This glossary is Alphabetical please choose your letter below.




Loan applications that are withdrawn by borrowers, sometimes because they have found a better deal.
Fair Credit Reporting Act


This law requires consumer reporting agencies to exercise fairness, confidentiality and accuracy in preparing and disclosing credit information.


Fair Housing Act
A 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 ( 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, Fannie Mae supplies funds that lenders may loan to potential homebuyers.


Federal Home Loan Mortgage Corporation - FHLMC ( Freddie Mac )
A quasi-governmental agency that purchases conventional mortgages in the secondary mortgage market from insured depository institutions and HUD-approved mortgage bankers. It sells participation sales certificates secured by pools of conventional mortgage loans, their principal, and interest guaranteed by the federal government through the FHLMC. It also sells Government National Mortgage Association bonds to raise funds to finance the purchase of mortgages. Popularly know as Freddie Mac.


Federal Open Market Committee ( FOMC )
Sets the Fed's monetary policy, which is carried out through the trading desk of the Federal Reserve Bank of New York.


Federal Reserve ( FED )
The central bank of the United States. Established by an act of Congress in 1912. The Federal Reserve's most critical role is to keep the economy healthy through the proper application of monetary policy. The objective of monetary policy is to influence the country's economic performance to promote stable prices, maximum sustainable employment, and steady economic growth.


The sum of all upfront cash payments required by the lender as part of the charge for the loan.


Fee Simple
The greatest possible interest a person can have in real estate, including the right to dispose of the property or pass it on to one's heirs. A property owned fee simple is know as being owned "free and clear".


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
A mortgage on which the lender is insured against loss by the Federal Housing Administration, with the borrower paying the mortgage insurance premium. The required down payment for an FHA mortgage is very low but the maximum loan amount is also low.


FHLMC ( Freddie Mac )
The Federal Home Loan Mortgage Corporation provides a secondary market for saving and loans by purchasing their conventional loans. Also known as "Freddie Mac."


FICO Score
A term used to describe the most widely used credit score by "Fair Issac Co." who developed the determination method.


Financing Points
The inclusion of points in the loan amount.


First Mortgage
A mortgage that has a first-priority claim against the property in case the borrower defaults on the loan. As an example, a borrower defaults on a loan secured by a property worth $100,000 net of sale costs. The property has a first mortgage with a balance of $95,000 and a second mortgage with a balance of $15,000. The first mortgage lender can collect $95,000 plus any unpaid interest and foreclosure costs. The second mortgage lender can collect only what is left of the $100,000.


Fixed Rate Mortgage ( FRM )
The mortgage interest rate will remain the same on these mortgages throughout the term of the mortgage for the original borrower.


Flexible Payment ARM
An adjustable rate mortgage that allows but does not require borrowers to make very low initial mortgage payments. Initially low, the payments rise over time. The major drawback is that borrowers selecting the minimum payment option may suffer "payment shock" ? a sudden and sharp increase in the payment for which they are unprepared.


Allowing the rate and points to vary with changes in market conditions. The borrower may elect to lock the rate and points at any time but must do so a few days before the closing.


Float Down
A rate lock, plus an option to reduce the rate if market interest rates decline during the lock period.


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.


FNMA ( Fannie Mae )
The Federal National Mortgage Association is a secondary mortgage institution which is the largest single holder of home mortgages in the United States. FHMA buys VA, FHA and conventional mortgages from primary lenders. Also known as "Fannie Mae."


The lender's postponement of legal action when a borrower is delinquent. It is usually granted when a borrower makes satisfactory arrangements to bring the overdue mortgage payments up to date. Also termed forbearance agreement.


A legal process by which the lender or the seller forces a sale of a mortgaged property because the borrower has not met the terms of the mortgage. Also known as a repossession of property.


Federal Home Loan Bank Board (FHLBB)
A regulatory and supervisory agency for federally chartered savings institutions.


Federal Home Loan Mortgage Corporation (FHLMC)
Also referred to as "Freddie Mac". The FHLMC is a quasi-government agency that purchases conventional mortgages from insured depository institutions and HUD approved mortgage bankers.


Federal National Mortgage Association (FNMA)
Also know as "Fannie Mae" a taxpaying corporation created by Congress that purchases and sells conventional residential mortgages as well as those insured by FHA or guaranteed by VA. This institution, which provides funds for one in seven mortgages, makes mortgage money more available and more affordable.


Freddie Mac
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.


Fully Amortizing Payment
The monthly mortgage payment which, if maintained unchanged through the remaining life of the loan at the then-existing interest rate, will pay off the loan over the remaining life.


Fully Executed Contract
A real estate contract for sale and purchase bearing signatures of all parties to the transaction.


Fully Indexed Interest Rate
The current index value plus the margin on an ARM.