Mortgage Glossary

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 record.

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 New York Stock Exchange company and the largest non-bank financial services company in the world. It operates pursuant to a federal charter and is the nation's largest source of financing for home mortgages.

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.

Firm Commitment - A lender’s agreement to make a loan to a specific borrower on a specific property.

First Mortgage - A mortgage that is the primary lien against a property.

Fixed Installment - The monthly payment due on a mortgage loan. The fixed installment includes payment of both principal and interest.

Fixed-Rate Mortgage (FRM) -  A mortgage in which the interest rate does not change during the entire term of the loan.

Fixture - Personal property that becomes real property when attached in a permanent manner to real estate.

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.

Forfeiture - The loss of money, property, rights, or privileges due to a breach of legal obligation.