Texas Real Estate Exam — Memory Tips, Volume 2

Vocabulary flashcards covering core real estate concepts, Texas-specific land legalities, mortgages, settlement, and federal consumer protection rules from Texas Real Estate Exam — Memory Tips, Volume 2.

Indefeasible title

A title that is impossible to defeat by a superior ownership claim.

Granting clause

The deed clause that transfers or gives ownership, whereas the habendum clause describes the ownership interest received.

Covenant of seisin

A deed covenant guaranteeing that the seller owns the property and possesses the estate being conveyed.

Covenant of further assurance

A deed covenant promising future paperwork, where the grantor agrees to take additional steps needed to perfect title.

Cloud on title

An issue such as an unexplained name difference or name mismatch that creates doubt about ownership.

Recorded deed

A deed entered into public records that can be retrieved even if original paper is lost, establishing that lost paper does not equal lost ownership.

County clerk

The public official and office responsible for maintaining a county's deed records.

Title insurance exceptions

Specific items and policy exclusions listed in a title policy that are not covered against loss.

Mortgage forgiveness

An action that eliminates or erases the legal obligation to repay a debt.

Forbearance

An agreement that temporarily postpones, delays, or reduces mortgage loan payments.

Mortgage modification

An adjustment that changes the terms of an existing mortgage agreement rather than replacing the loan.

Refinancing

The process of replacing an existing loan with a new loan.

Acceleration clause

A mortgage provision requiring that all loan amounts become due immediately upon default.

Defeasance clause

A mortgage clause indicating that once the debt is satisfied, the lender's lien is defeated.

Hypothecation

The practice of pledging property as security for a loan without surrendering possession ('pledge it, keep it').

Mortgagee

The money lender in a mortgage transaction.

Mortgagor

The money borrower in a mortgage transaction.

Deficiency judgment

A potential remaining personal liability against a borrower when a foreclosure sale results in a shortfall.

Judicial foreclosure

A foreclosure process that involves a court and a judge.

Nonjudicial foreclosure

A foreclosure carried out under a power of sale without a court judgment, where legally permitted.

Right of redemption

The legal right to reclaim property after foreclosure, where statutory redemption rights exist.

Texas foreclosure-sale notice

A required advance notice period of $21\text{ days}$ for standard Texas nonjudicial foreclosure sales.

Escrow agent

A neutral third party who holds items and funds while strictly following written instructions.

Earnest money

A deposit demonstrating serious intent to purchase, rather than an automatic nonrefundable fee.

Closing Disclosure (CD)

A settlement document that confirms final costs, compared against the initial estimates in the Loan Estimate (LE).

Prorations

The division and allocation of real estate expenses and income proportionally according to ownership time.

Seller's existing loan payoff amount

The total amount required to satisfy a loan, which may include interest and fees rather than just the principal balance alone.

Title clearing

The settlement process in which the seller cures defects so the buyer receives marketable title.

Form 1099-S

An IRS form used to report the sale of real estate, which does not mean tax is automatically withheld.

FIRPTA

Foreign Investment in Real Property Tax Act; requires checking withholding rules when a seller is foreign, as withholding rates are not automatically identical in every transaction.

FIRPTA residence exemption

An exception from withholding for a qualifying buyer purchasing a residence at or below an amount of $\\$300{,}000$$.

RESPA Section 8

A federal consumer protection provision prohibiting improper referral fees, kickbacks, and unearned payments.

RESPA Section 9

A federal consumer protection provision prohibiting a seller from requiring a buyer to use a specific title insurer.

RESPA Section 10

A federal consumer protection provision establishing limits on escrow account reserves and deposits.

RESPA coverage

Scope determined by loan purpose; business-purpose financing may be exempt even when secured by residential property.

Spanish land records

Spanish-language historical documents dating prior to Texas independence that may remain relevant to Texas land title.

Republic land grants

Old land grants from the Republic of Texas era that form historical roots of real property title.

Land league

A historical Texas surveying land measurement equal to approximately $4{,}428\text{ acres}$.

Adverse possession

A method of acquiring title through possession without the owner's permission; hostility in this context does not mean violent.

Permission (Adverse possession)

Authorization from an owner that defeats hostility, an essential requirement of adverse possession.

Ten-year adverse possession

A Texas statutory claim requiring $10\text{ years}$ of possession, generally limited to a maximum of $160\text{ acres}$ without a title instrument, subject to statutory conditions.

Promissory note

A primary lending instrument that creates the legal obligation to repay a debt.

Deed of trust

A legal instrument that secures a debt repayment obligation with real property.

Assumption

A transaction in which the buyer formally agrees to take on personal liability for an existing loan.

Subject to

A transaction in which a buyer acquires property without automatically assuming personal liability for the existing loan.

Lien theory

A legal system in which the borrower retains legal title while the lender holds a lien against the property.

Title theory

A legal system in which the mortgage lender holds legal title to the property as security until the loan is fully repaid.

Title search

An examination of public records to investigate past ownership, liens, and encumbrances on a property.

Title insurance

An insurance policy that protects the policyholder against covered title-related losses and defects.