| Land | In a legal sense, the solid part of the surface of the earth, as distinguished from water; any ground, soil or earth whatsoever regarded as the subject of ownership and everything annexed to it, whether by nature, e.g., trees and everything in or on it, such as minerals and running water, or annexed to it by man; e.g., buildings, fences, etc. In an economic sense, land consists of all those elements in the wealth of a nation which is supposed to be furnished by nature as distinguished from those improvements which owe their value to the labor and organizing power of man. |
| Land Contract | Installment plan for buying a house. It is used as an alternative to obtaining a loan from a traditional, source such as a mortgage banker or savings and loan. |
| Late Charge or Late Payment | A penalty for failure to pay an installment on time.ß The penalty a borrower must pay when a payment is made a stated number of days (usually 15) after the due date. |
| Latent Defect | Hidden structural defect. |
| Lease | A written agreement between the property owner and a tenant that stipulates the conditions under which the tenant may possess the real estate for a specified period of time and rent. |
| Lease with Option to Purchase | A lease under which the lessee has the right to purchase the property. The option may run for the length of the lease or only for a portion of the lease period. |
| Leasehold Estate | 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. |
| Legal Description | An expanded and unique description of a property that is used on legal documents, such as deeds and deeds of trust. Recorded documents generally require a legal description.ß A property description, recognized by law that is sufficient to locate and identify the property without oral testimony. |
| Lender | A general term encompassing all mortgages, and beneficiaries under deeds of trust. Or an institution that makes loans to borrowers on real estate. |
| Lender's Instructions | A document that lenders prepare for the closing agent that outlines the requirements for loan closing. |
| Lessee | One who possesses the right to use or occupy a property under lease agreement. |
| Lessor | One who holds title to and conveys the right to use and occupy a property under lease agreement. |
| Letter of Intent | A formal method of stating that a prospective developer, buyer or lessee is interested in property. |
| Liabilities | A person's financial obligations. Liabilities include long-term and short-term debt, as well as any other amounts that are owed to others. |
| Liabilities 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. |
| Lien | An encumbrance against property for the payment of debt; a lien may be a mechanic's lien, mortgage, unpaid taxes or judgment. |
| Life Estate | An estate in real property for the life of a living person. The estate then reverts back to the grantor or to a third party. |
| Lifetime Cap | A provision of an ARM that limits the total increase in interest rates over the life of the loan. |
| Lifetime Payment Cap | For an adjustable-rate mortgage (ARM), a limit on the amount that payments can increase or decrease over the life of the mortgage. |
| Limited Partnership | A partnership consisting of one or more general partners who conduct the business and are responsible for losses, and one or more special partners, who contributes capital and are liable only to the amount contributed. |
| Line of Credit | An agreement by a commercial bank or other financial institution to extend credit up to a certain amount for a certain time to a specified borrower. |
| Liquid Asset | A cash asset or an asset that is easily converted into cash. |
| Lis Pen dens | A public notice that litigation is pending on a property. |
| Listing | A record of property for sale by a broker who has been authorized by the owner to sell. Also used to denote the property so listed. |
| Listing Agreement | Agreement between a property owner and a real estate broker, authorizing the broker to find a buyer for the property. If the sale is consummated, the listing broker will be paid a fee. |
| Loan | A sum of borrowed money (principal) that is generally repaid with interest. |
| Loan Commitment | Formal offer by a lender stating the terms under which it agrees to loan money to a homebuyer. |
| Loan Discount/Premium Fees | Fees that borrowers pay (sometimes seller will pay for borrower) that adjust to the yield requirement of the investor. Loan discount denotes an investor yield requirement higher than the note rate. Loan premium denotes an investor yield requirement lower than the note rate. |
| Loan Fees | Other costs that are incurred when a real estate loan is closed including incidental recording, delivery, wire, etc. |
| Loan Lock | Guarantee from a lender that a borrower will receive the interest rate in effect at the time of loan application. |
| Loan Officer | A person that helps borrowers through the loan selection, processing, and closing of a mortgage loan. Loan officers can be paid a commission or salary for their services and can work for mortgage brokers, mortgage bankers, or depository institutions. |
| Loan Origination | The process by which a mortgage lender brings into existence a mortgage secured by real property. |
| Loan Origination Fees | The cost to obtain a loan that is paid to the originating lender or broker. |
| Loan Package | The information regarding a borrower and property necessary which is the basis for a lender's credit decision to extend or deny credit. |
| Loan Ratio | The amount of a loan to the value or selling price of real property. |
| Loan Servicing | The function of collecting loan payments, managing the property tax and insurance escrows, foreclosing on defaulted loans and remitting payments to the investor/beneficiary.ß |
| Loan-to-Value Ratio | The percentage comparison between the unpaid principal balance of the mortgage and the sales price or the appraised value of the property. Whichever is lower. (LTV). The loan-to-value ratio (LTV) is the original loan amount divided by the lower of the sales price or the appraised value. ß |
| Lock | The period, expressed in days, during which a lender will guarantee a rate. ß |
| Lock-in-period | The time period during which the lender has guaranteed an interest rate to a borrower. |
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