F

Fair Credit Reporting Act: A law that sets forth a specific procedure for correcting mistakes on a credit report.

Federal Home Loan Bank Board (FHLBB): Regulates and supervises federally chartered savings institutions.

Federal Home Loan Mortgage Corporation (FHLMC): “Freddie Mac,” purchases conventional loans providing a secondary market for mortgage financing. 

Federal Housing Administration (FHA): A division of the Department of Housing and Urban Development. Insures residential mortgage loans made by private lenders and sets mortgage underwriting standards. 

Federal National Mortgage Association (FNMA): “Fannie Mae,” buys conventional, VA, and FHA mortgages from primary lenders.  

Fee Simple Estate: Absolute ownership in real property with unrestricted power.

FHA Loan: A loan insured by the Federal Housing Administration available to all qualified home purchasers. FHA loans are limited to $124,875.

FHA Mortgage Insurance: Required for FHA loans. There is a small fee of up to 3.8 percent of the loan amount which can be paid at closing or amortized into the loan to insure the loan with FHA. Also, FHA mortgage insurance requires an annual fee of 0.5 percent of the current loan amount, paid in monthly installments. As the buyer lowers the down payment, the years the fee must be paid increases.

Finance Charge: Interest that is charged by a lender.

Firm Commitment: A promise from a lender to make a mortgage loan.

First Mortgage: A mortgage with top priority over any other mortgage. Incase of a default on the loan and foreclosure, the first mortgage will be paid first before other mortgages or liens.

Fixed Rate Mortgage: A loan in which the interest rate remains the same as well as the monthly payments. Some fixed rate loans are only fixed for a portion of the term of the loan.

Forbearance: Postponement of foreclosure to allow the borrower extra time to make late payments and catch up.

Foreclosure: When the lender or the seller forces a sale of a mortgaged property because the borrower either has stopped payment on the loan or not met the other terms of the mortgage.

Fully Indexed Rate: Value of the index + Margin.