Real Estate Glossary and Dictionary

for Tax Lien P Terms

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PACER - Public Access to Court Electronic Records, which provides a quick and efficient manner to check on a variety of questions concerning bankruptcy cases. 

Package mortgage - Mortgage covering both real and personal property.

Paper - A mortgage, deed of trust or land contract provided instead of cash.

Parol Evidence Rule - A rule of evidence designed to achieve a degree of certainty in a transaction and to prevent fraudulent and perjured claims. Although the word parol means oral, in this context, it refers to evidence that is extrinsic to, or outside and separate from, the writing. (Must be in writing to be enforceable in court)

Partial Claim - A form of loss mitigation associated with servicing HUD insured loans where HUD will pay a claim to the lender for up to 12 months of PITI. The borrower must be at least four months’ delinquent to qualify.

Partial Claim Provision - A particular Loss Mitigation workout provision offered through HUD.

Partial release (partial release clause) - A provision in a mortgage that excludes some portion of the collateral property from obligation. The borrower may obtain the release of any one lot or parcel from the lien by repaying a definite amount of the loan.

Partially Amortized Mortgage - A method of loan repayment in which the balance of the outstanding loan is not zero at maturity, and thus a balloon payment is due at that time.

Participation clause - A clause that allows the landlord to pass along to the tenants any increases in taxes or insurance. Also called escalator clause.

Participation loan - A mortgage loan whereby the lender receives interest plus a percentage of the income generated from income producing properties.

Participation mortgage - A mortgage that allows the lender to share in part of the income or resale proceeds.

Partition suit - The dividing of real estate held by two or more people which results in each of the parties holding individual or severalty ownership. (Tenants in common and joint tenants)

Penalty - Money one will pay for breaking a law or violating part or all of the terms of a contract.

Percentage Lease - The lessor receives a percentage of the gross sales or net profits as the rental payment for the lease of the property.

Percolation - Ability of soil to absorb water; used for septic systems.

Performing paper - loans or ‘paper’ where payments are being made on time. (See “non-performing loans.”)

Periodic Tenancy - A lease, which has the original terms automatically renewed for successive periods, until proper notice to terminate is given by either the landlord or tenant. Month to month rental.

Permanent injunction - A court order permanently preventing a lender from foreclosing on a property.

Permit - A document issued by a government regulatory authority that allows the bearer to take some specific action. An occupancy permit, for example, allows the owner of a building to occupy or rent the building.

Personal Property - Movables, which are not annexed to or part of, the land; also referred to as chattels

Petition - A formal written request filed with the court requesting that something specific be done.

PITI - The shorthand way of stating the most usual elements of a residential mortgage payment which may consist not only of the Principal and Interest (PI) but the property taxes (T) and hazard insurance (I) as well. In the case where all four elements are part of the payment, the lender escrows the T and I and pays them on behalf of the borrower when they come due. Some loans are written such that the payment to the lender consists only of the P and I in which case the borrower pays the taxes and insurance directly.

Planned unit development (PUD) - A zoning classification that allows flexibility in the design of a subdivision. Pods include individually owned units as well as some common space that is owned jointly.

Planning Commission - A local government agency which determines plans for the physical growth of a community.

Plat - A plan or map of a specific land area.

Plat book - A public record containing maps of land, showing the division of the land into streets, blocks and lots and indicating the measurements of the individual parcels.

PMI (private mortgage insurance) - In the event that the borrower does not have a 20 percent down payment, lenders will allow a smaller down payment - as low as 2 or 3 percent in some cases. With a smaller down payment, however, borrowers usually are required to carry PMI to protect the lender in case of default. Private mortgage insurance payments normally are made annually or monthly, but the cost of PMI may be reduced by making an initial payment at settlement.

Planned Unit Development (PUD) - Type of subdivision, whereby one purchases home and lot as separate property, plus membership in a community association that owns the common areas. Common areas may include open areas between houses, pools, clubhouse facilities, parks, golf course, boat docks, horse trails, etc.

Plan of reorganization - An agreement between the debtor and creditors, and approved by the bankruptcy court in a Chapter 11 case, for repayment of debts pursuant to a specific schedule.

Pleadings - The formal allegations by the parties of their respective claims and defenses as presented to the court for a ruling.

Points - Lenders charge points to increase the yield of the mortgage and cover loan closing costs. These points usually are collected at settlement and may be paid by the borrower or the home seller or split between them. One point equals 1 percent of the loan amount. On a $250,000 loan, one point costs $2,500. Points may be classified further into origination points or discount points.

Police Power - The inherent power of the state to regulate in order to promote public health, safety, morality or welfare. For example, zoning and building codes.

Pooling - The process of grouping together mortgage loans with similar characteristics.

Portfolio loan - A loan that is held as an investment by a bank or savings and loan and not sold on the secondary market to investors.

Positive cash flow - When there is more net income/take-home pay than expenses.

Positive Equity - The situation in which a house has a value in excess of what is due on the mortgage.

Possession and Entry Foreclosure (Foreclosure by Possession) - A foreclosure available to lenders.

Possibility of Reverter - The right retained when a fee simple determinable is granted.

Post-endorsement fees and charges - Fees and charges permitted to be charged to the borrower subsequent to the HUD endorsement of the loan (see Chapter Eleven of this book for further information).

Posting - Refers to affixing a foreclosure notice to a door, post or wall on the property being foreclosed.

Post-petition payment - A payment that becomes due subsequent to the filing of bankruptcy by the debtor. For example, if the bankruptcy petition is filed March 3, the payment due March 1 would be a pre-petition payment, while the payment due April 1 would be a post-petition payment.

Power of attorney - A written document authorizing a person to act as the agent on behalf of another person to the extent indicated in the ‘power of attorney.’ That person does not have to be an attorney. (See “attorney-in­fact.”)

Power of sale - A clause found in a mortgage or deed of trust that grants the lender the power, upon default by the borrower, to advertise and sell the property at public auction without first obtaining authorization from the court. Power of Sale foreclosures must be completed within the constraints of governing state law. (see Statutory Foreclosure)

Pre-claim advance (“BAP”) - A particular Workout Program offered by many private mortgage insurance companies. BAP stands for “borrower’s assistance program.”

Predatory Lending - Predatory lending is a pejorative term used to describe practices of some lenders. There are no legal definitions in the United States of predatory lending, though there are laws against many of the specific practices commonly identified as predatory, and various federal agencies use the term as a catch-all term for many specific illegal activities in the loan industry.

One less contentious definition of the term is "the practice of a lender deceptively convincing borrowers to agree to unfair and abusive loan terms, or systematically violating those terms in ways that make it difficult for the borrower to defend against”. Other types of lending sometimes also referred to as predatory include payday loans, credit cards or other forms of consumer debt, and overdraft loans, when the interest rates are considered unreasonably high.

Although predatory lenders are most likely to target the less educated, racial minorities and the elderly, victims of predatory lending are represented across all demographics.

Predatory lending often occurs on loans backed by some kind of collateral, such as a car or house, so that if the borrower defaults on the loan, the lender can repossess or foreclose and profit by selling the repossessed or foreclosed property.

Preferential transfer - A payment made by the debtor within a certain time period prior to a bankruptcy filing on a debt that, in effect, favors one creditor over another.

Pre-foreclosure sale provision - A provision offered through HUD for the sale of one’s home prior to a foreclosure auction.

Preforeclosure sale - See Short Sale.

Prepaid interest - Interest charged to borrowers at closing to pay for the cost of borrowing for the balance of a month. For example, if a loan closes on the 20^th of the month and the first payment is due on the first of the following month, the lender will charge 11 days of prepaid interest.

Prepayment - Full or partial payment of the principal before the due date. This occurs if the borrower makes extra payments, sells the property or refinances the existing loan.

Prepayment Clause - A clause in a mortgage that gives a mortgagor the privilege of paying the mortgage indebtedness before it becomes due.

Prepayment penalty - Fees paid by the borrower if the loan is paid off before its due date. A prepayment penalty may limit the borrower’s ability to refinance a loan or even sell the property.

Prescription - A means of acquiring title to property through open and continuous use.

Prescriptive Easement - An easement obtained by the open, notorious, hostile and continuous use of the property belonging to someone else for a statutory period of time.(POACH)

Prima Facia - Literally, “on its face.” A fact presumed to be true unless disproved by some evidence to the contrary.

Primary mortgage market - Companies that originate and service mortgage loans (banks, savings and loans, credit unions, mortgage bankers, institutional lenders) make up the primary mortgage market. (See also “secondary mortgage market.”)

Prime Rate - The lowest commercial interest rate charged by a bank on short-term loans to the most credit-worthy customers.

Principal – (1) The outstanding balance on a loan, (2) one who employs an agent

Principal payment - A payment that is applied entirely to the principal balance of the loan.

Privately-held mortgage - A mortgage wherein the mortgagee is an individual rather than a mortgage company or bank.

Private mortgage insurance - insurance premium paid by a borrower to protect lenders against losses from loans with loan-to-value ratios higher than 80%, default insurance for lenders. In the event that you do not have a 20 percent down payment, lenders will allow a smaller down payment – as low as 5 percent in some cases. With the smaller down payment loans, however, borrowers are usually required to carry private mortgage insurance. Private mortgage insurance will usually require an initial premium payment and may require an additional monthly fee depending on your loan’s structure.. (See “PMI.”)

Private Sale - A sheriff’s (trustee) sale conducted in a non-judicial foreclosure.

Promissory note - (See “note.”) A written agreement, contract or promise to repay money that has been loaned.

Pro Forma - refers to the presentation of data, such as a balance of income statement, where certain amounts are hypothetical. For example, a pro forma balance sheet might show a debt issue that has been proposed but has not been consummated.

Pro-rata - To divide or distribute proportionately

Probate - The process of establishing the validity of a will before a duly authorized court or person. Once validity is confirmed, the probate court then administers the sale of property as directed by the will or as authorized by the court to settle any financial obligations.

Procuring Cause - The actions by a broker which result in the owner being able to make a sale.

Promissory Note - The primary legal financing obligation in which the borrower promises to pay back a sum of money borrowed. (A contract)

Proof of claim - A claim filed by the creditor with the bankruptcy court evidencing proof of the debt owed, both total debt and the amount that is delinquent. Typically filed in Chapter 7 asset cases and Chapter 11 and 13 cases.

Property tax - A government levy based on the market value (as assessed by the county assessor’s office) of the property.

Prorate - To divide proportionately. Taxes, insurance, rent, or other charges can be prorated.

Prothonotary - The title given to an officer of the court or clerk. Commonly used in the states of Pennsylvania, Connecticut and Delaware.

Public sale - An auction of property made available to the general public.

Publication - To make public notice. Notices are published such as in a newspaper of general circulation in the judicial district in which the real property is located and the Notice of Sale (i.e. Sheriff’s Sale or Trustee’s Sale) is made.

Publication notice - The notice that is published, depending on each states laws. It usually must also be posted in a conspicuous place on the real property, and in one public place, usually the bulletin board in the County Courthouse.

Puffing - To exaggerate - for example, to refer to a house as having "the most gorgeous view in the city."

Purchase agreement - See “agreement of sale.”

Purchase and Leaseback - The simultaneous buying of property and leasing it back to the seller.

Purchase money - The actual money paid for a property while the balance may be secured by a purchase money mortgage. The down payment, or earnest money, paid toward the purchase of a property.

Purchase money mortgage - A mortgage or security instrument given to fund the purchase of a property.

Purchase Subject to Mortgage - a purchase in which a buyer agrees to make the monthly mortgage payments on an existing mortgage and the original borrower remains liable if the purchaser fails to make the payments as agreed.

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