GLOSSARY OF TERMS

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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 report.
 
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
A congressionally chartered, shareholder-owned company that is the nation's largest supplier of home mortgage funds.
 
Fannie Mae's Community Home Buyer's Program
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 sessions.
 
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.
 
fee simple
The greatest possible interest a person can have in real estate.
 
FHA mortgage
A mortgage that is insured by the Federal Housing Administration (FHA).  Also known as a government mortgage.
 
finder's fee
A fee or commission paid to a mortgage broker for finding a mortgage loan for a prospective borrower.
 
first mortgage
A mortgage that is the primary lien against a property.
 
fixed-rate mortgage (FRM)
A mortgage in which the interest rate does not change during the entire term of the loan.
 
flood insurance
Insurance that compensates for physical property damage resulting from flooding.  It is required for properties located in federally designated flood areas.
 
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 mortgage debt.
 
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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