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

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Common Terms 1   Common Terms 2

Cap

A cap is 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...

Capital Improvement

Any structure or component erected as a permanent improvement to real property that increases its value. Building a deck on a house could be said to be a capital improvement.

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...

Certificate

A certificate is 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...

Certificate of Title

A Certificate of Title is 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. In addition to identifying the current owner, a...

Certification

Formal proof, generally in the form of a certificate verifying that something is genuine or true, such as title to a property. Many notary websites offer signing agent certification which...

Certified

A document or fact that has been verified, proven correct, or attested to. To have passed a test that verifies that an individual meets a particular standard of knowledge.

Certified Copy

An exact copy of an original document. In California, notaries may only certify copies of power of attorney documents. Another type of certified copy is called a certified copy by document custodian which requires...

Certified Copy by Document Custodian

A certified copy by document custodian is a type of Jurat notarization which can use a specific form with wording that is ideal for a signer to swear to the correctness and completeness of a copy of a particular document.

Certified Notary Signing Agent

A certified notary 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...

Certify

To verify or attest to the correctness of a document or a fact. For a notary public to attest to teh correctness and completeness of a document. For an agency to formally recognize the knowledge or capabilities of an ...

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. In the film industry, the chain of title involves a series of...

Clear Title

A title that is free of liens or legal questions as to ownership of the property is a clear title. It is critical to know if a property has a clear title when making a purchase to avoid any legal issues. Commonly a buyer will...

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. The Closing Accomodation Rider states that the loan has been...

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...

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...

Closing Instructions

An outline of the loan package including the terms of the loan, fees, and a list of individual documents within the package. The closing instructions may or may not require a borrower's signature. The closing...

Closing Statement

A 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...

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...

Combined loan-to-value

The unpaid principal balances of all the mortgages on a property (first and second usually) divided by the property's appraised value. Combined loan to value is a ratio used by lenders to determine how risky a...

Commission

A document describing the notary's appointment and term of office is a notary commission. A notary commission is good for several years, but the exact duration varies from state to state. A California...

Commitment Letter

A commitment letter is a formal offer by a lender stating the terms under which it agrees to lend money to a home buyer. A commitment letter is also known as a "loan commitment", firm commitment, or a...

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...

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. Division of community property...

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

This document is similar to the Errors and Omissions document. Please see, "Errors and Omissions". The compliance agreement has the borrower agree to cooperate should there be any changes to any...

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. In the case of a condominium conversion, a single property would be divided into a property...

Condominium Rider

A Rider to a Mortgage where specific terms relating to condominiums are discussed. A condominium rider would very likely be used for any loan that was for a property that was a condominium.

Conforming Loan

The 2009 conforming loan limit is $417,000 and below. Conforming loan limits change annually. The maximum loan amount is determined based on the October-to-October changes in median home price, above which a mortgage...

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. A construction loan would typically be paid off once...

Consumer Reporting Agency

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...

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) would be considered a conventional loan. There are various types of conventional loans. There are fixed rate...

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. With a convertibility clause in a...

Convertible ARM

An adjustable-rate mortgage (ARM) that can be converted to a fixed-rate mortgage under specified conditions. The conversion of a convertible ARM would be possible at certain specified points in the life of...

Coop

Same as a cooperative. 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...

Cooperative

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...

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. The Correction Agreement Limited Power of Attorney...

County Clerk

The county clerk files recorded documents such as deeds. They also file the notary's oath of office and surety bond. The office withint the county clerk's building that keeps the recorded documents is called the...

County Recorder

An office in the county clerk's office that records official documents. The county recorder records oaths of notaries public, as well as keeping records of notarized deeds of trust and other deeds effecting...

Covenant

A clause in a mortgage that obligates or restricts the borrower. If the covenant is violated, it can result in foreclosure. A type of contract in which the covenantor makes a promise to a covenantee to do or not do....

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...

Credit

An agreement where a borrower receives something of value in exchange for a promise to repay the lender at a later date. The provision of resources by one party to another party where the second party does not reimburse the...

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...

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.

Creditor

A person or entity who offers credit such as a mortgage company, bank, lender, or credit card company. A creditor is a party to whom money is owed. Debtors are the party who owe money.