PACKAGE MORTGAGE
A type of mortgage used in home financing covering real property, improvements, and movable equipment/appliances.

PARAMOUNT TITLE
Title which is superior or foremost to all others.

PARTICIPATION
Sharing of an interest in a property by a lender. In addition to base interest on mortgage loans on income properties, a percentage of gross income is required, sometimes predicated on certain conditions being fulfilled, such as a minimum occupancy or percentage of net income after expenses, debt service and taxes. Also called equity participation or revenue sharing.

PARTIES (PARTY)
Those entities taking part in a transaction as a principal, e.g., seller, buyer, or lender in a real estate transaction.

PARTITION
A division of real or personal property or the proceeds therefrom among co-owners.

PARTITION ACTION
Court proceedings by which co-owners seek to sever their joint ownership.

PARTNERSHIP
A decision of the California Supreme Court has defined a partnership in the following terms. "A partnership as between partners themselves may be defined to be a contract of two or more persons to unite their property, labor or skill, or some of them, in prosecution of some joint or lawful business, and to share the profits in certain proportions." A voluntary association of two or more persons to carry on a business or venture on terms of mutual participation in profits and losses.

PARTY WALL
A wall erected on the line between two adjoining properties, which are under different ownership, for the use of both properties.

PAR VALUE
Market value, nominal value.

PATENT
Conveyance of title to government land.

PAYMENT ADJUSTMENT DATE
With regard to an adjustable rate mortgage, the date the borrower's monthly principal and interest payment may change.

PAYMENT CAP
With regard to an adjustable rate mortgage, this limits the amount of increase in the borrower's monthly principal and interest at the payment adjustment date, if the principal and interest increase called for by the interest rate increase exceeds the payment cap percentage. This limitation is often at the borrower's option and may result in negative amortization.

PAYMENT RATE
With respect to an adjustable rate mortgage, the rate at which the borrower repays the loan reflects buydowns or payment caps.

PENALTY
An extra payment or charge required of the borrower for deviating from the terms of the original loan agreement. Usually levied for being late in making regular payment or for paying off the loan before it is due, known as "late charges" and "prepayment penalties".

PERCENTAGE LEASE
Lease on the property, the rental for which is determined by amount of business done by the lessee; usually a percentage of gross receipts from the business with provision for a minimum rental.

PERIMETER HEATING
Baseboard heating, or any system in which the heat registers are located along the outside walls of a room, especially under the windows.

PERIODIC INTEREST RATE CAP
With respect to an adjustable rate mortgage, limits the increase or decrease in the note rate at each rate adjustment, thereby limiting the borrower's payment increase or decrease at the time of adjustment.

PERSONAL PROPERTY
Any property which is not real property.

PHYSICAL DETERIORATION
Impairment of condition. Loss in value brought about by wear and tear, disintegration, use and actions of the elements; termed curable and incurable.

PLAINTIFF
In a court action, the one who sues; the complainant.

PLANNED DEVELOPMENT
A subdivision consisting of separately owned parcels of land together with membership in an association which owns common area. Sometimes the owners of separate interests also have an undivided interest in the common area.

PLANNED UNIT DEVELOPMENT
(PUD) A term sometimes used to describe a planned development. A planning and zoning term describing land not subject to conventional zoning to permit clustering of residences or other characteristics of the project which differ from normal zoning.

PLANNING COMMISSION
An agency of local government charged with planning the development, redevelopment or preservation of an area.

PLAT (of survey)
A map of land made by a surveyor showing the boundaries, buildings, and other improvements.

PLEDGE
The depositing of personal property by a debtor with a creditor as security for a debt or engagement.

PLEDGEE
One who is given a pledge or a security. (See definition of Secured Party.)

PLEDGOR
One who offers a pledge or gives security. (See definition of debtor.)

PLOTTAGE
A term used in appraising to designate the increased value of two or more contiguous lots when they are joined under single ownership and available for use as a larger single lot. Also called assemblage.

PLOTTAGE INCREMENT
The appreciation in unit value created by joining smaller ownerships into one large single ownership.

POINTS
See Discount Points.

POLICE POWER
The right of the State to enact laws and enforce them for the order, safety, health, morals and general welfare of the public.

POWER OF ATTORNEY
A written instrument whereby a principal gives authority to an agent. The agent acting under such a grant is sometimes called an attorney in fact.

POWER OF SALE
The power of a mortgagee or trustee when the instrument so provides to sell the secured property without judicial proceedings if a borrower defaults in payment of the promissory note or otherwise breaches the terms of the mortgage or deed of trust.

PREFABRICATED HOUSE
A house manufactured and sometimes partly assembled before delivery to building site.

PREFERRED STOCK
A class of corporate stock entitled to preferential treatment such as priority in distribution of dividends.

PREPAID ITEMS OF EXPENSE
Prorations of prepaid items of expense which are credited to the seller in the closing escrow statement.

PREPAYMENT
Provision made for loan payments to be larger than those specified in the note.

PREPAYMENT PENALTY
The charge payable to a lender by a borrower under the terms of the loan agreement if the borrower pays off the outstanding principal balance of the loan prior to its maturity.

PRESCRIPTION
The means of acquiring incorporeal interests in land, usually an easement, by immemorial or long continued use. The time is ordinarily the term of the statute of limitations.

PRESUMPTION
An assumption of fact that the law requires to be made from another fact or group of facts found or otherwise established in the section.

PRIMA FACIE
Latin meaning first sight, a fact presumed to be true until disproved.

PRINCIPAL
This term is used to mean the employer of an agent; or the amount of money borrowed, or the amount of the loan. Also, one of the main parties in a real estate transaction, such as a buyer, borrower, seller, lessor.

PRINCIPAL NOTE
The promissory note which is secured by the mortgage or trust deed.

PRIOR LIEN
A lien which is senior or superior to others.

PRIORITY OF LIEN
The order in which liens are given legal precedence or preference.

PRIVATE MORTGAGE INSURANCE
Mortgage guaranty insurance available to conventional lenders on the first, high risk portion of a loan (PMI).

PRIVITY
Mutual relationship to the same rights of property, contractual relationship.

PRIVITY OF CONTRACT
The relationship which exists between the persons who are parties to a contract.

PROCURING CAUSE
That cause originating from a series of events that, without break in continuity, results in the prime object of an agent's employment producing a final buyer; the real estate agent who first procures a ready, willing, and able buyer for the agreed upon price and terms and is entitled to the commission.

PROGRESS PAYMENTS
Scheduled, periodic, and partial payment of construction loan funds to a builder as each construction stage is completed.

PROGRESSION, PRINCIPLE OF
The worth of a lesser valued residence tends to be enhanced by association with higher valued residences in the same area.

PROMISSORY NOTE
Following a loan commitment from the lender, the borrower signs a note, promising to repay the loan under stipulated terms. The promissory note establishes personal liability for its payment. The evidence of the debt.

PROPERTY
Everything capable of being owned and acquired lawfully. The rights of ownership. The right to use, possess, enjoy, and dispose of a thing in every legal way and to exclude everyone else from interfering with these rights. Property is classified into two groups, personal property and real property.

PROPERTY MANAGEMENT
A branch of the real estate business involving the marketing, operation, maintenance and day-to-day financing of rental properties.

PRO RATA
In proportion; according to a certain percentage or proportion of a whole.

PRORATION
Adjustments of interest, taxes, and insurance, etc., on a pro rata basis as of the closing or agreed upon date. Fire insurance is normally paid for three years in advance. If a property is sold during this time, the seller wants a refund on that portion of the advance payment that has not been used at the time the title to the property is transferred. For example, if the property is sold two years later, seller will want to receive 1/3 of the advance premium that was paid. Usually done in escrow by escrow holder at time of closing the transaction.

PRORATION OF TAXES
To divide or prorate the taxes equally or proportionately to time of use, usually between seller and buyer.

PROXIMATE CAUSE
That cause of an event which, in a natural and continuous sequence unbroken by any new cause, produced that event, and without which the event would not have happened. Also, the procuring cause.

PUBLIC RECORDS
Records which by law impart constructive notice of matters relating to land.

PUBLIC TRUSTEE
The county public official whose office has been created by statute to whom title to real property in certain states, e.g., Colorado, is conveyed by Trust Deed for the use and benefit of the beneficiary, who usually is the lender.

PURCHASE AND INSTALLMENT SALEBACK
Involves purchase of the property upon completion of construction and immediate saleback on a longterm installment contract.

PURCHASE OF LAND, LEASEBACK AND LEASEHOLD MORTGAGES
An arrangement whereby land is purchased by the lender and leased back to the developer with a mortgage negotiated on the resulting leasehold of the income property constructed. The lender receives an annual ground rent, plus a percentage of income from the property.

PURCHASE AND LEASEBACK
Involves the purchase of property by buyer and immediate leaseback to seller.

PURCHASE MONEY MORTGAGE OR TRUST DEED
A trust deed or mortgage given as part or all of the purchase consideration for real property. In some states the purchase money mortgage or trust deed loan can be made by a seller who extends credit to the buyer of property or by a third party lender (typically a financial institution) that makes a loan to the buyer of real property for a portion of the purchase price to be paid for the property. In many states there are legal limitations upon mortgagees and trust deed beneficiaries collecting deficiency judgments against the purchase money borrower after the collateral hypothecated under such security instruments has been sold through the foreclosure process. Generally no deficiency judgment is allowed if the collateral property under the mortgage or trust deed is residential property of four units or less with the debtor occupying the property as a place of residence.