charge and other costs assessed at settlement. The cost of closing usually are about 3 to 6% of the mortgage amount.

Closing Instructions
An outline of the loan package including the terms of the loan, fees, and a list of individual documents within the package. This document may or may not require a borrower's signature. This document could tell you if there are any funds or any other documentation that need to be forwarded to the lender from the borrower. Therefor, this document is very important and should be carefully looked at by the notary when commencing a signing.

Closing Statement
Also referred to as the HUD-1. The HUD-1 is the final statement of costs incurred to close on a loan or to purchase a home. The "HUD" as lenders often call it is often faxed to the notary signing agent at the last minute before a signing.

Collateral
An asset such as a car, boat, or a home that guarantees the repayment of a loan. The borrower risks losing the asset if the loan is not repaid according to the terms of the loan contract.

Co-maker
A person who signs a promissory note along with the borrower. A co-maker's signature guarantees that the loan will be repaid, because the borrower and the co-maker are equally responsible for the payments.

Combination Loan
With a combination loan, you receive a first mortgage for 80% of the loan amount, and a second mortgage at the same time for the remainder of the balance. If avoiding PMI (mortgage insurance) is important to you, consider combination loans.

Combined loan-to-value (CLTV)
The unpaid principal balances of all the mortgages on a property (first and second usually) divided by the property's appraised value.

Commission
1. A document describing the notary's appointment and term of office. 2. The fee charged by a broker or agent for negotiating a real estate or loan transaction. A commission is generally a percentage of the price of the property or loan.

Commitment Letter
A formal offer by a lender stating the terms under which it agrees to lend money to a home buyer. Ths is also known as a "loan commitment."

Common Areas
Those portions of a building, land, and amenities owned (or managed) by a planned unit development (PUD) or condominium project's homeowners' association (or a cooperative project's cooperative corporation) that are used by all of the unit owners, who share in the common expenses of their operation and maintenance. Common areas include swimming pools, tennis courts, common grassy areas, and other recreational facilities, as well as common corridors of buildings, parking areas, areas for entering and exiting, etc.

Community Property
In many states, a form of ownership under which property acquired during a marriage is presumed to be owned jointly unless acquired as separate property of either spouse.

Competence
The ability to understand. A notary should be comfortable that all parties understand what they are signing or affirming, especially when notarizing patients in a hospital who are either elderly, or on medication.

Compliance Agreement ( and Errors and Omissions )
This document is similar to the Errors and Omissions document. Please see, "Errors and Omissions"

Condominium
A real estate project in which each unit owner has title to a unit in a building, an undivided interest in the common areas of the project, and sometimes the exclusive use of certain limited common areas.

Condominium Conversion
Changing the ownership of an existing building that is usually a rental project to the condominium form of ownership.

Conforming Loan
The current conforming loan limit is $417,000 and below. Conforming loan limits change annually.

Construction Loan
A short-term interim loan for financing the cost of construction. The lender advances funds to the builder at periodic intervals as the work progresses.

Consumer Reporting Agency (or Bureau)
An organization that prepares reports that are used by lenders to determine a potential borrower's credit history. The agency gets data for these reports from a credit repository as well as from other sources.

Contingency
A condition that must be met before a contract is legally binding. For example, home purchasers often include a contingency that specifies that the contract is not binding until the purchaser obtains a satisfactory home inspection report from a qualified home inspector.

Contract
An oral or written agreement to do or not to do a certain thing. Notaries would most likely be involved in written contracts although an Affidavit would require an oral oath as well.

Conventional Loan
A mortgage not insured by FHA or guaranteed by the VA or Farmers Home Administration (FMHA).

Convertible ARM
An adjustable-rate mortgage (ARM) that can be converted to a fixed-rate mortgage under specified conditions.

Convertibility Clause
A clause in some adjustable-rate mortgages (ARMs) that allows the borrower to change the ARM to a fixed-rate mortgage at specified time frames after the loan originates.

Cooperative (co-op)
A type of multiple ownership in which the residents of a multiunit housing complex own shares in the cooperative corporation that owns the property, giving each resident the right to occupy a specific apartment or unit.

Correction Agreement Limited Power of Attorney
This document authorizes the lender to make corrections to clerical errors. However, it does not grant authority to anyone to change the terms of the loan.

County Clerk
The county clerk files recorded documents such as deeds. They also file the notary's oath of office and surety bond.

Covenant
A clause in a mortgage that obligates or restricts the borrower. If the covenant is violated, it can result in foreclosure.

Credible Witness:
A believable witness worthy of confidence who can identify a signer who's signature is being notarized. Some states require one credible witness while others require two if the signer does not have proper identification documentation.

Credit
An agreement where a borrower receives something of value in exchange for a promise to repay the lender at a later date.

Credit History
A record of an individual's open and fully repaid debts. A credit history can be used to determine whether a potential borrower has a history of repaying debts in a timely manner. It also informs a lender as to the degree that a borrower's equity is already leveraged and if they have heavy credit card debt or car loans.

Credit Report
A report of an individual's credit history prepared by a credit bureau and used by a lender in determining a loan applicant's worthiness of receiving credit.

Credit Repository
An organization that gathers, records, updates, and stores financial and public records information about the payment records of individuals who are being considered for credit.

Death Certificates
Notaries in most states are not permitted to notarize certified copies of Death Certificates.

Debt
An amount of money owed to another party.

Debt-To-Income Ratio
The ratio, expressed as a percentage, which results when a borrower's monthly payment obligation on long-term debts is divided by his/her net effective income in the case of FHA/VA loans, or gross monthly income in the case of conventional loans.

Deed
The legal document conveying title to a property.

Deed of Trust
Deed of Trust is the security instrument. Gives the lender a claim against the borrower(s)' home if they default on payment. This document is often initialed on all pages. This document is used to secure the payment of a notary. Many states use a document called a Mortgage in its place.

Default
Failure to meet legal obligations in a contract, specifically, the failure to make payments on a mortgage.

Delinquency
Failure to make mortgage payments in a timely manner.

Deposit
1. A sum of money given to bind the sale of real estate. 2. A sum of money given to ensure payment or an advance of funds in the processing of a loan.

Depreciation
A decline in the value of property; the opposite of appreciation.

Discount points
See "Points"

Document
A notary public's job includes notarizing signatures on documents. There could be endless variations in the types of documents that a notary could notarize. It is not the notary's responsibility to understand the documents, but only to perform notary acts according to their state's laws. Loan documents are common documents for notaries to notarize and supervise the signing of. The slang in the loan signing industry for documents is "Docs". A notary may attach a notarial certificate to a document, or the certificate wording could be included on a document.

Document Date
It is common for a document to have a document date written within the body of the text. The date of the signing is often different from the document date. If there is a document date, it is good to record that in your journal when notarizing such a document.

Down Payment
The portion of the purchase price of a property that the buyer pays in cash and does not finance with a mortgage.

Duress
Constraint by threat, or coercion.

Easement
A right of way giving persons other than the owner access to or over a property.

ECOA Antidiscrimination Notice This document states that discrimination on the basis of race, color, marital status, or age is prohbited.

Effective Age
An estimate made by an appraiser of what actual age a property's condition would make it similar to. For example, a new property that was damaged and had many broken components might have a larger numerical value for its effective age than an old building that was meticulously maintained.

Effective Gross Income
Normal annual income including overtime that is regular or guaranteed. The income counted is from all sources combined. Salary is generally the principal source, but other income may qualify if it is significant and stable.

Eighty-ten-ten loan
See "Combination loan".

Electronic funds transfer (EFT)
EFT allows account holders to transfer funds from an account electronically. This method of transfer is highly secure, efficient, fast, and easy to transact.

Embosser
A pliers-like device, that when squeezed together with paper between the jaws, makes a raised impression and indentation on paper. An embosser is used as a protection device and is not an official notary seal; but may be used in addition to the official notary seal. The most sensible use of an embosser is to emboss all pages of all documents notarized by a particular notary. That way, if a document custodian switches a particular page in a document after the notarization, the added page would not have the embosser's impression on it. One salient feature of the embosser's impression is that it can not be photo-copied which is a security feature for the notary who uses it that ensures the notary from counterfit imposters who pretend to be that particular notary.

Encumbrance
Anything that affects, undermines, or limits the value of a title to a property, such as mortgages, leases, easements, or restrictions.

Endorser
A person who signs ownership interest over to another party.

Equal Credit Opportunity Act (ECOA)
A federal law that requires lenders and other creditors to make credit equally available without discrimination based on race, color, religion, national origin, age, sex, marital status or receipt of income from public assistance programs.

Errors and Omissions This document requires the borrower to comply with the lender to make corrections should any clerical errors need to be fixed in the loan documents. This document is similar to the Compliance Agreement.

Escrow
An Escrow company is a neutral third party who carries out the instructions of both the buyer and seller to handle all the paperwork of settlement or "closing". Escrow may also refer to an account held by the lender into which the home buyer pays money for tax or insurance payments.

Escrow account
An account in which a mortgage servicer holds the borrower's escrow payments prior to paying property expenses.

Escrow Analysis
The periodic examination of escrow accounts to determine if current monthly deposits will be able to keep up with taxes, insurance, and other bills when due.

Escrow Collections
Funds collected by the servicer and set aside in an escrow account to pay the borrower's property taxes, mortgage insurance, and hazard insurance.

Escrow Disbursements
Payments out of the escrow account to cover real estate taxes, hazard insurance, mortgage insurance, and other property expenses as they become due.

Escrow Payment
The portion of a mortgagor's monthly payment that is held by the servicer to pay for taxes, hazard insurance, mortgage insurance, lease payments, and other items as they become due. This is known as "impounds" or "reserves" in some states.

Estate
The ownership interest of an individual in real property. The total of all the real property and personal property owned by an individual at time of death.

Eviction
The lawful expulsion of an occupant from a property.

Examination of Title
The report on the title of a property from the public records or an abstract of the title.

Execute
To sign. In the notary context, it would mean to sign a document or "instrument".

Executing Witness
Also known as a subscribing witness. Someone who swears that another particular person signed a document. An executing witness could be use in a "Proof of Execution" notary act.

Expiration
A notary's commission would have an expiration date. The length for a notary's term of office varies from state to state but is most commonly four years. The commission expiration date is usually part of the wording on the notary's seal.

Fair Credit Reporting Act
A consumer protection law that regulates the disclosure of consumer credit reports by consumer and credit reporting agencies and establishes procedures for correcting mistakes on one's credit record.

Family Rider
The Family Rider transfers the owner's right to collect rents to the lender.

Fair Market Value
1. The highest price that a buyer would pay, and the lowest a seller would accept. 2. A value similar to what comparable properties in comparable areas would have.

Fannie Mae
See "Federal National Mortgage Association".

FDIC insured
Federal deposit insurance protects the first $100,000 of deposits that are payable in the United States.

Federal Housing Administration (FHA)
A division of the Department of Housing and Urban Development. Its main activity is the insuring of residential mortgage loan made by private lenders. FHA also sets standards for underwriting mortgages.

Federal National Mortgage Association (FNMA)
Also known as "Fannie Mae". A tax-paying corporation created by Congress that purchases and sells conventional residential mortgages as well as those insured by FHA or guaranteed by the VA. This institution, which provides funds for one in seven mortgages, makes mortgage money more available and more affordable.

FHA Loan
A loan insured by the Federal Housing Administration available to all qualified home purchasers. While there are limits to the size of FHA loans, they are generous enough to handle moderate-priced homes in most parts of the country.

FHA mortgage
A mortgage that is insured by the Federal Housing Administration (FHA). Also known as a government mortgage.

Felony
A crime more serious than a misdemeanor and punishable by a more stringent sentence. Most states will not allow an individual with a Felony, or crime involving dishonesty or moral torpitude from becoming a notary public. Also, certain fraudulent acts by a notary could result in a Felony such as falsifying documents pertaining to real property.

Finder's Fee
A fee or commission paid to a mortgage broker for finding a mortgage loan for a prospective borrower.

First Mortgage
A mortgage that is the primary lien against a property. Please read about subordination agreements to learn which mortgage is primary or secondary against a property.

Float Down Option
An option to choose a lower rate within 30 days before the closing of your loan and "float down" to a lower rate than the previously locked-in rate. This allows you to pick the best rate within that time period.

Flood Insurance
Insurance that compensates for physical property damage resulting from flooding. It is a requirement for properties located in federally designated flood areas.

Flood Zone Notification
This document would only be in a loan package if the lender determined that the property involved is located within a flood plain. If the property was in a flood plain, then this document would require a flood insurance policy to be in force for the life of the loan.

Foreclosure
The legal process by which a borrower in default under a mortgage is deprived of his or her interest in the mortgaged property. This usually involves a forced sale of the property at public auction with the proceeds of the sale being used to pay the mortgage debt.

Forgery
A false signature, written document or other creation made to imitate the true signature, document, or creation, with the intent to defraud. Notaries would be wise to employ the use of thumbprinters when completing journal entrees, becuase you can not forge a thumbprint.

Form 4506 Request for Copy or Transfer of Tax Form
This document authorizes the lender to obtain a copy of the borrower's tax return if a loan is chosen to be audited. It also ensures that the borrowers didn't commit fraud in their application regarding their income and taxes, as well as ensuring that the borrowers didn't submit fraudulent tax returns in their application.

Form 8821 Tax Information Authorization
This document authorizes the lender to contact the Internal Revenue Service for many years of tax reports on the behalf of the borrower.

GINNIE MAE
See "Government National Mortgage Association."
Good Faith Estimate
An estimate of charges which a borrower is likely to incur in connection with a settlement.

Good Faith Estimate
This document estimates what the closing costs will be on a loan but by no means is a final accounting. The HUD-1 Settlement Statement is a final version of what the costs are in a loan.

Government National Mortgage Association (GNMA)
Also known as "Ginnie Mae", provides sources of funds for residential mortgages, and is insured or guaranteed by FHA or VA.

Gross Monthly Income
In the context of loan signing, the total amount the borrower earns per month, before any expenses are deducted.

Hague Convention Nations
There are various Hague Convention Nations who participate in an agreement regarding authentification of notarized documents. If a notarized document is accompanied by an apostille, it can be recognized in any Hague Convention Nation. Nations include: Argentina, Australia, Austria, Bahamas, Beylarus, Belgium, Bosnia-Herzegovina, Bulgaria, Croatia, Cyprus, Czech Republic, Estonia, Finland, France, Germany, Greece, Grenada, Hong Kong, Hungary, Ireland, Israel, Italy, Japan, Latvia, Lesotho, Liberia, Lithuania, Luxembourg, Macedonia, Macau, Mauritius, Mexico, Monaco, Montenegro, Netherlands, New Zealand, Norway, Panama, Portugal, Romania, Russian Federation, Serbia, Slovenia, South Africa, Spain, Suriname, Swaziland, Sweden Switzerland, Tonga, Turkey, United Kingdom, USA, Venezuala, and Yugoslavia.

Hardship Letter - 30 Day Notice
In this document, the borrower agrees that they are aware that their first mortgage payment may be due within thirty days of the signing and that it doesn't create a hardship for them.

Hazard Insurance
A form of insurance that protects the insured from specified losses, such as fire, windstorm, and other hazards.

Hazard Insurance Authorization & Requirements
In this document, the lender requires the borrower to have a hazard insurance policy against losses due to property damage caused by fire, storms, or other types of dangerous events.

Home Equity Line of Credit
A credit line that is secured by a second deed of trust on a house. Equity lines of credit are revolving accounts that work like a credit card, which can be paid down or charged up for the term of the loan. There is a minimum payment due each month which is interest only.

Home Equity Loan
A loan secured by a second deed of trust on a house, typically used as a home improvement loan.

HUD
The U.S. Department of Housing and Urban Development.

HUD-1
Also known as the HUD and the Settlement Statement. Please see, "Settlement Statement"

Identification of signer
State laws differ on what constitutes satisfactory identification of a signer. Generally a government issued identification such as a drivers license, identity card, or passport will suffice. Its generally beneficial if the identity document has a picture, signature, and an expiration date.

Impound
The portion of a borrower's monthly payments held by the lender or servicer to pay for taxes, hazard insurance, mortgage insurance, lease payments, and other items as they become due. It is also common to have Escrow impounded accounts to pay for future anticipated expenses.

Immigration
Please check your state notary laws to see which if any immigration documents you are allowed to notarize. Notaries must not give advice on immigration.

Index
A published interest rate to which the interest rate on an Adjustable Rate Mortgage (ARM) is tied. A few commonly used indices include the 1 Year Treasury Bill, 6 Month LIBOR, and the 11th District Cost of Funds (COFI).

Initial Escrow Account Disclosure Statement
Discusses escrow payments over one year. Shows how taxes and insurance will be calculated during that one year time period.

Instrument
A technical term for a document.

Interest-only Loan Option
Loan payments have two components, principal and interest. An interest-only loan has no principal payments required for a specified period of time. This type of loan minimizes your monthly payments by eliminating the need to pay down your balance during the interest-only period, giving you greater cash flow control and/or increased purchasing power.

Jumbo Loan
A loan which is larger than the limits set by the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation. Because jumbo loans cannot be funded by these two agencies, they usually carry a higher interest rate. A loan of more than $650,000 is refered to as a super jumbo mortgage. Jumbo loans are higher risk than other loans due to the fact that if the borrower defaults, its harder to sell a luxury residence quickly for full price.

Journal of Notarial Acts
Notarial journal prescribed by law in many states to record notarial acts. Some important features of the Notary journal is that the journal should be bound and sequential to deter adding additional entries after the fact as well as detering the suspicion that the notary could have pretended to notarize a document in the past when they didn't. If a fraudulent notarization occurs, which generally could happen once or twice during a busy notary's commission, the first record to be sourced, is the notary's journal. If the journal does not have a record of the notarization, then the notarization can be proven to be false. Another important feature of the journal is to have the ability to record thumbprints which are required in certain states for journal entries regarding property deeds, and even Powers of Attorney. The thumbprint is the most reliable way to identify an individual since it can not be forged. The journal records the date, time, type of notarization, type of document, signers name, address, credible witness information if any, additional notes, notary fee, signature of the document signer, and a thumbprint.

Jurat
Latin, "to swear." A Jurat certificate is signed and sealed by a notary which is affixed below the sworn or affirmed statement and signature of the affiant. Laws for Jurats can differ from state to state. Some states require the affiant in a Jurat to be positively identified while others require the affiant to sign the document in the presence of a notary public.

Jurisdiction
A notary's jurisdiction is generally their state of commission. A notary is almost never allowed to notarize outside of the state where their commission is based. Some notaries have dual commissions, meaning that they are commissioned in more than one state. Louisiana is a unique state where a notary can only perform notary acts in one, or several particular parishes. A military base notary public's jurisdiction would be either a particular military base or any military base.

Lien
An encumbrance against property for money due which could be either voluntary or involuntary.

Lender
The bank, mortgage company, or mortgage broker offering the loan.

Limited Power of Attorney ( LPOA )
Please refer to the "Correction Agreement Limited Power of Attorney."

Loan Application
Please see, "Universal Residential Loan Application."

Loan Document Signer
See "Signing Agent"
Loan to Value Ratio
The relationship between the amount of a loan and the appraised value of the property expressed as a percentage.

Lock Period
An amount of time that a lender will guarantee a loan's interest rate. Once you've locked in the interest rate on a loan, the lender will guarantee that rate for a certain period of time which typically is for 30, 45 or 60 days.

Lock-in
A written agreement guaranteeing the home buyer a specified interest rate provided the loan is closed within a set period of time. The lock-in usually specifies the number of points to be paid at closing as well.

L.S. (locus sigilli)
Latin, "The location where the seal is placed." Used generally to indicate the place for the notary's seal.

Margin
The amount a lender adds to the index on an adjustable mortgage to establish the adjusted interest rate.

Marriage Certificates
Notaries in most states are not permitted to notarize certified copies of marriage certificates.

Maturity Date
A pre-set date informing account owners when they can withdraw principal funds without incurring a penalty. (Please note that you may withdraw any generated interest before reaching an account's maturity date at E-LOAN.)
Military Officer Notarizations
U.S. Military officers on active duty may notarize for any Military personnel anywhere in the world. There doesn't need to be a venue, or serial number, or branch of service or permanent mailing address if those are omitted for security purposes.

Misconduct
Behavior not conforming to prevailing standards or laws.

Misdemeanor
An offense of lesser gravity than a felony for which punishment may be a fine or imprisonment.

Mobile Mobile Notary
A mobile notary residing in Mobile, AL. See "Mobile Notary"
Mobile Notary
A mobile notary is a notary who is accustomed and willing to travel to the signer's location. Mobile notaries often visit offices, houses, hospitals, courts, and jails. Mobile notaries usually charge a travel fee which is not governed by state law in most states.

Mortgage
This document is used to secure the payment of a notary. Many states use a document called a Deed of Trust in its place.

Mortgage Disability Insurance
A disability insurance policy which will pay the monthly mortgage payment in the event of a covered disability of an insured borrower for a specified period of time.

Mortgage Insurance
Money paid to insure the mortgage when the down payment is less than 20 percent.

Mortgagee
The person, company, or entitee who receives the mortgage as a pledge for repayment of the loan. The mortgage lender.

Mortgagor
The mortgage borrower who gives the mortgage as a pledge to repay.

Negative Amortization
Negative Amortization, or "deferred interest," occurs when the mortgage payment is less than a loan's accruing interest. This causes a loan's balance to grow instead of reduce or "amortize."

Name Change
If a notary changes their name, they should check to see what their state's notary laws regarding name changes of notaries. Sometimes, the notary can continue using their existing commission provided that they sign the way their name is on their commission. In other states, it might be necesary to inform the notary division and/or county clerk where their commission is based, or to start a completely new commission with a new seal.

Negligence
Failure to use sufficient care that would be expected of any other person in a similar situation.

Net Effective Income
The borrower's gross income after federal income tax has been deducted.

No Closing Costs
Some loans have no up front closing costs. In such a case, the closing costs are integrated into the loan amount.

Non-conforming Loan
Also called a jumbo loan. A conventional home mortgage that is not eligible for sale and delivery to either Fannie Mae (FNMA) or Freddie Mac (FHLMC) because of various reasons, including loan amount, loan characteristics or underwriting guidelines. Non-conforming loans usually incur a rate and origination fee premium. The current non-conforming loan limit is $333,701 and above.

Notarial act
any act that a notary public of this state is
authorized to perform, and includes taking an acknowledgment administering an
oath or affirmation, taking a verification upon oath or affirmation, witnessing or
attesting a signature, certifying or attesting a copy, and noting a protest of a
negotiable instrument.

Notary Public
An official authorized by law and appointed by a state government to serve the public as a disinterested witness, to take acknowledgments, administer oaths and affirmations, and to perform such other acts as are allowed or required by law. Notaries public typically serve a four or five year term. Notaries are often required to carry a bond, and have a notary seal ( stamp ) and journal. Notaries are generally only appointed in their home state although many states allow an individual to become a notary if they live in a bordering state, or work in their state. Please visit http://www.123notary.com/statecontact.asp for contact information for your state's notary division.

Notary Signing Agent
See "Signing Agent"

Note
The Note is one of the most important loan documents that states the terms of the loan. The Note also discloses whether or not there will be a pre-payment penalty and could have the pre-payment penalty explained in it. In other cases, there is a pre-payment rider included in the loan documents. The Note discloses the interest rate for the loan also. Please do not confuse the rate with the APR as they are calculated differently. Address of the property, loan amount, who the lender is, dates when payments are due, where the payments should be mailed, the amount of the monthly payment in terms of principal and interest, late fees expressed as a percentage.

Notice of Assignement, Sale, or Transfer of Servicing Rights
This document authorizes the lender to transfer the servicing rights to another party. The servicer would be the one to collect monthly payments and handle customer service. It also authorizes the lender to sell the loan to another party which is a common practice. If the loan was sold, the terms of the loan would not change.

Notice of Right to Cancel
See, "Right to Cance.l. This document applies only to principal residences only, and not investment or rental properties.

Notice to Applicant
Right to Receive Copy of Appraisal

Notice to Borrower - Impount/Escrow Account
A document that includes the borrower's escrow account information. Discusses what the borrower's taxes and insurance will cost in addition to principal and interest.

Oath
A solemn pledge or promise containing reference to a Supreme Being. A person who intentionally makes false statements under oath is punishable for perjury. A notary public may administer oaths as a notary act. An oath could also be administered to swear in credible witnesses used to identify a signer being notarized. Some individuals are opposed to taking an oath for religious or idealistic reasons. The legal alternative to taking an oath, is taking an affirmation which does not require any reference to s supreme being.

Oath of Office
Notaries must take an oath of office before receiving their notary commission. The paperwork for their oath must be filed with the county clerk where their commission is based.

Occupancy Affidavit
The Occupancy Affidavit is for the borrower to swear that they will be living in the property they are borrowing for rather than leasing the property to a third party.

Occupancy Affidavit and Financial Status
This is similar to the Occupancy Affidavit in that it has the borrower state that they will be residing in the property as their primary address as opposed to renting it out to another party. It also has the borrower state that there have not been any recent changes to their financial status since submitting the loan application and starting the loan process.

Official Notary Seal
A rubber stamp that all notaries must have that conforms to the laws and rules. A Notary Seal generally includes the Notary's name, county where commissioned, state, the words, "Notary Public", the notary's commission number, and the notary's commission expiration date. The stamp could include some state graphics and a variety of borders such as serrated, double line, scallops, milled edge, or single line. A notary seal could be rectangular or circular and must be an inked stamp, although a secondary non-inked embosser that leaves a raised impression may be used in addition. Not all states require the use of a Notary seal although the ones that don't, generally require that the notary handwrite the same information that would be on the seal.

Owner's Ocupancy Agreement
Similar to an Occupancy Affidavit

Origination Fee
The fee charged by the lender to prepare loan documents, make credit checks, inspect a property, and often appraise a property; usually computed as a percentage of the face value of the loan.

Owner Financing
A property purchase transaction in which the property seller provides all or part of the financing. Owner financing could have less restrictive or easier terms than bank financing.

Payment Letter to Borrowers
The payment letter to borrowers discloses the borrower(s)' actual monthly payment of principal and interest plus any additional payments determined by escrow.

Periodic Cap
The maximum rate increase for a specific period for a specific loan (ARM) only.

Perjury
Making a false statement under oath. Generally punishable by fine and/or imprisonment if made under oath to a public official.

Personally Known
Familiarity with an individual resulting from interactions with that individual over a period of time sufficient to eliminate every reasonable doubt that the individual has the identity claimed. an acquaintance, derived from association with the individual in relation to other people and based upon a chain of circumstances surrounding the individual, which establishes the individual's identity with at least reasonable certainty.

Photograph
A notary can not notarize a photograph. A notary can only notarize signatures. A document could be written about a photograph and the signature on the document could be notarized, and the photograph could be attached.

PITI
Principal, interest, taxes and insurance. PITI is also refered to as a monthly housing expense.

Points
Points are prepaid interest assessed at closing by the lender. Each point is equal to one percent of the loan amount, e.g. three points on a $100,000 mortgage would cost $3,000.

Power of Attorney
A legal instrument authorizing one to act as another's agent or attorney. Powers of attorney require being notarized and the type of notarization wording is generally acknowledgment certificate wording.

Prepaids
Particular expenses of property which are paid in advance of their due date and will usually be prorated upon sale, such as taxes, insurance, rent, etc.

Prepayment Penalty
A charge imposed by a mortgage lender on a borrower who wants to pay off part or all of a mortgage loan in advance of schedule.

Principal
Principal refers to the total amount of money originally deposited into a Savings or CD account. However, when taking out a loan, it refers to the amount of debt, not including interest.

Private Mortgage Insurance (PMI)

Privacy Notice
The Privacy Notice allows for disclosure of information about your credit and employment information based on the information the lender has. The disclosure can not occur without a borrower signature.

Proof of Execution
This notary act takes place when a subscribing witness or executing witness appears before a notary and swears that another particular person signed a document.

Protest
A protest is an antiquated notary act, but is still done on occasion. A Notary could be asked to protest a non-payment.

PUD
Planned Unit Development. It is the comprehensive development plan for a large area. Usually indicating where roads, schools, recreational, office, commercial or industrial and residential areas will be. It could also be the subdivision that has common areas reserved for the use of and commonly owned by the separate lot owners.

Quit Claim Deed
A legal document which transfers a property to the buyer or owner, whatever interests in the property are held by the maker of the deed. A Quit Claim Deed does not guarantee that those interests are valid. By accepting such a deed, you accept the risk that someone may later appear with a valid claim to your property.

Recording Fee
Money paid to the lender for the recording of a home sale with local authorities, thereby making it part of the public records.

Refinancing
The process of paying off one loan with the proceeds from a new loan using the same property as security.

Rescind
In the context of the notary profession, the verb "To resind" would be used when a borrower cancels their loan by rescinding.

Rescission
The act of a borrower cancelling a loan. Please refer to the document called, "The Right to Cancel" for more information.

Resignation
A written statement that one is resigning a position or office.

RESPA Servicing Disclosure
RESPA stands for Real Estate Settlement Procedures Act and is a consumer protection statute. RESPA requires that the borrowers receive periodical disclosures elaborating on the costs involved in the settlement, descriptions of lender servicing, and escrow account information and practices. RESPA also does not allow a number of lending practices that increase the cost of settlement services.

Reverse Mortgage
A type of mortgage typically used by equity-rich seniors, where the lender makes regular tax-free monthly payments to the borrower either for life, or until the borrower sells the property.

Revoke
To cancel or rescind.

Rider
Riders (or addenda) are special attachments (separate sheets) that become part of the contract in certain situations. There could be multi-state riders, prepayment riders, adjustable rate riders, convertable adjustable rate riders, construction riders, etc.

The Right to Cancel
A loan document that gives the borrower the right to Cancel their loan within three days, not including Sundays or Federal holidays. The borrower would be able to fax a request or send a request in writing to cancel their loan.

Sanctions
The penalty for noncompliance specified in a law or decree.

Satisfactory Evidence
Sufficient means of identifying a signer which meets criteria set forth by law.

Seal
In the case of the signer, the seal is their signature. In the case of the notary, the seal is their stamp, but legally could still mean their signature.

Section 32 Mortgages FTC Facts
This document discusses facts regarding how creditors are required to provide full disclosure of the terms of a loan including the annual percentage rate.

Seller carry back
An agreement in which the owner of a property provides financing, often in combination with an assumed mortgage.

Settlement/Settlement Costs
Refer to, "Closing costs"

Settlement Statement ( HUD-1 )
This document is prepared by the closing agent and discloses all fees and costs involved in the loan and is required by Federal Law. It includes the loan amount, loan fees, charges, proration of real estate taxes, and amounts due to and from the borrower(s). It is common for the appraisal fee(s) and credit report fees to have already been paid. Previously paid fees should be documenented as paid by noting the initials, P.O.C. which stands for paid outside the closing.

S.S. (scilicet)
Latin, "to wit, namely." Printed near the venue of a certificate or acknowledgment. Not to be confused with the Yiddish phonetic equivalent meaning, "Eat, eat".

Signature by Mark
Elderly or disabled signers sometimes do a signature by mark is they are unable to complete their normal signature. Signature by mark usually constitutes signing with an "X". There is a procedure involved using subscribing witnesses. Please check your state notary law to see if you are allowed to notarize this type of "mark". Please see, "subscribing witnesses"

Signing Agent
Before the 1990's, Signing Agents were virtually unknown. Borrowers were expected to travel to the office of a lender, escrow agent or title firm to complete a loan. However, during the past decade, increasing competition in the lending market, a massive volume of refinancing and home-equity loans and demand for faster, more customer-friendly services changed how loan transactions are conducted. Lenders now strive to make transactions as simple as possible and reduce a borrower's travel time during the work week. Therefore, the Mobile Notary came into existence. Another motivating factor for the lenders is that the Notary can eliminate the necessity for the borrower to take up the lender's time during the signing, hence freeing up the lender's schedule for focusing more on creating more loans. A Signing Agent can point out which page certain pieces of information are on. However, the Signing Agent or "Signer" can not explain the terms of the loan or explain documents since that could be considered giving legal advice which is not legal unless you are an attorney of law. A Signing Agent is not a real agent as they are almost always an independant contractor who is self-employed. It is prudent to inform the borrowers that you work for yourself and have no involvement with the lender outside of assisting signing the documents.

Signature Affidavit
A document where a borrower can state all of their name variations. This can be very helpful should the borrower sign the other documents with a variation their signature, such as adding or subtracting a middle initial, or signing with a maiden name.

Signing Service or Closing Service Companies
A company who subcontracts signing appointments to individual Notaries who engage in Loan Document Signings for signing of loan documents and notarization. The sole purpose of this type of company is to act as a go-between company, between the client, title or escrow company, and the notary public. A signing service company can be local, statewide, multi-state or nationwide in ther service offerings.

Subordination
If you are refinancing your first mortgage and have an existing second or home equity line, one could "subordinate" the second mortgage: request that your second mortgage holder go back into the second lien position when you replace your existing first mortgage with the new refinance loan. The Subordination Agreement is the document used for this purpose.

Subscribe
To sign, to write one's signature. The word subscribe is part of many states' Jurat wording where the phrase or similar phrase, "Subscribed and sworn to before me this ____ day of ______ ".

Subscribing witness
A witness who witnesses a person signing by "X" who according to certain state's laws is required to assist in the signing by signing the signer's first or last name in the journal as well as the document while a second subscribing witness would be necessary to sign the other half of the person's name. Subscribing witnesses would only be used when the signer is physically challanged in their ability to sign properly. A subscribing witness could also be used in a "Proof of Execution" to swear that another particular person signed a document"

Surety Bond
See "Bond"

Suspend
To cause to stop for a period; interrupt.

Swear
To make a solemn promise; to vow, usually before God. Jurat wording includes the phrase, "Subscribed and sworn to before me ..."

Tenants in common
An undivided interest in property taken by two or more persons. The interest need not be equal. Upon death of one or more persons, there is no right of survivorship.

Term
The length of time your money must remain in a CD without incurring an early withdrawal penalty. This term also refers to the period of time that covers the life of a loan.

Testimonium clause
At the end of many documents and certificates that follows the form "witness my hand and seal" or some variation thereof.

Thumbprint
It is required in some states that journal entrees concerning notarizations of deeds affecting real property or Powers of Attorney have a thumbprint. Its generally prudent to take thumbprints for all signatures notarized simply becuase the thumbprint can not be forged and is the only completely reliable source of identification.

Title
The evidence one has of right to possession of land.

Title Insurance
A policy, usually issued by a title insurance company, which insures a home buyer against errors, defects, liens, or encumberances in the title serach. The cost of the policy is usually based on the value of the property.

Title Search
Research into the history of ownership of a property to check for liens, unpaid claims, restrictions or problems, to prove that the seller can transfer free and clear ownership.

Total Debt Ratio
Monthly debt and housing payments divided by gross monthly income. Also known as Obligations-to-Income Ratio or Back-End Ratio.

Truth in Lending
A federal law requiring disclosure of the Annual Percentage Rate to home buyers shortly after they apply for a loan. The Truth in Lending loan document is the document that is the first place to look for the APR.

Uniform Residential Loan Application
A document which is often many pages long, commonly referred to as "The 1003". It is used to apply for a mortgage and to provide information regarding a prospective mortgagor and the proposed security. It is common to have errors regarding the borrower's personal information on this document due to carelessness on the part of many lenders.

Variable Rate
An interest rate that could change once an account is opened.

Venue
1. The place where the act is performed. 2. The place on the certificate that gives the state and county where the notarization was performed. 3. The place where a trial is held.

Verification
A confirmation of the truth of a theory or fact.

Veterans Administration (VA)
A government agency guaranteeing mortgage loans with no down payment to qualified veterans.

W-9 Request for Taxpayer ID Number & Certification
This document is a tax form used to verify and state a person's social security number. In a loan package, the borrower must state their social security number and sign this form.

Waiver of Fees
A statement which waives or gives up the right to charge for notarial services.

White Out
A form of a liquid white ink use to cover up errors in paper work. Never use white out in notary or loan signing work.

Wills
Notaries in most states should not notarize a will unless given specific instructions by an attorney and/or given notarial wording included in the document which could constitute an instruction to notarize in some states.

Witness
A person who watches an action take place. In the notary profession there can be witnesses who watch someone sign a document. There can be credible witnesses who identify a signer. There can also be subscribing witnessses who are involved with participating in and witnessing a signing by "X".

X, Signing by "X"
See, "Signature by Mark."

Yield
See, "Annual Percentage Yield (APY)."

Zero Closing Costs
See, "No Closing Costs."