Crazy Escrow Language
Updated February 16, 2012
Escrow lingo can be an alien one at times. Sometimes, in my excitement, I forget that the person I am talking to may not be as conversant with it and, with the added language or cultural difference, what I am telling them may make absolutely no sense. Escrow has its own particular vernacular, made up of acronyms, synonyms and short hand, at times quite different from the real estate terms used by professional real estate agents. Next time you talk to me and I ramble on about “pres” and “benes” and “zero demands”, you will know exactly what I am trying to say!
| 1099 | IRS form issued by Escrow to Seller to report the sale of the transaction for income tax purposes |
| 9-A | City of Angeles 9-A Residential Property Report |
| ADJUSTABLE | A type of loan where interest rate is not fixed |
| AIR form | American Industrial Real Estate commercial real estate purchase contract form |
| AITD | All Inclusive Trust Deed – a type of loan given by Seller to Buyer |
| ALTA policy | American Land Title Association policy of title insurance. Usually means the policy insuring the new Lender of a property |
| APN | Assessor’s Parcel Number – identification number assigned to each property by County Tax Assessor |
| APR | Annual Percentage Rate – loan term used to describe the annual interest rate |
| ARMs | Adjustable Rate Mortgage. See “Adjustable” |
| BENE | Beneficiary – the person or entity who lent the money on the property; the Lender |
| BONAFIDE | Real, legitimate, in good faith and without fraud |
| BPO | Broker Price Opinion letter – Document provided by Real Estate Broker showing the value of the property, for a Short Sale Lender |
| CAR contract | California Association of Realtors purchase contract form |
| CC&Rs | Covenants Conditions and Restrictions setting out limitations and conditions of the property |
| CDA | Commission Disbursement Authorization – authorization from Real Estate Broker on how to disburse commission at closing |
| CLOSED | The status of a file when all documents have been recorded and ownership and new loan is transferred |
| COE | Close of escrow – the date of closing of transaction |
| CONDO | Condominium – A property that is part of a unified development complex that has an association to manage the complex. Can be a home or commercial property. |
| CONFIRMED/ CONFIRMATION | Acknowledgement that all documents are recorded and ownership and new loan is transferred |
| CPL | Closing Protection Letter – letter from Title Company to Lender to acknowledge responsibility for loss incurred for failure to follow lenders instructions at closing |
| DEED | The Grant Deed – the document that transfers the ownership of a property (see our FAQ) |
| DEMAND | The document issued by a lienholder that states how much needs to be paid |
| EASEMENT | A right or interest placed on the property to benefit someone else |
| EDD | Employment Development Department – California government agency which handles employee/employer taxes |
| EI | Escrow Instructions |
| ENCUMBRANCE | A debt or a claim against a property |
| ENDORSEMENT | A document attached to the title or other insurance policy which adds to or subtracts from the standard insurance coverage |
| EOI | Evidence of Insurance – proof required by Lender that there is or will be insurance on the property |
| ESCROW ACCOUNT | Term used by Lender, same as Impound Account. See “Impounds” below |
| EXCEPTIONS | An item now existing on the property which the Title Company WILL NOT insure on |
| FANNIE MAE | Federal National Mortgage Association aka FNMA – government sponsored entity to provide money for loans to financial institutions |
| FEE (title) | Type of ownership to property (as compared to “leasehold”) |
| FHA | Federal Housing Administration – government agency under HUD used to insure loans made by financial institutions |
| FIRST | Means the first loan on the property (adjective) |
| FIXED | A type of loan where interest does not change through the life of the loan |
| FREDDIE MAC | Federal Home Loan Mortgage Corporation aka FHLMC – government sponsored enterprise to buy loans from financial institutions and sell them as mortgage backed securities |
| FTB | Franchise Tax Board – California’s government entity that collects personal and corporate income taxes |
| FUNDING | The status of a loan in which the Lender is ready to release the money they are lending |
| GD | Grant Deed – the document that transfers ownership (see our FAQ) |
| GFE | Good Faith Estimate – required document provided by Loan Officer to disclose fees |
| GRANTEE | The person who is receiving the property |
| GRANTOR | The person who is selling or giving the property |
| HECM (pronounced as “hekem”) | Home Equity Conversion Mortgage – Reverse Mortgage program administered by FHA |
| HELOC | Home Equity Line of Credit – A line of credit mortgage against property which borrower can draw upon and/or payback any time during the term |
| HOA | Homeowners Association – the group of owners who manage the condominium project |
| HPP | Home Protection Policy aka home warranty plan. Insurance protection for building and fixtures |
| HUD | The Department of Housing and Urban Development. Government agency which is responsible for programs for the housing market, like FHA |
| HUD-1 | Nationwide standardized closing statement established by HUD to transmit fees and closing costs to Buyers and Sellers |
| IMPOUNDS | Loan term used to describe amounts collected by Lender for taxes and/or insurance along with the month payments |
| JT | Joint Tenancy – type of vesting to hold title in real property |
| JUDGEMENT | A Court approved lien that is filed against a person who owes money |
| JUNIOR (to) | A loan that is behind one or more loans that were recorded before it |
| JURAT | The form used by Notaries when notarizing a party who has to swear under Oath |
| L&V | Legal and Vesting – a document that shows the present legal description and ownership of property |
| LEGAL | Legal description – the location of the property on the County maps |
| LIENS | A debt against a person or a property |
| LIS PENDENS | “Notice of Pending Action” or “Pending Litigation.” When this notice is recorded, it gives a warning to everyone that there is an ongoing dispute involving the property |
| LLC | Limited Liability Company |
| LP | Limited Partnership |
| MIP | Mortgage Insurance Premium – insurance required for FHA loans to offset any losses by lender if loan cannot be repaid |
| MORTGAGE | The loan on the property |
| NHD | Natural Hazards Disclosure report |
| OA | Owners Association – same as Homeowners Association, but for commercial properties |
| OWNERS (policy) | Policy of title insurance that insures the new Buyer’s ownership of property |
| PAYEE | The person who is getting paid |
| PAYOR | The person who has to pay |
| PCOR | Preliminary Change of Ownership form – to be attached to any transfer of ownership deed that is being recorded |
| PD | Professional Designation given to Escrow people who have passed the tests given by the California Escrow Association |
| PITI | Principal, Interest, Taxes, Insurance – the main payments of a property owner |
| PMI | Private Mortgage Insurance – insurance paid by Borrower on non-FHA conventional loans to offset any losses by lender if loan cannot be repaid |
| POA | Power of Attorney |
| POINTS | A fee charged by lender for the loan. 1 point equals 1%. Separate from any other fees |
| PRE or PRELIM | Preliminary report issued by the Title Company to show who owns the property, the liens, and what are the exceptions that won’t be insured |
| PREFIGS | Preliminary figures for costs and payoffs provided by Title Company before the actual closing |
| PRIOR TO DOCS | Lender required conditions that have to be met before loan documents can be issued |
| PRIOR TO FUNDING | Lender required conditions that have to be met before the loan can be funded |
| PROBATE | Process of submitting to the Court for approval of the sale of property where owner has passed away |
| PRORATE / PRORATION | Dividing charges between Buyer and Seller so that each pays their share based on the time of ownership of property |
| PSA | Purchase and Sale Agreement |
| PUD | Planned Unit Development – Single family home that is part of a unified development which may have an association that manages the complex |
| PULLED | When a recording did not go through because of a last minute problem at the Title Company or at the County Recorder’s |
| QUITCLAIM | The document used to transfer certain interests in the property (see our FAQ). OR, as a verb – the act of giving up interest |
| RECON | Reconveyance – release document used to show a loan is paid in full |
| RECORD | The action of recording a document at the County Recorder’s offices to make it of public record (verb) |
| REO | Real Estate Owned – properties foreclosed and now owned by financial institutions |
| RELEASE(S) | Noun – The document used to show a lien is paid and no longer affects the property |
| RESPA | Real Estate Settlement Procedures Act – passed by government to monitor lending and settlement practices against consumers |
| RIDER | An attachment to a document, normally, an attachment to the Deed of Trust |
| SBE | State Board of Equalization – California government entity which collects sales and other use and products taxes |
| SECOND | Means the second loan on the property (adjective) |
| SERVICER | Servicing Agent. The institution that is collecting the payments for a loan on behalf of the actual Lender. |
| SFR | Single Family Residence |
| SI | Statement of Information – a form to be completed by parties in escrow stating certain personal information |
| SINGLE | Never been married (different from “unmarried”) |
| SUBJECT TO | (1) Conditions that have to be met first (ie: “subject to” the following); (2) Loans that will remain (ie:”subject to” first trust deed loan) |
| TC | Tenants in Common – type of vesting to hold title in real property |
| TD | Trust Deed or Deed of Trust – the document which secures a loan on the property |
| TIL | Truth In Lending disclosure – required document provided by Loan Officer to disclose the terms and conditions of a loan |
| TERM | Time period, usually used to state the length of a loan |
| TERMS | The conditions of an agreement, contract, loan |
| TITLE | Name of the person or entity who owns or has interest in the property |
| TRUST DEED | See “TD” |
| TRUSTEE | The third party in a Trust Deed (see above) who will issue the Recon (see above) |
| TRUSTOR | The person or entity who owes the money on the property; the Borrower |
| TRUST CERT | Trust Certification – document to be completed by Trustee that reflects the status of the Trust Agreement |
| UNDERLINING DOCS | The actual recorded documents that describe the items summarized on a preliminary report |
| UNDERWRITER | The person at the Lender institution who reviews the loan file to see that all the requirements to approve the loan are submitted before loan is formally approved (different from loan officer) |
| UNINSURED DEED | A grant deed or quitclaim deed that was recorded without benefit of title insurance to back it up |
| UNMARRIED | Married before but presently not married (different from “single”) |
| VESTING | The manner in which ownership is held by person or entity has on property, for instance, “joint tenants” or “community property” or “tenants in common” |
| ZERO DEMAND | A payoff statement from Lender to show the amount to be paid is $0.00 or that the loan was paid in full |
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