Glossary - Jiffy Mobile Notary

ABA: American Banking Association and is also known as the ABA bank routing number.

ACH: Automated Clearing House.

Acknowledge: To admit the existence or truth of a statement and accept responsibility. Acknowledgements are typically found on security instruments, powers of attorney, subordination agreements, and other documents containing terms and conditions. By signing the document, the signer agrees to be bound by the provisions in the document. The purpose of an acknowledgement is to evidence the authenticity of the signature, ensuring that it can be trusted as genuine.

Acknowledgment: A formal declaration made to the authoritative witness by the person who executed the document that it was freely executed.

Acknowledgment of Receipt of Appraisal Report: If there was an appraisal, the borrower has a right to receive a copy of it. By signing this form, the borrower acknowledges that they received it, or they are waiving thier right to receive it.

Administer: To give or apply in a formal way.

Affiant: One who makes a swearing statement in an affidavit.

Affidavit: A written declaration made under oath before a notary public or other authorized officer.

Affirmation: To declare positively or firmly; maintain to be true. An affirmation replaces “swearing before God.”

Affix: To secure (an object) to another; to attach; add to.

Amortization: Repayment of a loan with periodic payments of both principal and interest calculated to pay off the loan at the end of a fixed period of time. A schedule can be 10, 15, 20, 25, 30 years, or any number on a refi if the borrower is just refinancing at a lower interest rate and keeping the same term.

Appointment: The act of designating for an office or position.

Apostille: An apostille is a cover page or specialized certificate that is attached to an original document that has been authenticated and/or legalized allowing that document to be used in a foreign county. The word apostille is of French origin and is literally translates to “Certification.” Certificates are issued by the secretary of state where the original originated or are issued by the Dept. of State in Washington D.C. in the event the document was issued by the federal government. For example, FBI background checks or Naturalization papers are apostilled by the Dept. of the State.

The Maryland Secretary of States, writes what an apostille is not: “Apostilles do not certify the content of the public document to which is relates. They do not grant authority and they do not give any additional weight to the content of the underlying documents. An apostille may never be used for the recognition of the document in the country where that document was issued.”

The apostille in other words is an authentication document for Hague Convention members whereas non-Hague countries follow county guidelines for Embassy Legalization. The National Notary magazine, January 2020, states, “An Apostille is issued by the Secretary of the State for a document that is destined for a country that is party to the Hague Apostille convention after the notarization has been completed. The purpose of the Apostille is to validate the Notary’s commission with the state so that it may be received in the country of destination.

Adjustable-Rate Mortgage Loans (ARM): Unlike a fixed rate mortgage, an adjustable-rate loan’s interest rate will change, often after a set number of years of fixed payments. The payment may be low initially because it is based on payment that is 30 years but the rate will change/adjust after “X” years. The most common adjustable-rate terms are 3, 5, 7, or 10 years. After the fixed term is up, the interest rate will change on a yearly basis until it is completely paid off. That is why ARMs are called 5/1, 7/1 or 10/1. Fixed for 5 years and changes every year thereafter. After the term is up, the rate will change via an index (usually the treasury bill or the London Interbank Offered Rate aka LIBOR) plus margin that is set by the lender. The margin never changes but the index will go up or down with the LIBOR or treasury note. For example, if this index is 3 percent and the margin is 3 percent the rate for that year would be 6 percent.

Attest: To affirm to be correct, true, or genuine; corroborate.

Authenticate: To prove or verify as genuine.

Bargain and sale deed: Bargain and sale deeds are statutory in Oregon under ORS 93.860. An Oregon bargain and sale deed form transfers real estate with no warranty of title (ORS 93.860 (2, 3)). When signing an Oregon bargain and sale deed, the current owner conveys the real estate to the new owner without warranty, and the new owner bears the risk of title defects. A bargain and sale deed transfers whatever interest the property owner holds when executing the deed and any interest that vests in the current owner after the deed is signed.

Borrower (Mortgagor): An individual who applies for and receives funds in the form of a loan and is obligated to repay the loan in full under the terms of the loan.

Borrower Certification and Authorization: This form gives permission to the lender to confirm employment. The borrowers are certifying that the financial status, employment and income are substantially the same as they were at the time the borrowers submitted thier application for the loan.

Borrower Information Sheet: Just as the name implies, this is the form that gives escrow all the information they need to open up escrow. The current payoff, whom they owe and how much, any private liens, HOA info, and/or insurance information.

California per Diem Interest Disclosure: A lot of people from California are here in Oregon during a real estate closing, so it is not unusual to see this disclosure. All it means is that the borrower has to pay interest the day the loan funds. This disclosure tells the borrower how much interest they pay per day aka per diem. The day the new loan funds the borrower is responsible and notified that he or she is responsisble to pay interest.

Sometime the borrower will have choices. For example, you may notice two boxs and that one needs to checked. It is because sometimes there is overlapping interest. The problem that arises in refinance, is if the new loan funds on a Friday the borrower starts paying interest on the new loan effective immediatley. However, if the old loan will not be paid off until the following Monday, the borrower will have to pay interest on two loans, the old and the new. In this case, the borrower may want to check the box that states that they do not want the new loand to be funded unter after the weekend or holiday, to prevent this from happening.

If the loan is a purchase, if the loan funds on a Friday, but the house doesn’t record (meaning that they don’t get the keys un Monday), they would be paying interest on a house do not even own yet. Once again, the borrowers may want to check the box that says that they don’t want to fund the loan until after the weekend or holiday, to prevent this from happening.

The second box states that the borrowers don’t care when the loan funds and that they understand that they will start paying interest immediately.

Certificate: 1) A document testifying to a fact, qualification, or promise; or 2) A written statement legally authenticated. To ensure your certificate language is compliant, ideally every certificate should answer four key questions: where, who, when, and what. Out-of-state certificate wording needs to comply with your state’s laws and does not ask you to do something you are not allowed to do. Hybrid certificates will have both acknowledgement and jurat wording meaning that the notary must administer a verbal oath in addition to signing. If there’s is no notarial wording, the notary will ask the signer to tell the notary what notarial act and certificate form to use.

Civil Action: Not a criminal action. A lawsuit for the purpose of protection of private (not public) rights and compensation for their violation.

Civil Liability: The responsibility and obligation to make compensation to another person for damage caused by improper performance of duties and acts.

Closing Disclosure: The Closing Disclosure discloses and itemizes all of the closing costs. Page one includes loan amount, interest rate, projected monthly payments, closing costs and cash to close. The remaining pages include details of the closing costs, payoffs and payments, cash to close calculations, disclosures, loan calculations and contact information. The Closing Disclosure combines and replaces the HUD/Settlement Statement and Truth in Lending (TIL) Statement for most loans applied for beginning October 3, 2015. When signing in a trust, there may be multiple copies of the CD for the borrowers to sign, including signing as an individual, a trustee, and sometimes the settlor (i.e., the person(s) who set up the trust).

Closing Statement: The closing statement is the document that brings together all of escrow, title and the lender’s fees and puts them on one document for the borrower to see and approve. Being that escrow is the third neutral party, they create the closing statement. Since escrow creates the closing statement and it makes sense that they get a copy along with the lender.

Commercial Paper: 1) Any of various short-term negotiable papers originating in business transactions; or 2) A document whose purpose is to transfer money such as a check, bill of exchange, or draft.

Commission Certificate: A document describing the notary’s appointment and term of office.

Compliance Agreement: Just because the borrower has signed the loan documents doesn’t mean the loan will fund. This form informs the borrower that if anything else needs to be signed before funding, after closing, or even ten years down the road say if something was discovered missing during an audit, the borrower promises to be cooperative, or compliant.

Consumer Credit Score Disclosure: The lender and the borrower both have the right to know the borrower’s credit score. This form gives the borrower their credit scores. Credit scores are one of many determining factors to what a borrower pays in interest on a loan. The higher the credit score, the lower the interest rate coupled with thier ability to borrow based on a solid repayment history.

Contact Verification Form: The borrower confirms all contact information the lender has for them is correct. The contact verification form includes mailing address, phone numbers, etc.

Conveyance Deeds: David Thun Assistant Managing Editor for the NNA writes: A conveyance instrument is a document used to transfer a real property title from the current owner (the “grantor”) to a buyer (the “grantee”). The specific type of conveyance deed used to convey tile varies depending on state law, but here are some common examples NSAs may encounter:

1) General Warranty Deed: A document which conveys the grantor’s interest in and title to the property. A General Warranty Deed also warrants that if the title is defective or has a “cloud” (such as a tax lien or mortgage claim on the title) the grantee may hold the grantor liable.

2) Quitclaim Deed: A document that transfers the owner’s current interest in a title to the grantor. A quitclaim deed does not guarantee the grantor’s ability to convey title.

3) Grant Deed: A grant deed transfers title to real property or a real property interest from the grantor to the grantee and warrants that the grantor owned the title to the transfer.

4) Bargain and sale deed: Bargain and sale deeds are statutory in Oregon under ORS 93.860. An Oregon bargain and sale deed form transfers real estate with no warranty of title (ORS 93.860 (2, 3)). When signing an Oregon bargain and sale deed, the current owner conveys the real estate to the new owner without warranty, and the new owner bears the risk of title defects. A bargain and sale deed transfers whatever interest the property owner holds when executing the deed and any interest that vests in the current owner after the deed is signed.

A deed must be signed by the grantor and, as a condition to recording, be acknowledged before a Notary. A few states allow proof of execution by subscribing as a witness in lieu of an acknowledgment if the grantor is unable to appear in person before a Notary.

Several types of loan document packages include a conveyance deed. For example, conveyance deeds are encountered during transactions in which a property is being sold to or purchased by a new owner or buyer. They are also used when a title is being transferred to a family member. Another type of transaction involving a conveyance deed is when an individual places their home in a living trust. Finalizing a refinance transaction may require the home to be taken out of the trust and then placed back into the trust afterward. When this happens, Signing Agents may encounter one more conveyance deeds among the documents in the loan package.

Counseling Checklist for Military Home Buyers: On VA loans the VA is letting the veteran know if they miss any payments, home counseling may be required. Essentially the counseling is letting them know how bad foreclosure is and that they should not miss more payments.

Credible Witness: A believable witness worthy of confidence who personally knows the signer of a document.

Deed of Trust/Mortgage: This document is recorded in county land records as evidence of the lender’s security interest in the property. The Deed of Trust and Riders have 5 main functions:

1) It records who actually owns the property: e.g., Jane Doe and John Doe, husband and wife as joint tenants.

2) It records the amount the borrower is borrowing from the bank, also known as the lien amount.

3) It records who is lending the money, also known as the lien holder.

4) It records the legal description of the property. We all know the street address to a property. e.g., 123 Main Street. The legal description is how the county recognizes the property location via the lot boundaries and lot location within the county.

5) Last but not least, it states the rules and regulations which the property owner has to abide by.

Riders are attached to the deed are just amendments that get recorded with the deed. Examples include MERS riders, condominium riders, family riders/assignment of rent, or planned unit development (PUD) riders.

Default: Lenders will only lend on a house if they have the right to take the house back from the borrower if the borrower fails to pay the loan on the terms that were mutually agreed upon. Banks may give you 30 days past your due date before they consider you in default on your loan. Default means the borrower has not lived up to the agreed upon terms. Consult an attorney in your state to understand the default definitions and ramifications that apply in your state.

Discount Points/Buy Down Points: are an up-front fee paid to the lender at the time that you get your loan to lower the interest rate you qualified for. You can literally buy down an interest rate. Let’s say you qualify for a 5 percent rate on a 30-year fixed. You could pay the bank $2,400 (whatever the agreed upon price is) to get 4.5 percent. This is why it’s called buying the rate down.

Disbursement of Proceeds: If the borrower is due a refund from closing, this tells escrow how the borrowers would like to receive it. This form tells escrow whether the borrowers want to pick up the check at the local escrow office, have it mailed first class, or sent via a courier overnight via FedEx or UPS, deposited, or wired. If this is not filled out then escrow will not know how give the money to the borrower. Notably, if the borrower is borrowing or refinancing via a trust, the payee must be made out to the exact name of the trust. The date of distribution of proceeds can be found on the upper left-hand corner of the Closing Disclosure (CD).

Dry states vs wet states explained by CMG Funding:

Have you ever heard of one state being called a “wet funding” state and another dry? What does that mean? (It has nothing to do with the weather, by the way).

“Wet funding” and “dry funding,” which vary by state, refer to when a mortgage is considered “officially” closed, mortgage funds are dispersed, and the new owner can take possession of the property. Here’s the basic difference between “dry” and “wet”:

“Dry funding”: On the day of loan closing, all parties get together to sign mortgage documents, but all of the paperwork required to officially close the loan doesn’t have to be completed at that time. Most importantly, no mortgage funds are distributed to the seller on that day. (Technically, the loan doesn’t officially “close” until all of the paperwork is completed, approved and mortgage funds are dispersed to the seller.)

Dry funding states include Alaska, Arizona, California, Hawaii, Idaho, Nevada, New Mexico, Oregon and Washington. All other states are “wet funding.”

“Wet funding”: Much stricter than dry funding, wet funding requires that all of the paperwork needed to officially close the loan must be completed and approved on the exact day of loan closing. With wet funding, the seller receives funds on the loan closing date or within two days thereafter. So wet funding moves the entire closing process along much faster than dry funding.

If dry funding slows things down, why was it created? Basically, dry funding is an added layer of consumer protection to help ensure the legality of the transaction. Because the closing process is slower, and funds aren’t disbursed right at the closing table, there’s added time to help ensure that there aren’t any issues.

In short, “dry” states refer to those states where the paperwork required to officially close a loan does not need to be concluded on the day of closing. Wet funding is stricter and requires that all the necessary documents needed to close the loan must be ready and approved at the period of closure.

Escrow Agent: A person with fiduciary responsibility to the buyer and seller, or the borrower and lender, to ensure that the terms of the purchase/sale or loan are carried out.

Escrow Company: An escrow company is a licensed neutral third party that distributes legal documents and funds on behalf of a buyer and seller. Or more simply stated, Escrow is the middle person. They are the authority to make sure that the seller, lender, and borrower all follow through on their agreed upon terms. The seller doesn’t get any less than what they agreed upon and the buyer doesn’t pay any more than what they agreed upon. The same goes between the borrower and bank. Escrow ensures the fees are accurate as agreed. Escrow is the neutral third party to make sure everyone behaves. Their role is to keep track of what is going on between the borrower, lender, and title company. Escrow keeps records of what is going on between all the parties.

Escrow Instructions: Escrow instructions simply describe escrow’s role and responsibility during the transaction to the borrower. Since they are escrow instructions, it makes sense that escrow gets back their original instructions. And since the borrower is agreeing to enter escrow with the escrow company it makes sense why the lender wants to see the agreement signed, and that’s why everybody gets a copy. The same applies to Escrow Amendments which are changes made to the original escrow instructions, such a change in the loan amount or purchase price and everybody gets a copy.

Federal Equal Credit Opportunity Act Notice: This notice lets the borrower know that their credit score was a determining factor for their loan approval. It also informs lenders can discriminate based on credit score. Bad credit results in an higher interest rate.

FHA (Federal Housing Administration) Loans: Federal Housing Administration (FHA) loans are fixed- or adjustable-rate loans insured by the U.S. Department of Housing and Urban Development (HUD). FHA loans are designed to make housing more affordable, particularly for first-time home buyers. FHA loans typically permit borrowers to buy a home with a lower down payment than conventional loans. With FHA insurance, eligible buyers can purchase a home with a down payment of as little as 3 percent of the appraised value or the purchase price, whichever is lower. FHA borrowers typically are required to participate in a face-to-face meeting with their lender or a government-approved mortgage counselor prior to closing on a new mortgage loan. The current FHA loan limits vary depending on home type and home location. To find the most recent limits for your home, consult the FHA Maximum Mortgage Limits web page.

Fix Rate Note: This means the interest rates will not change for the duration of the loan. Whether that means 15, 20 or 30 years. The fixed rate note allows the payment to stay the same for the full amount of the term. The longer the term, the higher the interest rate. For example, interest on a 15-year loan might be 5 percent while a 30-year loan might be 5.5 percent. The shorter the term the higher the payment because the loan has to be paid back in a shorter duration of time.

Flood Insurance Coverage Subject to Change Disclosure: Flood zones are regularly being updated all over the country. The lender uses the disclosure that if the property the borrower is purchasing is ever to be rezoned as a flood zone, they will be required to have flood insurance at that time.

Foreclosure: Foreclosure is a legal process in which a lender attempts to recover the balance of a loan from a borrower who has stopped making payments to the lender by forcing the sale of the asset used as the collateral for the loan. The Oregon foreclosure process begins as soon as you miss the first payment or after the second payment is missed. This usually depends on the lender. The lender will initiate the foreclosure process through the court systems in your local county by filing a notice of default and having you served it.

Form 1003: Is the Residential Uniform Loan Application. It contains the information the borrower provided to the lender when applying for the loan which is why signing it is a requirement. In the industry it is pronounced ten-oh-three. It is formerly referred to as Form 1003.

Form 1009: Is the Residential Uniform Loan Application on a Reverse Mortgage. It contains the information the borrower provided to the lender when applying for the loan which is why signing it is a requirement.

Form 4506-C: The IRS IVES Request for Transcript of Tax Return (IRS Form 4506-C) gives the lender permission from the borrower to obtain tax transcripts from the IRS.

Fannie Mae requires lenders to have each borrower whose income (regardless of income source) is used to qualify for the loan to complete and sign a separate IRS Form 4506-C at or before closing. EXCEPT that this requirement does not apply if all of the borrower’s income has been validated by the Desktop Underwriter (DU) validation service. This aligns with the Selling Guide policy that does not require lenders to obtain tax transcripts as part of the quality control process in these cases. If all borrower income is not validated through the DU validation service, the lender must obtain the completed and signed IRS Form 4506-C. The lender has the discretion to determine at what point in the process it is obtained, understanding that the form is only valid for 120 days from the date of the borrower’s completion/signature.

Some lenders may submit Form 4506-C to the IRS to document borrower income, but the intent of this policy is to validate the income documentation provided by the borrower and used in the underwriting process.

Fannie Mae does not require lenders to obtain tax transcripts from the IRS prior to closing, but does require that obtaining tax transcripts be part of the lender’s post-closing quality control processes, unless all borrower income has been validated through the DU validation service.

If the lender chooses to obtain tax transcripts from the IRS prior to closing, the transcripts received must validate the applicable income documentation used in the underwriting process.

Form 4506-T: A 4506-T is used to order IRS transcripts. A bank or other lending association uses this form as proof to avoid fraudulent behavior. This form can be used to request a business return transcript, transcript of an account, including payments, penalties, and adjustments, or a record of account. The wet signature and date serve as back up in case the lender is audited by the IRS.

Form I-9: Is a federal form for Employment Eligibility Verification via the Department of Homeland Security, U.S. Citizenship and Immigration Services.

Good Faith Estimate: The Good Faith Estimate is an estimate of all closing fees including pre-paid and escrow items as well as lender charges. The Good Faith Estimate was replaced by the Loan Estimate for most loans applied for beginning October 3, 2015.

Grant Deed or Quitclaim Deed: A grant deed or quitclaim deed changes the way property title is held. Whether that be from a seller to a buyer, or somebody changing the way they hold title. For instance, if someone got married and was adding their spouse to the property, or if someone is putting their house into a trust. Other ways of adding or removing names from the title include a Statutory Bargain and Sale Deed or a General Warranty Deed. Seek the professional option of lawyer in your state.

Hazard Insurance: Hazard insurance is another word for homeowner’s insurance. It protects the insured against loss due to fire or other natural disasters in exchange for a premium paid to the insurer. Hazard insurance is not the same as flood insurance or earthquake insurance. This form also allows the lender to be the loss payee recorded on the hazard insurance. Hazard insurance protects the bank’s collateral as well as the borrower’s investment.

Hazard Insurance Disclosure: This disclosure states that the maximum amount of insurance coverage the lender can force a borrower to have is the replacement cost of the house, not the appraised value.

Home Equity Line of Credit (HELOC): A home equity line of credit is a line of credit that is tied to the equity of your house. For instance, the home is worth $500,000 and there is a first loan for $200,000, that means there is $300,000 of equity. In this example, a bank may approve the borrower for a line of credit for $100,000. Unlike a loan that has a specific payoff term (15, 20 or 30 years), the line of credit works like a credit card. So, in this example, the borrower may buy a car for $15,000 on that line of credit, which then means they would have $85,000 remaining that they could charge against the HELOC. If they borrowed $15,000, they would make payments only on the amount borrowed, just like a credit card.

In other words, the equity you have in your home is a fluctuating figure representing the difference between your current mortgage loan balance (plus any existing HELOC or home equity loan balances) and your property’s current value. For example: If your home is worth $400,000 and your current mortgage balance is $300,000, you have a $100,000 equity stake in your property.

How much can I borrow with a HELOC? About 80% of your home’s value minus the mortgage balance.

The Housing Financial Discrimination Act of 1977: Also called The Holden Act, requires lenders to base lending decisions on the merits of the borrower and the security property, rather than on the property’s neighborhood.

HUD Settlement Statement: The U.S. Department of Housing and Urban Development hereinafter known as HUD. The HUD Settlement Statement itemizes all closing costs; on pages 1 and 2 items that appear on this statement include real estate commissions; fees; points; and payoffs and escrow amounts. Page 3 of the Settlement Statement is a comparison of the fees disclosed on the Good Faith Estimate (GFE) to the actual costs as listed on the HUD Settlement Statement. The bottom of page 3 shows the loan terms. The loan amount, rate, term, principal and interest payment, as well as total payment, are at the bottom.

Initial Escrow Account Disclosure Statement: This form shows the amount being impounded into an escrow account set aside to pay 12 equal payments for property tax and hazardous insurance. It also shows the cushion selected by the lender since payments tend to increase.

Insurance Information Sheet: This is where the borrower lets escrow know what insurance company that they use. Insurance company name, policy number, the insurance agent’s name, and phone number. If the borrower doesn’t have an insurance company, the lender will choose a company on your behalf.

Interest Rate: The interest rate is what the borrower agrees to pay back to the bank on the money that is borrowed. How are interest rates determined? The generic answer is a rate sheet that lenders used, but more specifically interest rates are tied to risk. The lower the perceived risk, the lower the interest rate. The main computation of interest that you qualify for off a rate sheet is based on your credit score, loan to value (LTV) ratio, term, and whether or not you occupy the property. That is why if you have a high credit score, you have shown that you regularly pay back the money that you borrowed. Therefore, you get a lower interest rate because of the lower perceived risk for the bank to lend you money. The opposite is true when you have a lower credit score, you get a higher interest rate.

Impound Account/Escrow Account: The impound account and escrow account are the same thing. Some borrowers either request or are forced to have an impound account for taxes and insurance. To understand what an impound account is, you need to first understand that property taxes are due twice a year in almost every county in the country. Homeowner insurance (hazard/fire insurance) is due on an annual basis. With that being said, some lenders are nervous that the borrowers will not make these payments as they come due. So, they require that a savings account for taxes and insurance is set up with them (the lender) and the borrower will make a monthly deposit to this account and as the taxes and insurance come due, the lender will make the payments for them. Not all borrowers are required to have an impound account, but they may prefer it. In conclusion, an impound or escrow account is a fancy word for a savings account for taxes and insurance.

Impound Disclosure/Waiver: This form shows whether the borrower is required to have an impound/escrow account, or whether they chose to waive the impound/escrow account. Many borrowers chose to pay thier own property taxes and hazard insurance. For others, it’s convenient to have the payments distributed on thier behalf.

Insurance: Insurance refers to the borrower’s homeowner’s insurance or also known as hazard insurance. Homeowner’s insurance covers anything that may happen to the home like a fire, flood or anything that can happen to the structure of the house. Banks will not lend against a home that is not insured. It is escrow’s responsibility to make sure the borrower has insurance on the home they are buying or refinancing. Escrow keeps an original of the insurance Declarations Page and the lend keeps a copy.

Jurat: A certificate added to an affidavit declaring when, where, and before whom it was sworn. Jurats are typically found on affidavits and certifications; by signing this document, the signer swears before the notary that the statement made in the document are true. Since the purpose of a jurat is to compel truthfulness, notaries should be instructed to obtain a verbal oath from the signer of all documents containing a jurat. Sometimes “jurats” are referred to as a “verification” or an “oath” or “affirmation”. The state of Oregon does not use the term jurat.

Jurisdiction: The geographical area where a notary may notarize. An Oregon Notary Public may notarize anywhere in Oregon, but not outside the state, certain conditions may apply if you are RON certified.

Lender: The lender is the bank that is lending the money. The lender has the biggest role in the process, because without them lending the money, there would be no need for a title or escrow company. This is the reason why the majority of the documents in your loan signings are lender documents.

Lien: A lien is a form of security interest granted over a property to secure the payment of a debt. Anyone can put a lien against a home as long as they have the homeowner’s consent. In terms of mortgages, when the bank lends money to borrower, the way they guarantee repayment is by recording a lien against the house. The amount of lien recorded is equivalent to the amount lent to the borrower. If the borrower fails to live up to the agreed upon repayment terms, the bank has the right to sell the property and recoup whatever money they have lent or more specifically whatever the lien amount is. Notably, there are positions of liens. What is a first and second lien? Most mortgages are recorded in the first position, which means they are the first to be paid off. That is why most mortgages are called first liens. If something was to happen to the property, like a sale of the property, the lien recorded in the first position gets paid first. There can be a number of lien positions (1st, 2nd, 3rd, etc.). Another bank (or the same bank) can lend more money to the borrower and will record a lien as well. If there is lien already on the house, then naturally the next lien recorded would be the second lien. That is why you hear of second mortgages simply referred to as a second. So, if you are doing a loan signing for a “second” that should tell you the borrower already has a first. Or if you get a signing for a first and second, that means they are taking out two different loans at the same time. One will be recorded in the first position and the other will be recorded in the second position. Lastly, as liens get paid off, the lien that was in the next position moves into the lien position that had been vacated. So, if you pay off a first, the second moves into the first position.

Loan to value: Loan to value (LTV) means how much you owe versus the value (appraised value or sale price, whichever is lower) of the home. For instance, if your house is worth $200,000 and you owe $100,000, your loan to value is 50 percent. The higher the loan to value, the higher the perceived risk.

L.S.: Indicates where the official notary stamp imprint is to be placed. Latin term Locus Sigilli means “place of the seal/stamp.”

Mailing Address Certification: Not all borrowers want the mortgage statement sent to the property address. This form lets the lender know exactly where the borrower prefers the mortgage statement to be sent.

Margin Call: The primary way a lender makes money on a HELOC is by charging a margin. The margin is the amount that’s added to the prime rate to determine your mortgage rate. Normally, your margin stays the same throughout your loan. But in sometimes, a lender may offer a lower introductory rate with temporary reduced margin as an enticement.

Medallion Notary: Notaries working in banks or financial institutions may be asked to provide customers with a “Medallion Signature Guarantee.” Often mistakenly referred to as a “Medallion Notary” or “Medallion Stamp”, this request is not a notarial act. It’s a special type of signature guarantee provided within the banking industry.

A Medallion Signature Guarantee is used primarily when a customer transfers or sells securities, and it represents an assurance by the financial institution that the signature on the transaction is genuine and the financial institution accepts liability for any forgery. These guarantees are performed by specially assigned bank employees.

If you are asked to provide any “Medallion” related services by a customer, explain that Medallion Signature Guarantees are not notarial acts and can only be performed by specially authorized bank personnel.

If a financial institution is not a member of a recognized Medallion Signature Guarantee Program, it would not be able to provide signature guarantees. Also, if a signer is not a customer of a participating financial institution, it is likely the financial institution will not guarantee the signature.

More information about Signature Guarantees is available on the U.S. Securities and Exchange Commission (SEC) website. Anyone who needs a signature guarantor should be directed to a commercial bank, savings bank, credit union, or broker dealer that participates in one of the Medallion Signature Guarantee programs.

Mobile Notary: A notary that travels to you wherever you are to help you get the services you need when you are unable to travel or leave your home or business.

Mortgage/Deed of Trust: This document is recorded in county land records as evidence of the lender’s security interest in the property.

Note: The Note is a written promise to pay a sum of money at a stated interest rate during a specified term. It’s also known as a contract or financial instrument. For example, a note may specify that the borrower is borrowing $500,000 at a 2.70 % interest rate, and will have a certain fixed payment for 15, 20 or 30 years. Note that the Note does not include payments that are impounded in the Escrow Account.

Notice of Right to Cancel: In a refinance transaction on a primary residence, the borrower gets three business days, not including Sundays or holidays, from the day they sign the loan documents to cancel the load should they have a change of heart and decide to cancel.