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.
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.
Fannie Mae is a New York Stock Exchange company and the largest non-bank financial services company in the world. It
operates pursuant to a federal charter and is the nation's largest source of financing for home mortgages. Over the past
30 years, Fannie Mae has provided nearly $2.5 trillion of mortgage financing for over 30 million families.
Fannie Mae's Community Home Buyer's ProgramSM
An income-based community lending model, under which mortgage insurers and Fannie Mae offer flexible underwriting
guidelines to increase a low- or moderate-income family's buying power and to decrease the total amount of cash needed to
purchase a home. Borrowers who participate in this model are required to attend pre-purchase home-buyer education
A financing option for a fixed-rate mortgage that offers home buyers a 3 percent down payment loan with either a 25- or
30-year term. The mortgage features a loan-to-value (LTV) percentage of 97 percent, and is designed to expand
homeownership opportunities for people with modest incomes. Borrowers must take a pre-purchase home-buyer education
session to qualify for a Fannie 97 mortgage.
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.
The greatest possible interest a person can have in real estate.
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.
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.
A mortgage that is insured by the Federal Housing Administration (FHA). Also known as a government mortgage.
A fee or commission paid to a mortgage broker for finding a mortgage loan for a prospective borrower.
A lender’s agreement to make a loan to a specific borrower on a specific property.
A mortgage that is the primary lien against a property.
The monthly payment due on a mortgage loan. The fixed installment includes payment of both principal and interest.
fixed-rate mortgage (FRM)
A mortgage in which the interest rate does not change during the entire term of the loan.
Personal property that becomes real property when attached in a permanent manner to real estate.
Insurance that compensates for physical property damage resulting from flooding. It is required for properties located in
federally designated flood areas.
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.
The loss of money, property, rights, or privileges due to a breach of legal obligation.
An employer-sponsored investment plan that allows individuals to set aside tax-deferred income for retirement or
emergency purposes. 401(k) plans are provided by employers that are private corporations. 403(b) plans are provided by
employers that are not for profit organizations.
Some administrators of 401(k)/403(b) plans allow for loans against the monies you have accumulated in these plans --
monies must be repaid to avoid serious penalty charges.
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.