The Internet Real Estate Glossary

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Laches - Negligence or undue delay in asserting a legal right or privilege. It is an equitable defense accusing an opposing party of having “sat on his rights”; as a result of this delay, the delaying party is undeserving of equitable relief. It is a form of estoppel for delay 

Land contract - A real estate installment selling arrangement whereby the buyer may use and occupy land, but no deed is given by the seller until the sales price has been fully paid.

Land lease - A lease held upon the land. Land leases are common in the states of Hawaii and Maryland. They are typically for long periods of time (up to 100 years). A lessee obtaining a long term land lease may build a structure upon the land and pay an annual lease amount to the owner of the land. At the expiration of the lease, any structures on the land may revert in ownership to the lessor.

Land Trust - A revocable, living trust primarily used to hold title to real estate for privacy and anonymity. Also known as an Illinois Land Trust or Nominee Trust. The land trustee is a nominal title holder, with the beneficiaries having the exclusive right to direct and control the actions of the trustee.

Landlocked - condition of a lot that has no access to public thoroughfare except through an adjacent lot.

LASER - Fannie Mae’s computerized delivery and reporting system.

Late charge - The penalty assessed for borrower’s failure to tender payment on a timely basis that is agreed to at the time of the execution of the contract by all parties to the agreement. The typical late charge is 4 to 5 percent of the payment amount assessed if the installment is received more than 15 days after the due date of the installment.

Late Payments - Payments that are made past their due dates according to the loan documents.

Lease - A contract or agreement which creates a relationship of landlord and tenant (real property) or lessor and lessee (real or personal property )under which the possession and use of a real and/or personal property are given, by the owner, to another for a stated period and for a stated consideration.

Lease Option - A lease coupled with an option to buy the property being leased.

Leasehold estate - Tenant’s right of possession for a specific period of time under a lease agreement. A way of holding title to a property wherein the mortgagor does not actually own the property but rather has a recorded long-term lease on it.

Lease with option to buy (Lease Purchase Agreement) - A lease under which the lessee has the right to purchase the property. The option may run for a portion or for the full length of the lease.

Leasehold - The interest that the tenant has created by a lease.

Legal Blemish - Blemishes on a piece of property, such as a zoning violation or fraudulent title claim.

Legal Description - legally acceptable identification of real estate by government survey, metes and bounds, or recorded plat. A formal description of real property sufficient to locate it by reference to government surveys or approved recorded maps. There are five common forms of legal descriptions: 1) Lot, Block & Subdivision; 2) Metes & Bounds; 3) Sectionalized; 4) Ranchos; and 5) Condominiums.

Lender - A general term for individuals or organizations that provide funding for borrowers to purchase real estate, including banks, savings and loans, credit unions, mortgage bankers and institutional lenders.

Lender Approval - A lender's agreement to allow an assumption after its review of a borrower's creditworthiness and income. Lender approval can also apply to an initial loan.

Less than Freehold Estate - Estates in possession generally referred to as leaseholds. Considered to exist for a definite period of time, or successive periods, of time until terminated by notice; also know as non-freehold estates.

Lessee (tenant) - A person to whom property is rented under a lease. Lessor (landlord) - A person who rents property to another under a lease.

Lessor - one who rents property to another under a lease.

Let - to rent a property to a tenant.

Letter of Intent - written expression of desire to enter into a contract without actually doing so.

Leverage - Using borrowed capital to finance the purchase of real estate or other assets. (No money down)

Levy - A seizure of real property by the sheriff or marshal for the purpose of conducting a foreclosure sale.

Liabilities - a person\'s debts or financial obligations. Liabilities include long-term and short-term debt, as well as potential losses from legal claims.

Liability Insurance - insurance coverage that offers protection against claims alleging that a property owner\'s negligence or inappropriate action resulted in bodily injury or property damage to another party. See also homeowners insurance.

Lien - A legal hold or claim against the property as security for a debt, judgment, mortgage or taxes. The right given by law to satisfy debt.

Lienholder - The person or entity holding a lien recorded against a property. A “senior lienholder” is the first lien recorded against a property.

LienTheory State- A state where a mortgage is viewed as a lien upon the property with title retained by the mortgagor. Opposite of “Title Theory” states.

Life estate - An estate in real property for the life of a living person. The estate then reverts back to the grantor or on to a third party.

Life Tenant - one who is allowed to use property for life or the lifetime of another designated person.

Lifetime cap - Limits or ‘caps’ the maximum interest rate over the life of a loan. Generally associated with ARM loans (See ARM). The highest amount over the initial interest rate that an adjustable mortgage can be raised. Lifetime caps are typically in the range of 5.0% - 7.0%. If the initial interest rate is 5.25% and the lifetime cap is 6.0%, the highest interest rate a borrower could pay during the course of the loan would be 11.25% (5.25% + 6.0%).

Lift of stay - A court order releasing a debt collector from a bankruptcy stay.

Like-Kind Property - property having the same nature.

Limited Partnership - an entity in which there is at least one partner who is passive and limits liability to the amount invested and at least one partner whose liability extends beyond monetary investment.

Line Of Credit - an agreement by a lender to extend credit up to a certain amount for a certain time without the need for the borrower to file another application.

Liquidated Damages - an amount agreed upon in a contract that one party will pay the other in the event of a breach of contract.

Liquidating plan - A repayment plan wherein the borrower immediately makes additional payments to cure a delinquency. Generally, a liquidating plan will call for the borrower to tender one and one-half payments or other multiple payments each month until the delinquency is cured. Effective form of forbearance where the initial reason for the default has been resolved.

Liquidation - The conversion of an asset into cash. Some investors, such as Fannie Mae, define a payoff of the loan as a liquidation.

Liquidation Appraisal - An estimate of the value of property when it is sold quickly in a forced sale. Usually, this figure is lower than fair market value for a regularly conducted sale.

Liquidation sale - Any judicial, contractual or statutory disposition of real property, under the terms of the loan instruments and applicable law, to liquidate a defaulted loan that is secured by such property.

Liquidity - The ability of an individual or business to quickly convert assets into cash.

Lis Pendens - (Lat. for “lawsuit pending.”) Recorded notice that litigation is pending on a property. Jurisdiction, power, or control courts acquire over property in a suit pending action and until the final judgment. Most lenders require the clearance of any Lis Pendens before settlement.

List With Maps - "With Maps" means we will provide a map book of the properties. Availability will depend on having an enhanced list. Please inquire if you desire mapping and it is not shown as available.

Listing - A written authorization to sell or lease real estate.

Listing Agreement - A limited-time agreement with a licensed real estate broker that authorizes the broker to represent the seller in the sale of their property.

Loan application (1003) - A document required by a lender prior to loan approval. The application includes detailed information about the borrower and the property.

Loan Balance - The amount a borrower owes on a loan.

Loan broker - A person who negotiates and originates loans, terms, rates, and fees, between the borrower and lender.

Loan Default - See Default.

Loan fee - A fee assessed over and above the annual interest in order to make the loan by the lending institution.

Loan modification - If your income is permanently reduced, your lender may consider changing the terms of your mortgage by reducing your interest rate, lengthening the term of the loan, or adding the past-due amount to your loan balance.

Loan officer - A person who works for or with a loan broker to originate loans.

Loan origination fee or points - Charge by a lender or broker connected with originating a loan. This is different from discount points, which are used to “buy down” the rate of interest.

Loan package - Information given to the lender regarding the borrower and the property necessary to make an underwriting decision.  The organized group of documents that contains all of the information required to obtain an underwriting decision of loan approval or loan denial. Depending on the type of loan and the particular lender, a package may contain some or all of the following as well as other documents - loan application, statement of use of funds, statement of net worth, P & L statements, tax returns, pay stubs, statements from various types of banking and investment accounts, property appraisal, letters of explanation, credit report, verification of employment, verification of housing payments, purchase agreement, etc. (See definition of "underwriting" below.)

Loan Pool - A group of mortgages in which investors own shares.

Loan Processor - The person who gathers and prepares the paperwork used by a lender to decide whether or not a loan should be made.

Loan-to-value ratio (LTV) - The ratio of the mortgage loan amount to the property’s appraised value. Small down payments result in loans with a “high LTV.” This could raise the interest rate. Lenders require a protective equity cushion between their loan positions and the fair market value of a secured property. Non-guaranteed lenders generally require that their loans amount to no more than 75% to 85% of their appraiser's estimate of the market value of the encumbered property.

Loan servicing - The act of collecting loan payments, handling property tax and insurance escrows, foreclosing on defaulted loans and remitting payments to the investors.

Loan to Facilitate - A loan made by a lender "to facilitate" the resale of property owned by the lender.

Lock-In - A paid-for guarantee from a lender to hold an interest rate or loan points at a set amount for a certain, set time period (usually 30, 45 or 60 days) prior to the close of escrow.

Loss Mitigation - Action taken to reduce or minimize the loss on an asset. Activities designed to reduce the likelihood of foreclosure or the amount of the loss associated with a foreclosure. Typical forms of loss mitigation include interest rate reduction, loan modifications, forbearance plans, and loan term extensions.

Lot Book Report - A report made by a title company that identifies and encumbrances recorded against a particular property. A lot book report does not identify liens recorded in the name of the owner that may affect property.

Lot and Block - method of identifying legal description of property, see Legal Description.

Lot Line - a line bounding a lot as described in a property survey.

Low-Documentation Loan - A mortgage that requires only minimal verification of income and assets

Low-Down-Payment loan - A home loan that requires the borrower to make only a small down payment before obtaining the financing needed to purchase a house.

Loyalty - The duty owed by an agent, to avoid conflicts of interest or any activity which is detrimental to a principal.

This real estate glossary is courtesy of the Internet Real Estate Center - Join the Online Real Estate Revolution.