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HOME LOAN DICTIONARY D

Datum Plane - A surveyor's plane from which elevations and depths are measured.

Debt -  A sum of money due by certain and express agreement. 

Debt Capital - Money raised by a business by borrowing through bonds or other debentures.  

Debt Service - The total amount of debt (credit cards, mortgage, car loans, student loans, etc). that an individual or business owes at any one time.  In commercial lending it may refer to the principal and interest payments on a mortgage.

Declaration of Homestead - A legal, written and recorded document that provides certain protections against a forced sale of a primary residence.  See. Homestead Exemption.  

Declining Balance Depreciation - An accelerated method of depreciation used for tax purposes, whereby a percentage of the straight-line depreciation is taken from a constantly declining balance.

Dedication - The gift of real property to a governmental unity, usually by a subdivider in order to gain approval.  If the dedication is given for a particular purpose and that purpose is later abandoned, then the land dedicated may revert to the grantor.

Deed -  The formal written document that transfers the rights of ownership and possession (that is, the title) from the seller to the buyer.

Deed in Lieu of Foreclosure -  A transfer of title to real property, from a delinquent mortgagor to the mortgagee,  given voluntarily to satisfy the balance due on a defaulted loan and to avoid foreclosure proceedings. It may not wipe out junior encumbrances.  Also called voluntary conveyance.  

Deed of Reconveyance - A deed given by the trustee to the trustor when the trustor has paid the beneficiary in full.  Used for trust deeds to remove the lien in the same manner as a satisfaction is used to remove a mortgage.

Deed of Trust -   A legal document which conveys title to real estate to a disinterested third party (trustee) who holds the title until the owner of the property has repaid the debt.  In states where it is used, a deed of trust accomplishes essentially the same purpose as a regular mortgage.  Also called trust deed or trust indenture.  In some states, this is used in place of a mortgage.  Three people are involved in a deed of trust: the borrower, the lender, the trustee.  The borrower transfers the legal title for the property to the trustee who holds the property as a security for the debt.  If the borrower pays the mortgage as agreed, the trustee gives the legal title to the owner.  If the borrower does not pay the mortgage as agreed, the trustee can sell the property. (See Mortgage.)

Deed Restrictions - Clauses in a deed to real estate limiting the future uses of the property (i.e. limit the number of buildings, their design, or type of construction).

De Facto - Latin phrase that means "in fact," or "actually."

Default -  1) A breach or non-performance of the terms of a note or the covenants of a mortgage or deed of trust. 2) The failure to do what is required by law or the terms of a contract.  

Default Clause - A mortgage provision that allows a junior lienholder to cure any default of a prior lien (and then foreclose on his/her own lien).

Defeasance Clause - A mortgage provision that defeats (or cancels) the mortgage upon the full payment as agreed or provides for forfeiture should the conditions not be fulfilled.

Defeasible Estate - An estate that can be lost should a certain event take place.

Defective Title - A title that is unmarketable or unable to be transferred in its current condition.

Deferred Interest -  With adjustable-rate mortgages (ARMs), if monthly payments do not cover the interest cost, the interest left unpaid is deferred to later years by adding it to the unpaid principal balance.  In subsequent months, charged interest is added to this unpaid interest.  Many lenders limit deferred interest.  For example, by not allowing it to go above 125% of the original mortgage loan balance.  If the unpaid balance exceeds the limit placed by the lender, the borrower can no longer defer interest and must begin making payments large enough to fully pay what is due over the remaining term.  In this case, the payments can increase suddenly and significantly.  Deferred interest can occur when choosing a graduated payment option(see Graduated payments), where the loan states out below current rates but an agreement to pay the difference (the deferred interest) in later years is made.  Deferred interest can also occur when choosing a monthly payment cap. (See Cap)  

Deferred Maintenance - Maintenance that has been neglected.

Deficiency Judgment -  In the event that the sale of a foreclosed property does not provide an amount of money sufficient to cover the balances due on the loan, a judgment may be sought against the borrower, who is personally liable for the difference.  If the deficiency is granted by the court, this judgment can be collected from the borrower from other property, other assets owned or by garnishment.  

Defunct - No longer in effect or use. 

Degree - A measurement for angles used in metes-and-bounds descriptions.  One degree (1°) is 1/360 of a circle.

De Jure - Latin for "by right," "lawful," and "legitimate." 

Delinquency - See Delinquent.

Delinquent -  A loan payment that has not been received 30 days after its due date.  

Delivery - The actual transfer of an interest; require the intent to make an irrevocable offer.

Demand Letter -  A notice issued to a borrower, warning of the imminent danger of foreclosure.

De Minimus PUD -  A planned unit development (PUD) in which the common areas are of minimal value and have little influence on the enjoyment of the premises or the value of the property.  

Demise - The transfer of a leasehold interest.

Department of Housing and Urban Development - A department within the government that is responsible for the implementation and administration of government housing and urban development programs.

Deposit -  With reference to the sale of real estate, a sum of money given to either bind a sale of real estate or assure payment or an advance of funds in the processing of a loan.  Also known as earnest money.  

Depreciated Cost - The reproduction or replacement cost of a building minus the accrued depreciation at a specific point in time.

Depreciation -  A lowering of value based on physical deterioration or functional or economic obsolescence.

Depth of Coverage -  The percentage of the loan balance that is protected by mortgage guaranty insurance.  

Depth Table - An appraiser's table that determines additional value attributable to additional depth. 

Dereliction - Land that is created by the recession of water.  It belongs to the adjacent landowners.

Determinable Fee - An interest in property that may last forever.  However if certain contingencies are not satisfied, title automatically terminates.

Developer -  A person or entity that prepares undeveloped land for building sites and sometimes builds on the sites.

Development Loan -  A short-term loan, advanced before a construction loan, obtained by developers from lenders to acquire land and install basic utilities such as roads, sewers, water supply systems. etc.  

Development Method - Appraisal method to determine land value where cost of development is deducted from estimated value after development.

Devise - A gift of real property by a will.

Diluvian - The gradual erosion of soil along a river bank.

Direct Costs - Construction costs that are involved with either site preparation or building construction, including fixtures. 

Direct Endorsement - A lender authorized to underwrite FHA loans without FHA approval.

Disbursements -  Payments made during the course of an escrow or at closing.  

Discharge Statement - A statement releasing a person from a debt, usually as a result from full payment of a mortgage or satisfaction of a note.

Discount -  The amount of money, usually stated as a percentage, deducted from the face value of a note.  The borrower receives the net amount after the discount has been deducted.  The discount is computed to give the effective rates of interest agreed upon.  

Discounting a Loan - Selling a loan for less than its face value (common with second mortgages or loans bearing low interest rates).

Disintermediation - The flow of funds out of savings institutions into short-term investments in which the interest rates are higher.  This shift normally results in a net decrease in the amount of funds available for long-term real estate financing.  Also, the market condition that exists when the shift occurs.  

Disposal Field - A drainage area, which should not be close to the water supply, where waste from a septic tank is dispersed into the ground through tile and gravel. 

Divisa - A recognized boundary. 

Documentary Stamps - See Revenue Stamps.

Domicile - A person's home.  

Dominant Tenement - The land benefited by an appurtenant easement; an estate whose owners are entitled to the beneficial use of another property. 

Double Escrow - The use of one escrow to purchase and resell a property. 

Dower - A wife's common-law right in the estate of her husband should she survive him.  In some states it is a statutory right, such as one-third interest.

Down Payment - The difference between the sales price of real estate and the amount of the mortgage loan. Also defined as the initial cash investment in purchasing real estate, usually a small percentage of the sales price. 

Downzoning - A change in zoning resulting in a lower-density use or lower use. 

Dragnet Clause - A provision extending a mortgage to cover future obligations that may arise between the parties; used in an open-end mortgage.

Dual Agency - Agency created when the broker represents both the buyer and the seller for the same transaction. 

Due Date - A fixed time for a payment.

Due On Sale Clause -  A clause allowing the lender to demand payment of the entire loan balance upon sale or other transfer of title by the borrower to a third party.  

Duress - Use of force or threat to make a person act; makes a contract voidable.