Real Estate Glossary and Dictionary

for Tax Lien R Terms

Find the Meaning of Real Estate Terms related to Tax Liens and Tax Deeds

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Rate Cap - The maximum interest rate charge allowed on the monthly payment of an adjustable rate mortgage during an adjustment period. 

Rate of Return - A percentage relationship between the investment price or equity invested and the composite returns.

Rate-Improvement Mortgage - A loan with a clause that entitles a borrower to a one-time interest rate cut without going through refinancing.

Reaffirmation Agreement - An agreement signed by the debtors where they agree to reaffirm their debt (or a portion of the debt) in lieu of a discharge of that debt under the Bankruptcy Code. In terms of mortgage servicing, the reaffirmation of the debt by the debtor reinstates his personal liability under the terms of the note.

Real estate - Land and anything permanently affixed to the land, and those things attached to the building.

Real estate broker - An individual who owns a real estate company or is in a management position and is licensed to represent a buyer or a seller in a real estate transaction. A broker employs real estate agents to buy and sell properties.

Real Estate Commission - The state regulatory body whose duty it is to carry out the real estate license laws in a particular state.

Real Estate Investment Trust (REIT) - A method of pooling investment money using the trust form of ownership if certain tax requirements are met. One advantage of the REIT is the avoidance of corporate tax (thus no double taxation) + many more.

Real Estate Market - The mechanism by which rights and interests in real estate are sold, prices set, supply adjusted to demand, space allocated among competing alternate uses, and land-use patterns set.

Real Estate Owned (REO) - property acquired through a lender through foreclosure and held in inventory

Real Estate Settlement Procedures Act (RESPA) - A consumer protection statute, first passed in 1974. The purposes of RESPA are to help consumers become better shoppers for settlement services and to eliminate kickbacks and referral fees that unnecessarily increase the costs of certain settlement services.

RESPA requires that borrowers receive disclosures at various times. Some disclosures spell out the costs associated with the settlement, outline lender servicing and escrow account practices and describe business relationships between settlement service providers.

RESPA also prohibits certain practices that increase the cost of settlement services. Section 8 of RESPA prohibits a person from giving or accepting any thing of value for referrals of settlement service business related to a federally related mortgage loan. It also prohibits a person from giving or accepting any part of a charge for services that are not performed. Section 9 of RESPA prohibits home sellers from requiring home buyers to purchase title insurance from a particular company.

RESPA covers loans secured with a mortgage placed on a one-to-four family residential property. These include most purchase loans, assumptions, refinances, property improvement loans, and equity lines of credit. HUD’s Office of RESPA and Interstate Land Sales is responsible for enforcing RESPA.

Real Property - the rights to use real estate. Refers to land and improvements both on and to the land, and also to the physical aspects of real estate, including surface, air and subsurface rights plus, bundle of rights.

REALTOR® - A registered trademark of the NATIONAL ASSOCIATION OF REALTORS. It is used by brokers and salespersons who hold active membership in the association.

RESPA required disclosures - At the time of loan application when borrowers apply for a mortgage loan, mortgage brokers and/or lenders must give the borrowers - a Special Information Booklet, which contains consumer information regarding various real estate settlement services. (Required for purchase transactions only) and a Good Faith Estimate (GFE) of settlement costs, which lists the charges the buyer is likely to pay at settlement. This is only an estimate and the actual charges may differ. If a lender requires the borrower to use a particular settlement provider, then the lender must disclose this requirement on the GFE. a Mortgage Servicing Disclosure Statement, which discloses to the borrower whether the lender intends to service the loan or transfer it to another lender. It also provides information about complaint resolution.

Recasting - Restructuring a loan with a new interest rate and term. It may be the same loan from the same lender, but the terms change. FHA has a formal procedure to recast loans to assist home buyers to stay in their houses.

Receiver - A court-appointed person who is charged with preserving a property, collecting rents and doing anything necessary to maintain the property's condition.

Receivership - After a bank is taken over by FDIC, it may be placed in receivership to liquidate its assets. The employees are fired and the assets shipped off to be sold at auction. The real estate is turned over to the RTC or the FDIC¹s liquidation division. Existing contracts with the institution in receivership are voidable at the option of the FDIC.

Reciprocity - The recognition that states give whereby a licensee of one state can be involved in real estate transactions in other states.

Reconveyance - The satisfaction of a deed of trust. Under the deed of trust arrangement, the lender sends to the trustee the note, the deed of trust, and a request for reconveyance. The trustee then cancels the note and issues to the borrower a reconveyance or a release of deed in accordance with the deed of trust.

Recording - The act of entering into a book of public records instruments affecting title to the real property. A lender requires that a deed of trust or a mortgage be recorded to evidence the debt against the property.

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

Recourse - The right of the holder of a note secured by a mortgage or deed of trust to claim money from a borrower who is in default in addition to the property pledged as a collateral.

Rectangular Survey - method of land description used in about 30 states based on imaginary lines of longitude (meridians) and latitude (base lines); also referred to as the US government survey system.

Recurring fees - Costs associated with owning the property that recur month after month. These costs may include hazard insurance, interest, property taxes, mortgage insurance (PMI) and association fees. A prorated amount of these fees may have to be paid at closing.

Redemption period - The time allowed by law in some states during which a mortgagor may redeem or buy back its property by paying the amount owed on a foreclosed mortgage, including interests, costs and fees.

Redemption rights - The right to redeem ownership of property, in those states which have right of redemption.

Redlining - The illegal practice of refusing to provide loans or insurance in a certain neighborhood or to a certain class of people.

Refinancing - The repayment of a debt from the proceeds of a new loan using the same property as security. In other words, the creation of a new mortgage that pays off the preceding mortgage, usually to secure a better interest rate or mortgage terms.

Refunding - A form of loss mitigation associated with the servicing of a loan guaranteed by the Veterans Administration. The Secretary has discretionary authority to refund a loan under 38 USC 18l6a.

Regression - The principle that the value of a better-quality property is adversely affected by the proximity of a lesser-quality property.

Regular Servicing Option (RSO) - The servicing option of an MBS insured by Fannie Mae where the servicer retains the risk of loss associated with a defaulted loan. Opposite of Special Servicing Option (SSO).

Regulation Z - A federal regulation requiring creditors to provide full disclosure of the terms of a loan, including the terms of the loan and the annual percentage rate (APR). Your lender should provide you with a form providing details of the proposed mortgage before you agree to anything. (See “Real Estate Settlement Procedures Act-RESPA.”)

Reinstatement figures - The total amount of money needed to bring one’s mortgage loan current.

REIT (real estate investment trust) - A trust that uses investors’ money to purchase and manage real estate. Investors realize some of the tax advantages in owning real estate.

Release Of Liability - The document that relieves a person who is obligated to pay a loan of any further obligations. It may be obtained when a buyer takes over the payments on the seller¹s old loan, provided the buyer meets the lender¹s standards for income and creditworthiness. If granted, the release of liability means the seller will not be responsible if the buyer fails to pay.

Release of mortgage (satisfaction of mortgage) - A document used when the mortgage is paid in full. Issued by the lender to the borrower stating that the promissory note or bond has been paid in full and the accompanying mortgage may be discharged from the public records.

Relief from stay - An order granted to a particular creditor to permit it to enforce its claims or proceed with foreclosure. Relief from Stay must be approved by the bankruptcy court.

Relief measures - Alternatives to foreclosure that provide the borrower with temporary or permanent relief options permitting the borrower to retain the property and the lender to avoid a foreclosure.

Reinstatement - If you're experiencing a temporary shortfall of cash, your lender may offer you a fixed amount of time to pay off the past-due amount. But you'll also be responsible for covering any late fees and penalties you've incurred.

Remainder-man - The person who has a future interest in a life estate once the present estate terminates.

Removal - The process of transferring a case from state court to federal court.

Renegotiable Rate Mortgage - A renegotiated loan where the maturity is fixed (for example, 30 years) but the interest rate, and hence the monthly payment, is renegotiated periodically (for example, every 3 or 5 years.)

Rent - The payment made for the use of land.

Repayment plans - If you haven't missed many payments, you can ask your loan holder to allow you to pay off the money bit by bit, adding a portion of the past-due amount to your regular payments.

Replacement Cost - The cost of substituting a similar structure with utility equivalent to the subject property but constructed with modern materials.

Repossession - Means of recovery or acquisition of the physical control of a property as to make further legal action unnecessary in order to obtain actual possession of the property.

Reproduction Cost - The cost of exactly duplicating a structure using the same material and design.

Request For Notice Of Default - A document that under statutory provisions, allows certain interested parties to request and be entitled to notification of a default.

REO - Real Estate Owned. Also known as ORE (Owned Real Estate). Real property taken back by the lender after a foreclosure sale because no one else bid more than the lender’s opening credit bid.

Rescission - The cancellation of a contract. When refinancing a mortgage on a principal residence, the law gives the homeowner three days to cancel the contract. Also, the act of canceling a previously recorded document. In a foreclosure context, the trustee will “rescind” the Notice of Default or Notice of Trustee’s Sale when the borrower pays the arrearages and brings the loan current.

Resident Manager - An employee of the property management firm and its representative on the premises.

Residential Service Contract - home warranty or insurance contract, generally for one year, covering plumbing, electrical, and mechanical systems of the home.

Residual - Value or income remaining after deducting an amount necessary to meet fixed obligations.

Res Judicata - (Lat. judged matter) For the doctrine that where a final judgment has been made by the court, that judgment is conclusive upon the parties in any subsequent lawsuit involving the same cause of action.

RESPA - See “Real Estate Settlement Procedures Act.”

Restrictive covenants - Private restrictions limiting the use of real estate. Restrictive covenants are created by deed and may “run with the land,” binding all subsequent purchasers of the land, or may be binding only between the original seller and buyer.

Reverse mortgage (reverse annuity mortgage) - A mortgage often used by the elderly on fixed incomes to provide income as long as they live in exchange for increasing equity in the home. Each payment made to the homeowner causes the loan principal to increase. The loan is eventually paid from the sale of the property or from the borrower’s estate upon his or her death.

Reversion - A future interest in the grantor, which occurs whenever the owner of real estate conveys an estate of lesser duration than the owner has.

Reversionary Interest - A future interest a person has in property after present possession is terminated.

Revocation - The nullification of an offer to contract by the original offeror.

Right of redemption - (Same as “redemption right”) The right granted in some states for a mortgagor to redeem ownership of real property, within a specified amount of time, after a foreclosure sale and upon payment of the amount of debt plus interest and all costs incurred.

Right of Re-entry - The right retained when a fee simple on condition subsequent exists; also referred to as the power of termination. Back to court.

Right Of Rescission - The right to back out of a contract

Right of survivorship - The right of a surviving joint tenant to acquire the interest of a deceased joint owner.

Right of Survivorship - Upon the death of a joint tenant or tenant by the entirety the interest does not pass to the tenant's heirs but to the other join tenant(s).

Riparian Rights - A legal right of a landowner who owns land next to a natural watercourse to reasonable use of whatever water flows past the property.

Rollover loan - A loan that is amortized over a long period of time, such as 30 years, but with an interest rate that is fixed for a short period, such as five years. The loan may often be extended or rolled over at the end of the shorter term.

Run with the land - Certain restrictions, easements and covenants are part of the ownership of land and thus are not terminated when title is transferred but remain in effect from owner to owner.

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