Glossary
Glossary
24 Month Chain
Information included in our title commitment that shows the chain of title as it has occurred over the past two years including changes in title made by the filing of deeds, quitclaim deeds, and divorce decrees.
Adobe Sign
Program utilized by Legacy to allow us to send out documents to clients to electronically sign and complete so they can avoid having to print and scan back. This program allows signors to sign easily from their phone/tablet/computer and provides updates and reminders to the client if they have not provided all of the information/signed all documents sent to them.
Alta
Also referred to as the Settlement Statement. This is a document generate that typically goes with a Closing Disclosure (CD) at the closing for both buyers/sellers. The document is required by title companies and shows a breakdown of all fees charged and credited to the buyer and/or seller at closing.
Affidavit of Trustee (AOT)
Document prepared and typically recorded with the county that the property resides in. The affidavit serves to confirm that the required number of trustees are entering into the transaction and the addresses and names of each trustee required to act on behalf of the Trust. The affidavit also confirms that the trust has not been terminated or revoked, and if the trust is under court supervision. This document is typically needed when title is vested in the name of a trust instead of individuals
Certificate of Trust (COT)
Document prepared and typically recorded with the county that the property resides in. The Certificate serves to prove the individuals who can act on behalf of the trust, the existence of the trust, and any limitations (IE if the trust has been previously revoked or is currently supervised by the courts. This document is typically needed when title is vested in the name of a trust instead of individuals.
Closing Disclosure (CD)
Document required by the lender on all transactions that shows a full breakdown of all fees charged and credited to the buyer and/or seller at the time of closing. The lender will prepare a final Closing Disclosure (CD) for most purchases, and the title company will generate a Sellers Closing Disclosure (CD) for the seller.
Closing Notice (CN)
Document generated by the title company to send to all represented and involved parties providing details of the time, location, and items needed to be brought to closing. On Sale files, this would be sent to both the listing agent and the sellers. On purchases, this would be sent to buyers, lenders, buyers’ agents, and coordinated with the seller’s title company.
Closing Protection Letters (CPL’s)
Letter that is generated that provides added protection to the lender on purchase/refinance transactions against errors made by the closing agent.
Commitment
Also referred to as title commitment, or title work. The commitment is a comprehensive document prepared by the insuring title company that outlines all the items that need to be cleared, this may include open mortgages, judgments, liens, tax information and how vesting should read for both buyers and sellers. Commitments will also include information for the lender including the sales price, loan amount, and the 24-month chain of title.
Certificate of Release (COR)
Document completed by a previously insuring title company or bank that shows proof that a lien/mortgage has been paid off. COR’s are sometimes filed in lieu of a satisfaction of mortgage to clear old mortgages that were not properly satisfied by the mortgage company.
Deed
Conveyance document required on any purchase/sale transaction that is recorded with the county. A deed serves to convey title and the property to the new buyer(s) on the transaction being closed. Type of deed will vary depending on how the Grantor(s) is in title (ex: Warranty Deed, Trustees Deed, Personal Representative’s deed). This document is signed and notarized by the Grantor(s) in a transaction (sellers) and must contain the proper legal description and marital statuses for the Grantor(s).
DocuSign
Program utilized by both agents and title companies that allow them to send out documents to clients to electronically sign and complete so they can avoid having to print and scan back. This program allows signors to sign easily from their phone/tablet/computer and provides updates and reminders to the client if they have not provided all the information/signed all documents sent to them.
Dues Current Letter (DCL)
Prepared statement by a homeowner’s association (HOA) outlining the current balance, recurring fees, and additional fees (account setup, fee for preparing statement, etc.) that are required to be collected at close. This document will also show current outstanding/past due balances and will include instructions on what needs to be done post-closing.
Earnest Money (EM)
Also referred to as Earnest Money Deposit (EMD, or Down Payment (DP). This will be broken down in the Purchase Agreement (PA), typically on the first page under the buyer’s names. This is the amount of money the borrower provides to the seller’s side (typically the listing agents brokerage) after an offer (purchase agreement) is accepted.
Electronic Real Estate Value (eCRV)
Form completed online for every purchase of real estate property that documents the details to the state regarding the sale information, and contact information for both buyers and sellers. All purchases where consideration is over $3,000.00 must have an eCRV completed. The buyers title company will handle the completion/filing of the eCRV
Endorsement
Addition to title insurance coverage that is attached to the title insurance policy. These provide additional coverage to fit the needs of the insured for the specific transaction.
E-Return (WI Equivalent to eCRV)
Form completed online for every purchase of real estate property that documents the details to the state regarding the sale information and contact information for both buyers and sellers. The state of Wisconsin will require an E-return done on ANY transaction that has a conveyance document being recorded (deed) regardless of total consideration.
Errors & Omissions Letter (E&O)
Insurance carried that helps protect from lawsuits/allegations claiming that a mistake was made during a transaction or services performed. Some lenders will require us to send our E&O letter to them with the commitment packets. This is automatically loaded into all purchase/refinance files in the Commitment Package folder
E-Sign
Term used to refer to someone signing electronically versus printing our and wet signing the documents and scanning back or providing originals. E-signing means that there will be no physical original, only a digital copy to be utilized for files.
Grantee
Grantee is a term that typically refers to the buyer in a transaction or the party purchasing the property or being conveyed interest from the Grantor
Grantor
Grantor is a term that typically refers to the seller in a transaction or the party conveying their interest to another party.
Homeowner’s Association (HOA)</span
Organization that manages certain aspects of an area/neighborhood. Pertaining to Title, the Homeowner’s Association (HOA) will pertain to certain recurring fees that are collected at closing from buyer and/or seller and prorations given accordingly. Fees might include recurring dues, account setup fees, etc. See also; Dues Current Letter (DCL)
Homesteading
Homesteading process is completed post-close by the buyers on a transaction if they intend to use the property as their primary residence. Homesteading the property offers a break in property taxes owed if the application is completed by the cutoff (typically December 1st). Instructions on how to homestead will be discussed with the buyers at closing by the closer, and instructions will vary by county.
Home Warranty (HW)
Contract that covers repairs and/or replacements on appliances, systems, or defects with the house based on the purchased contract coverage. Typically, the policies are purchased for the duration of the year. Title Companies do not order these; however, the agents, buyers, or sellers may elect to purchase one based on the terms in the Purchase Agreement and require them to be collected at close. The Purchase Agreement will indicate whether a home warranty is being obtained (usually on page 9).
Lenders Title Insurance (LP)
Title insurance that lenders require be charged to the buyer on purchase/refinance transaction. This insurance protects the lender against issues with the title to the property we are closing/insuring.
Letter of Indemnity (LOI)
Letter prepared regarding a cloud residing on the title of a property. This letter indemnifies both the title company and underwriter and states that the previously insuring title company will assume responsibility for issues that would arise pertaining to that specific title issue. This letter is typically prepared by the title company that closed and insured the property that put the current owners into title.
Lien Waiver (LW)
Form completed by a subcontractor or individual that conducted work on a property. This form will outline the amount the work was completed for, and if the work is considered full and final or a partial payment only. These are required for any work done on a property in the last 120 days from the date of closing.
Mortgage (MTG)
Document prepared by the lender when a borrower is taking out a loan that enters the buyer into an agreement with their lender. This agreement gives the lender the right to take the property if the buyer fails to repay the money owed plus the accrued interest. The mortgage will include the borrowers’ names how they will be taking title, marital statuses, date, and full amount of the loan that the lender is agreeing to provide to the borrower.
Mortgage Registration Tax (MRT)
Tax collected and paid to the county that the property resides in. This tax is based on the loan amount. This fee should automatically populate on any file that contains a lender/loan amount entered and is automatically calculated based on county/loan amount. This fee is paid by the buyer at closing.
Owner’s Policy (OP)
Also referred to as Title Insurance or Final Title Policy. This is a one-time fee for Insurance issued typically in the amount of the real estate purchased and lasts for the duration that the purchaser owns the property. This insurance protects the buyer in the event of issues that arise pertaining to the title of the property. Examples include someone claiming to have an interest in the property after closing, mechanic’s liens, prior owner mortgages.
Payoff Authorization
Also referred to as Borrower’s Authorization. Document sent at the same time as the Seller Info Sheet that the seller must complete to obtain any payoffs for mortgages showing on the title of the property. This document may also be used in refinances if the lender requires that the title company orders the payoffs.
Payoff (PO)
Mortgage that was recorded on the property being insured that has not yet been paid in full, wherein a statement must be obtained from the mortgage company showing the balance to pay the mortgage in full and close the mortgage/release the lien from the property. Payoffs are typically obtained by phone or fax and will require information to obtain it (include but not limited to SSN, loan numbers, and address)
Plat
Sketch/drawing ordered that shows all existing buildings on the property, as well as drainage/utility easements that might run through the property. The plat may also show structures that encroach on neighboring properties. Lenders will require plat drawings for all purchases, and some lenders will require them for refinances.
Power of Attorney (POA)
Document that can be utilized on most purchase/sale/refinance transactions. The power of attorney is prepared to elect an individual(s) to sign on behalf of one of the parties involved in the transaction if they are unable to be present for the closing. This gives the elected individual authority to sign most documents needed including conveyance documents for the specified property that is being closed. Power of Attorney’s can be drafted by Legacy Title, or in some cases the parties involved have already prepared power of attorneys.
NOTE: if power of attorney’s is needed to borrowers taking out a mortgage the lender must approve these.
NOTE: if power of attorney’s is needed for recorded documents (deed or mortgage), then they must be recorded with the county the property is closing in an appropriate recording fees need to be collected at closing.
Promissory Note (Note)
Document prepared by the lender on files that have a mortgage being recorded. This document is signed and acknowledged by the buyer(s) and promises to pay back the loan in accordance with the terms outlined in the Note. Terms include principal amount, date and location of issuance, maturity date, and interest rate. This document does not get recorded.
Purchase Agreement (PA)
Document outlining the purchase price and other conditions associated with the transfer of title. Real estate purchase contracts contain critical information, including the purchase price, mortgage contingency provisions, the earnest money deposit, down payment requirements, and many other terms that summarize the conditions of the transfer of title or sale.
Remote Online Notary (RON)
Service used by some lenders and title companies that allow their buyers or sellers to sign remotely without needing to attend a physical closing. RON closings work with an e-notary to go over and sign documents via video chat instead of needing to attend a physical closing and wet sign documents. When using RON closings, it is important to note that there will not be physical copies of the documents received and there will not be wet signatures. Digital copies are received with a digital notary stamp.
Resale Disclosure
Document required on properties that are part of a Homeowner’s Association (HOA). This document is typically ordered by the seller or listing agent and provided to the buyer prior to closing for their review. Resale Disclosures outlines certain rules/regulations, amounts due and the frequency, and general legal information pertaining to the HOA. NOTE: this document is not the same as a Dues Current Letter.
Satisfaction of Mortgage (SAT)
Also referred to as a Release. This is a document that is recorded at the county to release a mortgage/lien that was previously filed on the property and has since been paid off. The mortgagee (lender that was listed on the mortgage) will typically prepare the SAT for closing.
Seller Info Sheet (SQ)
Document sent by the seller’s title company that is completed prior to closing that is used to obtain pertinent information pertaining to the closing. Information includes mortgage contact information for any payoffs that need to be obtain, HOA contact information, contact information for the seller, marital status changes
Seller Paid Closing Costs (SPCC)
Also referred to as Seller Credit, this is an amount of money determined by buyers/sellers and negotiated typically by agents that is credited to the buyer from the seller out of their proceeds at closing.
Special Assessments
Also referred to as Assessment Search. A report ordered that provides detail and amounts due for any assessments the city has levied (currently owing), certified (added into property taxes), or pending (not yet payable but future owed). Assessments showing on a report may need to be addressed on the settlement statements at the time of closing.
State Deed Tax (SDT)
Tax collected and paid to the county that the property resides in. This tax is based off the sales price of the property and is paid by the seller on the transaction. State Deed Tax is automatically collected on purchases/duals and sales. If a property has an additional deed (ex: QCD removing someone from title) and the consideration is less than $3,000.00 (no buyouts, etc) then State Deed Tax is not based on the sales price but on the below breakdown.
SDT Calculation:
Hennepin & Ramsey County: Sales Price x .0034
All other Counties: Sales Price x .0033
For Properties with less than $3,000.00
Hennepin & Ramsey: $1.70
All other Counties: $1.60
Title Order (TO)
Document sent by the lender on a Refinance/Purchase file that outlines their loan amount, borrowers vesting, and name to be insured under (mortgagee clause). The Title Order (TO) will also typically include the items needed from title to clear the loan (IE, Commitment, wire instructions, E&O, CPL, Plat Drawing)
Tract Update
An updated search performed at the county by an abstractor that outlines any newly recorded documents from the date the county is good through as listed at the time our commitment is published through the new date the county is good through at the time of ordering the updated tract
Water Letter (H20)
Letter obtained from the city for any property attached to city water. This letter will show any current, past due, or estimated final amounts that the city will require to be paid at the time of closing from the seller’s proceeds.