Mortgage glossary of definitions, meanings, and descriptions of significance for some of our industry's most often used terms and phrases.

P

Parcel 2 Easement -- A colloquial term used to describe an appurtenant easement of the dominant tenement, because the easement is described in the legal description. Usually, the property is described as parcel 1 and the easement as parcel 2.

Parcel Map -- A map allowed in some states as a substitute for a subdivision map for 1 to 4 parcels (lots) with no common area. The procedure is much simpler and less costly than creating subdivision map.

Peroration -- To divide (prorate) property taxes, insurance premiums, rental income, etc., between buyer and seller proportionally to time of use or the date of closing.

PI (Principal and Interest) -- Used to indicate what is included in a monthly payment on real property. If the payment includes only principal and interest, property taxes and hazard insurance would make the total payment higher.

PITI (Principal, Interest, Taxes and Insurance) -- Used to indicate what is included in a monthly payment on real property. Principal, interest, taxes and insurance are the four major portions of a usual monthly payment.

Planned (Unit) Development -- A subdivision of five or more individually owned lots with one or more other parcels owned in common or with reciprocal rights in one or more other parcels. The lots are generally small, being the exact size of the improvements, or slightly larger.

Point of Beginning (POB) -- A term used in metes and bounds descriptions. The description will start with the words "Beginning at a point" and end with "to the point of the beginning".

Power of Attorney -- An authority by which one person (principal) enables another (attorney in fact) to act for him. (1) General power -- Authorizes sale, mortgaging, etc. of all property of the principal. Invalid in some jurisdictions. (2) Special Power -- Specifies property, buyers, price and terms. How specific it must be varies in each state.

Preliminary Title Report -- A report showing the condition of title before a sale or loan transaction. After completion of the transaction, a title insurance policy is issued.

Prepayment Penalty -- A penalty under note, mortgage, or deed of trust, imposed when the loan is paid before it is due.

Prescriptive Easement -- The granting of an easement by a court, based on the presumption that a written easement was given (though none existed), after a period of open and continuous use of land.

Private Mortgage Insurance -- Insurance against a loss by a lender in the event of default by a borrower (mortgagor). The insurance is similar to insurance by a governmental agency such as FHA, except that a private insurance company issues it. The premium is paid by the borrower and is included in the mortgage payment.

Pro Rate -- To divide in proportionate shares, such as taxes, insurance, rent or other items which buyer and seller share as of the time of closing, or other agreed upon time.

Public Records -- Usually at a county level, the records of all documents, which are necessary to give, notice. The records are available to the public. All transactions for real estate sales should be recorded.

Public Report -- A report given to prospective purchasers in a new subdivision, stating the conditions of the area (costs of common facilities, availability of schools, noise factor if near an airport, etc.) issued by the real estate commission.

Purchase Agreement -- An agreement between a buyer and seller of real property.

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