Glossary of Terms

abrogate                v. to annul or repeal a law or pass legislation that contradicts the prior law. Abrogate also applies to revoking or withdrawing conditions of a contract.

adviser                 Per CCC means a person who, at the request of the issuer, a confirmer, or another adviser, notifies or requests another adviser to notify the beneficiary that a letter of credit has been issued, confirmed, or amended.

agent                   n. a person who is authorized to act for another (the agent’s principal) through employment, by contract or apparent authority. The importance is that the agent can bind the principal by contract or create liability if he/she causes injury while in the scope of the agency.

applicant               Per CCC means a person at whose request or for whose account  letter of credit is issued. The term includes a person who requests an issuer to issue a letter of credit on behalf of another if the person making the request undertakes an obligation to reimburse the issuer.

appraise                v. to professionally evaluate the value of property including real estate, jewelry, antique furniture, securities, or in certain cases the loss of value (or cost of replacement) due to damage.

beneficiary             n. a broad definition for any person or entity (like a charity) who is to receive assets or profits from an estate, a trust, an insurance policy or any instrument in which there is distribution.

beneficiary             Per CCC means a person who under the terms of a letter of credit is entitled to have its complying presentation honored. The term includes a person to whom drawing rights have been transferred under a transferable letter of credit.

bond                    n. A written guaranty or pledge which is purchased from a bonding company (usually an insurance firm) or by an individual as security (called a “bondsman”) to guarantee some form of performance, including showing up in court (“bail bond”), that a purchased article is the real thing, or that title is good. If there is a failure then the bonding company will make good up to the amount of the bond.

breach                  1) n. literally, a break. 2) v. the act of failing to perform one’s agreement, breaking one’s word, or otherwise actively violating one’s duty to other.

bridge loan             A short-term loan that is used until a person or company secures permanent financing or removes an existing obligation. This type of financing allows the user to meet current obligations by providing immediate cash flow. The loans are short-term (up to one year) with relatively high interest rates and are usually backed by some form of collateral such as real estate or inventory.

chattel                 n. Tangible personal asset, property.

chattel mortgage        n. an outmoded written document which made a chattel (tangible personal asset) security for a loan of a certain amount. It has been replaced in most states by a security agreement, the form of which is designated in a Uniform Commercial Code as UCC-1 filed with a specific public agency (e.g. a state Secretary of State) to protect buyers of the personal property and lenders making loans secured by the property.

Civil Procedure         n. The body of state laws or nation regulating ordinary private matters, as distinct from laws regulating criminal, political, or military matters.

collateral              n. property pledged to secure a loan or debt, usually funds or personal property as distinguished from real property.

complaint               n. the first document filed with the court (actually with the County Clerk or Clerk of the Court) by a person or entity claiming legal rights against another. The party filing the complaint is usually called the plaintiff and the party against whom the complaint is filed is called the defendant or defendants. Complaints are pleadings and must be drafted carefully (usually by an attorney) to properly state the factual as well as legal basis for the claim.

confirmer               Per CCC means a nominated person who undertakes, at the request or with the consent of the issuer, to honor a presentation under a letter of credit issued by another.

conveyance              n. a generic term for any written document which transfers (conveys) real property or real property interests from one party to another. A conveyance must be acknowledged before a notary (or if a court judgment be certified as the same as the document on file) and recorded with the County Recorder or Recorder of Deeds.

corpus                  n. 1) Latin for body. 2) the principal (usually money, securities and other assets) of a trust or estate as distinguished from interest or profits.

county recorder         n. County Office where legal documents are recorded for public record.

Covered loan            n. A consumer loan in which the original principal balance of the loan does not exceed the most current conforming loan limit for a single-family first mortgage loan established by the Federal National Mortgage Association in the case of a mortgage or deed of trust. For a consumer loan to be a covered loan any one of the following conditions must be met: (1)the annual percentage rate at consummation of the transaction must exceed by more than eight percentage points the yield on treasury securities; or (2)the total points and fees payable by the consumer at or before closing for a mortgage or deed of trust must exceed 6 percent of the total loan amount [Cal Fin Code § 4970 (b)].

cross-complaint         n. after a complaint has been filed against a defendant for damages or other orders of the court, the defendant may file a written complaint against the party suing him/her or against a third party as long as the subject matter is related to the original complaint. The defendant’s filing of a complaint is called a cross-complaint, and the defendant is then called a cross-complainant and the party he/she sues is called a cross-defendant. The defendant must still file an answer or other response to the original complaint. The cross-defendants must then file answers or other responses. These are called pleadings and must be carefully drafted to properly state the factual as well as legal basis for the claim and contain a prayer for damages or other relief.

declaratory relief      n. a judge’s determination (called a “declaratory judgment”) of the parties’ rights under a contract or a statute often requested (prayed for) in a lawsuit over a contract. The theory is that an early resolution of legal rights will resolve some or all of the other issues in the matter.

decree                  n. in general, synonymous with judgment. However, in some areas of the law, the term decree is either more common or preferred as in probates of estates, domestic relations (divorce), admiralty law and in equity (court rulings ordering or prohibiting certain acts). Thus, there may be references to a final or interlocutory decree of divorce, final decree of distribution of a dead person’s estate, etc.

deed of trust           n. a document which pledges real property to secure a loan, used instead of a mortgage in Alaska, Arizona, California, Colorado, Georgia, Idaho, Illinois, Mississippi, Missouri, Montana, North Carolina, Texas, Virginia and West Virginia. The property is deeded by the title holder (trustor) to a trustee (often a title or escrow company) which holds the title in trust for the beneficiary (the lender of the money). When the loan is fully paid, the trustor requests the trustee to return the title by reconveyance. If the loan becomes delinquent the beneficiary can file a notice of default and, if the loan is not brought current, can demand that the trustee begin foreclosure on the property so that the beneficiary may either be paid or obtain title.

deed                    1) n. the written document which transfers title (ownership) or an interest in real property to another person. The deed must describe the real property, name the party transferring the property (grantor), the party receiving the property (grantee [buyer]) and be signed by the grantor [owner or seller], who must then acknowledge before a notary public that he/she/it executed the deed. To complete the transfer (conveyance) the deed must be recorded in the office of the County Recorder or Recorder of Deeds. There are two basic types of deeds: a warranty deed, which guarantees that the grantor owns title, and the quitclaim deed, which transfers only that interest in the real property which the grantor actually has. The quitclaim is often used among family members or from one joint owner to the other when there is little question about existing ownership, or just to clear the title. This is not to be confused with a deed of trust, which is a form of mortgage. 2) v. to transfer title by a written deed.

deficiency judgment     n. a judgment for an amount not covered by the value of security put up for a loan or installment payments. In most states the party owed money can only get a deficiency judgment if he/she chooses to file a suit for judicial foreclosure instead of just foreclosing on real property. However, some states allow a lawsuit for a deficiency after foreclosure on the mortgage or deed of trust. The right to a deficiency judgment is often written into a lease or contract.

demurrer                n. (dee-muhr-ur) a written response to a complaint filed in a lawsuit which, in effect, pleads for dismissal on the point that even if the facts alleged in the complaint were true, there is no legal basis for a lawsuit. A hearing before a judge (on the law and motion calendar) will then be held to determine the validity of the demurrer. Some causes of action may be defeated by a demurrer while others may survive.

Dishonor                Per CCC of a letter of credit means failure timely to honor or to take an interim action, such as acceptance of a draft, that may be required by the letter of credit.

Document                Per CCC means a draft or other demand, document of title, investment security, certificate, invoice, or other record, statement, or representation of fact, law, right, or opinion (i) which is presented in a written or other medium permitted by the letter of credit or, unless prohibited by the letter of credit, by the standard practice referred to in subdivision (e) of Section 5108 and (ii) which is capable of being examined for compliance with the terms and conditions of the letter of credit. A document may not be oral.

donor                   See trustor

encumbrance             n. a general term for any claim or lien on a parcel of real property. These include: mortgages, deeds of trust, recorded abstracts of judgment, unpaid real property taxes, tax liens, mechanic’s liens, easements and water or timber rights. While the owner has title, any encumbrance is usually on record and must be paid for at some point.

estate                  n. an alternative term for real property interest which is used in conjunction with another defining word, like “life estate,” “estate for years,” or “real estate.”

fair market value       n. the amount for which property would sell on the open market if put up for sale. This is distinguished from “replacement value,” which is the cost of duplicating the property. Real estate appraisers will use “comparable” sales of similar property in the area to determine market value, adding or deducting amounts based on differences in quality and size of the property.

foreclose               The process of regaining property pledged as collateral when a promissory note is not paid according to the terms.

good faith              n. honest intent to act without taking an unfair advantage over another person or to fulfill a promise to act, even when some legal technicality is not fulfilled.

Good faith              Per CCC means honesty in fact in the conduct or transaction concerned.

grant deed              n. the document which transfers title to real property or a real property interest from one party (grantor) to another (grantee). It must describe the property by legal description of boundaries and/or parcel numbers, be signed by all people transferring the property, and be acknowledged before a notary public. The transfer is finalized by recording with the County Recorder or Recorder of Deeds. Importantly, a grant deed warrants that the grantor actually owned the title to transfer, which a quitclaim deed would not, since it only transfers what the grantor owned, if anything.

grantee                 n. the party who receives title to real property (buyer, recipient, donee) from the seller (grantor) by a document called a grant deed or quitclaim dee

grantor                 n. the party who transfers title in real property (seller, giver) to another (buyer, recipient, donee) by grant deed or quitclaim deed.

Honor                   Per CCC of a letter of credit means performance of the issuer’s undertaking in the letter of credit to pay or deliver an item of value. Unless the letter of credit otherwise provides, “honor” occurs (i) upon payment, (ii) if the letter of credit provides for acceptance, upon acceptance of a draft and, at maturity, its payment, or    (iii) if the letter of credit provides for incurring a deferred obligation, upon incurring the obligation and, at maturity, its performance.

HUD                     United States Department of Housing and Urban Development (HUD)

injunction              n. a judicial process or order requiring the person or persons to whom it is directed to do a particular act or to refrain from doing a particular act.

Issuer                  Per CCC means a bank or other person that issues a letter of credit, but does not include an individual who makes an engagement for personal, family, or household purposes.

judgment                n. the final decision by a court in a lawsuit, criminal prosecution or appeal from a lower court’s judgment, except for an “interlocutory judgment,” which is tentative until a final judgment is made. The word “decree” is sometimes used as synonymous with judgment.

judicial foreclosure    n. A foreclosure done through the court (East Coast States) versus non- judicial foreclosure typical of West Coast States using a Deed of Trust instead of a Mortgage.

Letter of credit        Per CCC means a definite undertaking that satisfies the requirements of Section 5104 by an issuer to a beneficiary at the request or for the account of an applicant or, in the case of a financial institution, to itself or for its own account, to honor a documentary presentation by payment or delivery of an item of value.

lien                    lien  n. any official claim or charge against property or funds for payment of a debt or an amount owed for services rendered. A lien is usually a formal document signed by the party to whom money is owed and sometimes by the debtor who agrees to the amount due. A lien carries with it the right to sell property, if necessary, to obtain the money. A mortgage or a deed of trust is a form of lien, and any lien against real property must be recorded with the County Recorder to be enforceable, including an abstract of judgment which turns a judgment into a lien against the judgment debtor’s property. There are numerous types of liens including: a mechanic’s lien against the real property upon which a workman, contractor or supplier has provided work or materials, an attorney’s lien for fees to be paid from funds recovered by his/her efforts, a medical lien for medical bills to be paid from funds recovered for an injury, a landlord’s lien against a tenant’s property for unpaid rent or damages, a tax lien to enforce the government’s claim of unpaid taxes, or the security agreement (UCC-1) authorized by the Uniform Commercial Code. Most liens are enforceable in the order in which they were recorded or filed (in the case of security agreements), except tax liens, which have priority over the private citizen’s claim.

maturity                n. 1) the date when the payment of the principal amount owed under the terms of a promissory note or bill of exchange becomes due. Quite often a note states that failure to pay interest or installment payments when due “accelerates” the note, making the “maturity date” immediate if such payments are demanded and not paid. 2) the age when one becomes an adult, which is 18 for most purposes.

mortgage                n. a document in which the owner pledges his/her/its title to real property to a lender as security for a loan described in a promissory note. Mortgage is an old English term derived from two French words “mort” and “gage” meaning “dead pledge.” To be enforceable the mortgage must be signed by the owner (borrower), acknowledged before a notary public, and recorded with the County Recorder or Recorder of Deeds. If the owner (mortgagor) fails to make payments on the promissory note (becomes delinquent) then the lender (mortgagee) can foreclose on the mortgage to force a sale of the real property to obtain payment from the proceeds, or obtain the property itself at a sheriff’s sale upon foreclosure. However, catching up on delinquent payments and paying costs of foreclosure (“curing the default”) can save the property. In some states the property can be redeemed by such payment even after foreclosure. Upon payment in full the mortgagee (lender) is required to execute a “satisfaction of mortgage” (sometimes called a “discharge of mortgage”) and record it to clear the title to the property. A purchase-money mortgage is one given by a purchaser to a seller of real property as partial payment. A mortgagor may sell the property either “subject to a mortgage” in which the property is still security and the seller is still liable for payment, or the buyer “assumes the mortgage” and becomes personally responsible for payment of the loan. Under English common law a mortgage was an actual transfer of title to the lender, with the borrower having the right to occupy the property while it was in effect, but non-payment ended the right of occupation. Today only Connecticut, Maine, New Hampshire, North Carolina, Rhode Island and Vermont cling to the common law, and other states using mortgages treat them as liens on the property. More significantly, 14 states use a “deed of trust” (or “trust deed”) as a mortgage. These states include: California, Illinois, Texas, Virginia, Colorado, Georgia, Alaska, Arizona, Idaho, Mississippi, Missouri, Montana, North Carolina and West Virginia. Under the deed of trust system title is technically given to a trustee to hold for the lender, who is called a beneficiary.

motion to strike        n. a request for a judge’s order to eliminate all or a portion of the legal pleading (complaint, answer) of the opposition on any one of several grounds. It is often used in an attempt to have an entire cause of action removed (“stricken”) from the court record.

Nominated person        Per CCC means a person whom the issuer (i) designates or authorizes to pay, accept, negotiate, or otherwise give value under a letter of credit and (ii) undertakes by agreement or custom and practice to reimburse.

notary public           n. a person authorized by the state in which the person resides to administer oaths (swearings to truth of a statement), take acknowledgments, certify documents and to take depositions if the notary is also a court reporter. The signature and seal or stamp of a notary public is necessary to attest to the oath of truth of a person making an affidavit and to attest that a person has acknowledged that he/she executed a deed, power of attorney or other document, and is required for recording in public records. The Secretary of State of each state appoints notaries public for a specified term of years. A notary public must see proof of identity (e.g. driver’s license) of those swearing and keep an official journal of documents notarized. The authority is good only in the state which appoints the notary.

Notwithstanding         Legal term meaning “In spite of, without being opposed or prevented by”

order                   1) n. every direction or mandate of a judge or a court which is not a judgment or legal opinion (although both may include an order) directing that something be done or that there is prohibition against some act. This can range from an order that a case will be tried on a certain date, to an order that a convicted defendant be executed at the state prison. 2) v. for a judge to direct that a party before the court perform a particular act or refrain from certain acts, or to direct a public official or court employee (like a sheriff) to take certain actions such as seizing property or arresting an AWOL defendant.

plaintiff               n. the party who initiates a lawsuit by filing a complaint with the clerk of the court against the defendant(s) demanding damages, performance and/or court determination of rights.

pledgor                 See grantor (entity putting up the asset)

prayer                  n. the specific request for judgment, relief and/or damages at the conclusion of a complaint or petition.

Presentation            Per CCC means delivery of a document to an issuer or nominated person for honor or giving of value under a letter of credit.

Presenter               Per CCC means a person making a presentation as or on behalf of a beneficiary or nominated person.

principal               n. The amount borrowed versus interest typically paid back in monthly increments that reduces the principal with interest.

probate                 1) n. the process of proving a will is valid and thereafter administering the estate of a dead person according to the terms of the will. 2) n. a general term for the entire process of administration of estates of dead persons, including those without wills, with court supervision.

purchase money loan     n. A loan used to purchase property, versus a loan for repairs or enhancements.

pursuant (to)           used in a legal sense to say something is in accordance with a particular law, ruling, or request; followed by the word “to.”

quitclaim deed          See deed

real property           n. All land, structures, firmly attached and integrated equipment (such as light fixtures or a well pump), anything growing on the land, and all “interests” in the property, which may include the right to future ownership (remainder), right to occupy for a period of time (tenancy or life estate), the right to drill for oil, the right to get the property back (a reversion) if it is no longer used for its current purpose or an easement across another’s property. Real property should be thought of as a group of rights like a bundle of sticks which can be divided. It is distinguished from personal property which is made up of movable items.

recital                 (from the Latin word recitare, meaning: to read out)[1] consists of an account or repetition of the details of some act, proceeding or fact. In law, that part of a legal document—such as a lease, which contains a statement of certain facts—which contains the purport for which the deed is made.

reconveyance            n. in those states which use deeds of trust as a mortgage on real property to secure payment of a loan or other debt, the transfer of title by the trustee (which has been holding title to the real property) back to the borrower (on the written request of the borrower) when the secured debt is fully paid. Under the deed of trust the borrower transfers title in the real property to the trustee (often a title or escrow company) which holds it for the benefit of the lender (called “beneficiary”). The lender must surrender the promissory note to the trustee who cancels it and then reconveys title to the borrower and records the reconveyance.

Record                  Per CCC means information that is inscribed on a tangible medium, or that is stored in an electronic or other medium and is retrievable in perceivable form.

referee                 n. a person to whom a judge refers a case to take testimony or acquire other evidence such as financial records and report to the court on such findings.

Section (§ symbol)      The abbreviation for Section number in the California Civil Code, for example

settler                 See trustor

Successor of a beneficiary    Per CCC means a person who succeeds to substantially  all of the rights of a beneficiary by operation of law, including a corporation with or into which the beneficiary has been merged or consolidated, an administrator, executor, personal representative, trustee in bankruptcy, debtor in possession, liquidator, and receiver.

surety                  n. a guarantor (one who guarantees) of payment or performance if another fails to pay or perform, such as a bonding company which posts a bond for a guardian, an administrator or a building contractor. Most surety agreements require that a person looking to the surety (asking for payment) must first attempt to collect or obtain performance from the responsible person or entity.

title                   n. The written report on a title search which shows the history of every change of ownership on a piece of real estate, and any claims against the property, such as easements on the property, loans against it, deeds of trust, mortgages, liens, judgments, and real property taxes. Some abstracts only go back in history to the last change in title. In some places the abstract of title is prepared by a title company, and in other places by an individual who is called an abstractor. Most buyers and all lenders require the title report with an abstract. The information in the abstract is up to the moment, comes from the local county recorder’s office, and usually requires an expert search.

trustee                 n. a person or entity who holds the assets (corpus) of a trustee for the benefit of the beneficiaries and manages the trust and its assets under the terms of the trust stated in the declaration of trust which created it. If a trustee has title to property, he/she/it holds title only for the benefit of the trust and its beneficiaries.

trustor                 n. the creator of a trust (who normally places the original assets into the trust), called a “settlor” or “donor” in many states. Trustor is a title used primarily in western states.

waiver                  n. the intentional and voluntary giving up of something, such as a right, either by an express statement or by conduct (such as not enforcing a right).

warranty deed           See deed