Important Terms Concerning Title Companies
The following are some terms relating to titles and title companies:
Acceleration Clause: An acceleration clause is a condition of some mortgage or loan agreements. An acceleration clause gives the lender the option to demand full, immediate repayment of the entire outstanding loan amount if the conditions of the mortgage or loan are breached. A breach of contract can include late or missed payments.
Cloud on Title: A cloud on title occurs when a claim or encumbrance has been made in regards to a title that, if true, may impair the title’s validity. This typically applies to real estate.
Conveyance: A conveyance is a document, such as a deed, that passes the ownership of real estate from one individual to another.
Deed: A deed is a document that passes ownership of property from one individual to another.
Lien: A lien is a claim to property or a possession by a lender. Liens are often obtained by lenders to ensure the repayment, typically including interest, of a loan. All liens must be settled before the property or possession can legally be sold to another person.
Note: A note is a legal agreement that the signer will pay another person or company a preset amount of money by a preset date. The individual or company owed may also be able to collect the outstanding debt upon demand. This agreement typically includes interest.
Title Defect: A title defect can be a claim that will affect the ownership of a property. A title defect can also be a discrepancy in the execution – or a part of the execution – of a chain of title.
Title Insurance Policy: A title insurance policy is important for owners of property or titled possessions. A title insurance policy helps grant the owner protection from claims against the current ownership of a title.