Glossary of Debt Related Terms

Easement

A right created by grant, reservation, agreement, prescription, or necessary implication, which one has in the land of another. It is either for the benefit of land (appurtenant), such as right to cross A to get to B. or "in gross," such as a public utility easement.

Easement of Necessity

An easement granted by a court when itis determined that said easement is absolutely necessary for the use and enjoyment of the land. Commonly given to landlocked parcels.

Egress

A term concerning a right to come and go across the land (public or private) of another. Usually part of the term ingress and egress.

Electronic Fund Transfer (EFT) Systems

A variety of systems and technologies for transferring funds electronically rather than by check.

Electronic Payment

A time saving payment method where your loan payment is automatically deducted from your checking or savings account. You may be able to get a lower interest rate and you don't have to mail in your payment each month. You may also be able to choose your payment date.

Eleemosynary Corporation

A corporation created for charitable purposes. There are tax advantages accorded to such corporations. The corporation may operate the same as a profit making corporation. Commonly called a nonprofit corporation.

Encumbrance, Incumbrance

A claim, lien, charge, or liability attached to and binding real property. Any right to, or interest in, land which may exist in one other than the owner, but which will not prevent the transfer of fee title.

Equal Credit Opportunity Act (ECOA)

Is a federal law that requires lenders and other creditors to make credit equally available without discrimination based on race, color, religion, national origin, age, sex, marital status or receipt of income from public assistance programs.

Equitable Conversion

A legal fiction applied to a land contract which treats the vendee's (buyer's) interest as a real property interest even though the seller holds legal title, and the seller's interest as a security interest (personal property). This enables the buyer to act as the "owner" of the property without having "legal" title.

Equitable Mortgage

(1) A lien against real property (mortgage)which is enforceable in a court of equity, but does not legally constitute a mortgage. (2) A deed given as security for a debt will be held to be a mortgage rather than a transfer of title. Also called a constructive mortgage.

Equity

The difference between the fair market value and current indebtedness, also referred to as the owner's interest.

Equity Line Of Credit

A combination of a line of credit and equity loan. A maximum loan amount is established based on credit and equity. A mortgage (deed of trust) is recorded against the potential borrower's property for said maximum loan amount. The potential borrower has the right to borrow, as needed, up to the amount of the mortgage.

Escalation Clause

A clause in a lease providing for an increased rental at a future time. May be accomplished by several types of clauses, such as (1) Fixed increase - A clause which calls for a definite, periodic rental increase. (2) Cost of living - A clause which ties the rent to a government cost of living index, with periodic adjustments as the index changes. (3) Direct expense - The rent is adjusted according to changes in the expenses of the property paid by the lessor, such as tax increases. increased maintenance costs, etc.

Escrow

Delivery of a deed by a grantor to a third party for delivery to the grantee upon the happening of a contingent event, Modernly, in some states, all instruments necessary to the sale (including funds) are delivered to a third (neutral) party, with instructions as to their use.

Exception

A provision in a title insurance binder or policy excludes liability for a specified title defect or an outstanding encumbrance.

Excess Condemnation

Taking by right of eminent domain, more property than actually necessary for the intended purpose. This happens frequently, the excess property being sold at auction after completion of the project.

Exclusive Listing

A written contract between a property ownerand a real estate broker, whereby the owner promises to pay a fee or commission to the broker it certain real property of the owner is sold during a stated period, regardless of whether the broker is or is not the cause of the sale. The broker promises to put forth his or her best efforts to sell the property, and may make specific promises as to advertising or other promotion in certain instances.

Exemplary Damages

Damages to punish (make an example of) the offender. This is done when the wrong is deliberate or grossly negligent and compensatory damages do not appear to be sufficient.

Expert Testimony

Testimony by one acknowledged to have special training and knowledge in a particular subject. Only testimony on the subject in which the witness is "expert" is considered expert testimony.

Exposure

(1) The degree to which a property for sale, lease, etc., is made noticeable (exposed) to potential buyers, tenants, etc., through advertising, multiple listing groups, etc. (2) The direction in which a property faces. For example: Does a store depending on walk-in trade face the sun in the morning when people walk in the sun to get warm (eastern exposure), or face the sun in the afternoon when people walk in the shade to keep cool (western exposure).