Mortgage Glossary (F)
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Fair Credit Reporting Act: A consumer protection law that regulates the disclosure of consumer credit reports by credit reporting agencies and specifies procedures for challenging errors on a credit record.Fair Market Value: The price at which property would be transferred between a willing buyer and willing seller, each of whom has a reasonable knowledge of all pertinent facts and is not under any compulsion to buy or sell.
Fannie Mae: A New York stock exchange company. It is a public company that operates under a federal charter and is the nations largest source of financing for home mortgages. Fannie Mae does not lend money directly to consumers, but instead works to ensure that mortgage funds are available and affordable, by purchasing mortgage loans from institutions that lend directly to consumers.
Fannie Mae Seller/Servicer: A lender that Fannie Mae has approved to sell loans to it and to service loans on Fannie Maes behalf.
Federal Housing Administration (FHA): An agency within the U.S. Department of Housing and Urban Development (HUD) that insures mortgages and loans made by private lenders.
FHA Insured Loan: A loan that is insured by the Federal Housing Administration (FHA) of the U.S. Department of Housing and Urban Development (HUD).
First Mortgage: A mortgage that is the primary lien against a property.
First Time Home Buyer: A person with no ownership interest in a principal residence during the three-year period preceding the purchase of the security property.
Fixed Period Adjustable Rate Mortgage: An adjustable-rate mortgage (ARM) that offers a fixed rate for an initial period, typically three to ten years, and then adjusts every six months, annually, or at another specified period, for the remainder of the term.
Fixed Rate Mortgage (FRM): A mortgage loan in which the interest rate does not change during the entire term.
Flood Certification Fee: A fee charged by independent mapping firms to identify properties located in areas designated as flood zones.
Flood Insurance: Insurance that compensates for physical property damage resulting from flooding. It is required for properties located in federally designated flood hazard zones.
Foreclosure: The legal process by which a property that is mortgaged as security for a loan may be sold and the proceeds of the sale applied to the mortgage debt. A foreclosure occurs when the loan becomes delinquent because payments have not been made or when the borrower is in default for a reason other than the failure to make timely mortgage payments.
Forfeiture: The loss of money, property, rights, or privileges due to a breach of a legal obligation.
Fully Amortized Mortgage: A mortgage in which the monthly payments are designed to retire the obligation at the end of the mortgage term.
Federal Discount Rate: Is the interest rate charged to member banks borrowing from the federal reserve bank