Mortgage Terms 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 nation's 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 Mae's behalf.

Fannie Mae/Freddie Mac Loan Limit

The current 2004 Fannie Mae/Freddie Mac loan limit for a single-family home is $333,700 and is higher in Alaska, Guam, Hawaii, and the U.S. Virgin Islands. The Fannie Mae loan limit is $427,150 for a two-unit home; $516,300 for a three-unit home; and $641,650 for a four-unit home. Also referred to as the "conventional loan limit."

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).

FICO Score

A FICO score is a credit score developed by Fair Isaac & Co. Credit scoring is a method of determining the likelihood that credit users will pay their bills. A credit score attempts to condense a borrowers credit history into a single number. Fair, Isaac & Co. and the credit bureaus do not reveal how these scores are computed. The Federal Trade Commission has ruled this to be acceptable.

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.

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