There are two important areas in the brain when it comes to speech and understanding. These are known as Broca's area and Wernicke's area. They are located in the material (side aspect) of the dominant hemisphere if individuals usually Broca's in the posterior part of the frontal lobe and Wernicke's in the posterior of the temporal lobe.
Brocas area is associated with speech production, transforming the cognitive thoughts of speech into verbal sounds. The inability to produce speech is called Broca's Aphasia. Somebody with brooches aphasia knows what they want to say, however cannot generate coherent sounds that from meaning.
Wernicke's area is associated with the comprehension of written and verbal language, a person with a dysfunctional Wernicke's area will be able to verbalise language it will however lack any form of coherent meaning.