Mortgage Glossary
# A B C D E F G H I J K L M N O P Q R S T U V W X Y ZF
The par value of a security, as distinct from its market value.
Factor
A decimal value reflecting the proportion of the outstanding principal balance of a mortgage security, which changes over time, in relation to its original principal value. The Bond Buyer publishes the 'Monthly Factor Report,' which contains a list of factors for Ginnie Mae, Fannie Mae and Freddie Mac securities.
Fair Credit Reporting Act
A consumer protection law regulating consumer credit reports by consumer/credit reporting agencies; further establishes procedures for correcting credit rating errors.
Fair Housing Act
A U.S. law that prohibits discrimination in all facets of the home buying process on the basis of race, color, national origin, religion, sex, familial status, or disability.
Fair Market Value
The hypothetical price that a willing buyer and seller will agree upon, when they are acting freely, carefully, and with complete knowledge of the situation.
Fannie Mae (FNMA)
Federal National Mortgage Association; a federally chartered enterprise owned by private stockholders that purchases residential mortgages and converts them into securities for sale to investors; by purchasing mortgages, Fannie Mae supplies funds that lenders may loan to potential homebuyers.
Farmers Home Administration (FmHA)
Provides financing to American farmers who may not be able to secure loans from other places; see 'RHS.'
Federal Home Loan Bank Board (FHLBB)
The former name of the regulatory agency for federally chartered savings institutions; it is now called the Office of Thrift Supervision.
Federal Home Loan Mortgage Corporation (FHLMC)
Federal Home Loan Mortgage Corporation (FHLM); a federally chartered corporation that purchases residential mortgages, securitizes them, and sells them to investors; this provides lenders with funds for new homebuyers. Also known as Freddie Mac.
Federal Housing Administration (FHA)
Established in 1934 to advance homeownership opportunities for all Americans; assists homebuyers by providing mortgage insurance to lenders to cover most losses that may occur when a borrower defaults; this encourages lenders to make loans to borrowers who might not qualify for conventional mortgages.
Federal Housing Finance Administration (FNMA)
An independent federal agency established by the U.S. Congress in 1989 to regulate and supervise the 12 Federal Home Loan Banks.
Federal National Mortgage Association (FNMA)
A federally chartered enterprise owned by private stockholders that purchases residential mortgages and converts them into securities for sale to investors; by purchasing mortgages, FNMA supplies funds that lenders may loan to potential homebuyers. Also known as Fannie Mae.
Fee Simple
The greatest possible interest a person can have in real estate.
FHA (Federal Housing Administration)
Established in 1934 to advance homeownership opportunities for all Americans; assists homebuyers by providing mortgage insurance to lenders to cover most losses that may occur when a borrower defaults; this encourages lenders to make loans to borrowers who might not qualify for conventional mortgages.
FHA Mortgage
Mortgage loans insured by the U.S. Federal Housing Administration.
FHLBB (Federal Home Loan Bank Board)
The former name of the regulatory agency for federally chartered savings institutions; it is now the Office of Thrift Supervision.
FHLMC (Federal Home Loan Mortgage Corporation)
Federal Home Loan Mortgage Corporation (FHLMC); a federally chartered corporation that purchases residential mortgages, securitizes them, and sells them to investors; this provides lenders with funds for new homebuyers. Also known as Freddie Mac.
Finance Charge
The total amount that a loan will cost its borrower, including interest payments, origination fees, and other brokerage and lender charges; it does not include credit report, appraisal, and title search costs.
Finder's Fee
A fee or commission paid to a broker for obtaining a mortgage loan for a client or for referring a mortgage loan to a broker. It may also refer to a commission paid to a broker for locating a property.
Firm Commitment
A lender's agreement to make loans available to a specific borrower for a specific property.
First Mortgage
The mortgage that is first among any loans against a property. Often refers to the date of the recording of the loan.
Fixed-Rate Loan (Fixed-Rate Mortgage)
A mortgage with payments that remain the same throughout the life of the loan because the interest rate and other terms are fixed and do not change.
Fixed-Rate Mortgage (Fixed-Rate Loan)
A mortgage with payments that remain the same throughout the life of the loan because the interest rate and other terms are fixed and do not change.
Fixture
Personal property that becomes real property when permanently attached to real estate.
Float
The option for a borrower to choose a variable interest rate, instead of a locked rate; it is considered a significant risk, because it could result in a higher interest rate.
Flood Insurance
Insurance that protects homeowners against losses from a flood; if a home is located in a flood plain, the lender will require flood insurance before approving a loan.
Floor
Minimum rate of interest on an adjustable rate mortgage loan.
FmHA (Farmers Home Administration)
Provides financing to American farmers who may not be able to secure loans from other places. See 'RHS.'
FNMA (Federal National Mortgage Association)
Also known as Fannie Mae. A federally chartered enterprise owned by private stockholders that purchases residential mortgages and converts them into securities for sale to investors; by purchasing mortgages, FNMA supplies funds that lenders may loan to potential homebuyers.
Forebearance
Postponing some or all loan payments when a borrower is delinquent.
Foreclosure
A legal process in which mortgaged property is sold to pay the loan of the defaulting borrower.
Freddie Mac
Federal Home Loan Mortgage Corporation; a federally chartered corporation that purchases residential mortgages, securitizes them, and sells them to investors; this provides lenders with funds for new homebuyers.
Fully Amortizing Loan
A loan in which the principal and interest will be repaid fully through regular installments by the time the loan's term ends.
Future Advances Clause
A clause in a mortgage contract that allows a lender to advance additional funds without executing a new mortgage instrument.
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