Escrow Terms & Phrases
Terms and Phrases is Chicago Title Glossary of definitions, meanings, and
descriptions of significance for some of our industry's most often used
terms and phrases.
Look for terms and phrases in Alphabetical Order:
Land Bank -- An accumulation of land held for future use.
Land Loan -- A loan with collateral security of unimproved land. Usually the loan to value ratio is less than on improved land.
Landlocked Parcel -- A parcel of land surrounded entirely by private owned land, with no access to a public right of way (road). Condemnation for a limited access highway is a major cause of such parcels.
Lease -- An agreement by which an owner of real property (lessor) gives the right of possession to another (lessee), for a specified period of time (term) and for a specific consideration (rent).
Legal Description -- A method of geographically identifying a parcel of land, which is acceptable in a court of law.
Legal Owner -- The term has come to be used as a technical difference from the equitable owner, and not as opposed to an illegal owner. The legal owner has title to the property, although the title may actually carry no rights to the property other than a lien.
Legal Title -- Usually title without ownership rights, such as the title placed in a trustee under a deed of trust, or the title in a vendor under a land contract.
Lender -- Any person or entity advancing funds which are to be repaid. A general term encompassing all mortgagees, and beneficiaries under deeds of trust.
Letter of Credit -- A letter, usually from a bank, requesting a person or company to extend credit to a certain person or company and guaranteeing payment. Most commonly used in the purchase of good from another country. The letter may be revocable or irrevocable, but most parties insist on the irrevocable.
Line of Credit -- An amount of money a borrower may obtain from a bank without special credit check. The money is generally for business purposes and the amount would not include the borrower's own home loan and other personal secured loans.
Liquidated Damages -- A definite amount of damages, set forth in a contract, to be paid by the party breaching the contract. A predetermined estimate of actual damages from a breach.
Lis Pendens -- A legal notice recorded to show pending litigation relating to real property, and giving notice that anyone acquiring an interest in said property subsequent to the date of the notice may be bound by the outcome of the litigation.
Listing -- An agreement between an owner of real property and a real estate agent, whereby the agent agrees to secure a buyer or tenant for specific property at a certain price and terms in return for a fee or commission.
Listing Agent -- A real estate agent obtaining a listing (see which), as opposed to the selling agent.
Loan Origination Fee -- A one time setup fee charged by the lender.
Loan Package -- The file of all items necessary for the lender to decide to give or not to give a loan. These items would include the information on the prospective borrower (loan application, credit report, financial statement, employment letters, etc.), and information on the property (appraisal, survey, etc.,). There may be a charge for "packaging" the loan.
Loan Policy -- A title insurance policy insuring a mortgagee, or beneficiary under a deed of trust, against loss caused by invalid title in the borrower, or loss of priority of the mortgage or deed of trust.
Loan Servicing -- The bookkeeping and collection of a loan. It may be done by the lender or by another for the lender.
Loan to Value Ratio -- The ratio, expressed as a percentage, of the amount of a loan to the value or selling price of real property. Usually, the higher the percentage, the greater the interest charged.
Maximum percentage for banks, savings and loans, or government insured loans, is set by statute.
Loss Payable Clause -- A clause in a fire insurance policy, listing the priority of claims in the event of destruction of the property insured. Generally, a mortgagee, or beneficiary under a deed of trust, is the party appearing in the clause, being paid to the amount owing under the mortgage or deed of trust before the owner is paid.
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