Mortgage Glossary
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Fair Credit Reporting Act
A consumer protection law that regulates the disclosure of consumer credit reports by consumer/credit reporting agencies and establishes procedures for correcting mistakes on one's credit record.
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fair market value
The highest price that a buyer, willing but not compelled to buy, would pay, and the lowest a seller, willing but not compelled to sell, would accept.
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Fannie Mae
A congressionally chartered, shareholder-owned company that is the nation's largest supplier of home mortgage funds. Fannie Mae
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Federal Housing Administration (FHA)
An agency of the U.S. Department of Housing and Urban Development (HUD). Its main activity is the insuring of residential mortgage loans made by private lenders. The FHA sets standards for construction and underwriting but does not lend money or plan or construct housing. FHA, HUD
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fee simple
The greatest possible interest a person can have in real estate.
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fee simple estate
An unconditional, unlimited estate of inheritance that represents the greatest estate and most extensive interest in land that can be enjoyed. It is of perpetual duration. When the real estate is in a condominium project, the unit owner is the exclusive owner only of the air space within his or her portion of the building (the unit) and is an owner in common with respect to the land and other common portions of the property.
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FHA coinsured mortgage
A mortgage (under FHA Section 244) for which the Federal Housing Administration (FHA) and the originating lender share the risk of loss in the event of the mortgagor's default.
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FHA mortgage
A mortgage that is insured by the Federal Housing Administration (FHA). Also known as a government mortgage.
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finder's fee
A fee or commission paid to a mortgage broker for finding a mortgage loan for a prospective borrower.
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firm commitment
A lender’s agreement to make a loan to a specific borrower on a specific property.
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first mortgage
A mortgage that is the primary lien against a property.
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fixed installment
The monthly payment due on a mortgage loan. The fixed installment includes payment of both principal and interest.
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fixed-rate mortgage (FRM)
A mortgage in which the interest rate does not change during the entire term of the loan.
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fixture
Personal property that becomes real property when attached in a permanent manner to real estate.
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flood insurance
Insurance that compensates for physical property damage resulting from flooding. It is required for properties located in federally designated flood areas.
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foreclosure
The legal process by which a borrower in default under a mortgage is deprived of his or her interest in the mortgaged property. This usually involves a forced sale of the property at public auction with the proceeds of the sale being applied to the mrotgage debt.
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forfeiture
The loss of money, property, rights, or privileges due to a breach of legal obligation.
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fully amortized ARM
An adjustable-rate mortgage (ARM) with a monthly payment that is sufficient to amortize the remaining balance, at the interest accrual rate, over the amortization term.
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