Mortgage and Real Estate Terms – F

FAIR CREDIT REPORTING ACT (FCRA) – a Federal law, in part, giving one the right to see his or her credit report so that errors may be corrected. A lender loan banker/agent (credit grantor) refusing to advance credit based upon a credit report it receives from a credit repository, is compelled by law to reveal to the potential borrower, the name of the credit repository which issued the lender loan banker/agent with the credit report. You are allowed to see that report, dispute any errors contained in it, and have a copy of it – BUT, not from the lender loan banker/agent; your copy must be obtained from the credit repository directly.

FAIR MARKET VALUE – the price at which a property is transferred between a willing buyer and a willing seller, each of whom has a reasonable knowledge of all pertinent facts, and neither being under any compulsion to buy or sell. Generally, the likely selling price of your home, as appraised.

FANNIE MAE (FNMA) – The Federal National Mortgage Association (FNMA), the nation’s largest mortgage investor. Created in 1968 by an amendment to Title III of the National Housing Act (12 USA 1716 et seq.) to fund FHA type loans, this stockholder owner corporation, a portion of whose Board of Directors is appointed by the President of the United States, supports the secondary market in mortgages on residential property with mortgage purchase money and securitization programs for “conforming” residential real property loans (“conforming” started in the early 1970’s).

FEDERAL EMERGENCY MANAGEMENT AGENCY (FEMA) – Federal agency, which, among other things, directs the activities of the Federal Insurance Administration, and established flood insurance rates and terms of coverage, issues policies, processes claims, and identifies and maps flood-prone areas nationwide.

FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC) – a Great Depression agency originally established by the Federal Banking Act of 1933, to protect depositors from loss.

FEDERAL HOME LOAN MORTGAGE CORPORATION (FHLMC) – See Freddie Mac below.

FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA) – see Fannie Mae above.

FF&E – “Furniture, Fixtures & Equipment”, a phrase often used in commercial equipment leasing. A combination of items like “furniture” (in a dentist or lawyer’s office), “fixtures” (liquor store room – mounted shelves, security system) & “equipment” (bakery – baking equipment, restaurant – walk-in refrigerator/freezer) commonly utilize commercial small business equipment finance-lease structures.

FHA (FEDERAL HOUSING ADMINISTRATION) MORTGAGE – a loan insured by the Federal Housing Administration. FHA mortgages require lower down payments than conventional mortgages, and also feature less stringent income and financial requirements.

FIRST AND SECOND MORTGAGES – the documents that entitle a lender to the property that secures the loan if the borrower fails to meet his/her obligations per the loan arrangement. While your first mortgage enables you to buy your home in the first place, a second mortgage provides for refinancing and literally hundreds of different lifetime opportunities (see difference between “mortgage” and “trust deed”).

FIRST LIEN – primary claim by the lender for satisfaction of outstanding debt. Gives lender the right to raise this money by foreclosing property if you fail to make payments you’ve agreed to.

FIXED AND ADJUSTABLE RATES – the way the interest on your loan is determined. A fixed rate of interest stays the same over the life of the loan; an adjustable (or “variable”) rate changes, increasing or decreasing periodically according to an index which reflects general trends.

FIXED-RATE MORTGAGE – a home loan with a mortgage interest rate that remains constant for the life of the loan. The most common fixed-rate mortgages have typically been 30 year fixed rate mortgages and 15 year fixed rate mortgages.

FORBEARANCE – the act of refraining from taking legal action despite the fact that the mortgage is in arrears. It is usually granted only when a mortgagor makes satisfactory arrangements to pay the delinquent amount owed at a future date.

FREDDIE MAC (FHLMC) – The Federal Home Loan Mortgage Corporation (FHLMC), the second largest investor of residential real estate mortgage loans, created by Congress in Title III of the Emergency Home Finance Act of 1970 (12 USC 1451 et seq.), to provide an alternative source to Fannie Mae, for “conforming” residential real estate mortgage loans. This stockholder owned corporation, a portion of whose Board of Directors is appointed by the President of the United States, supports the secondary market in mortgages on residential property with mortgage purchase money and securitization programs for “conforming” residential real property loans.

FRONTAGE – the property line abutting the most important adjacent property, usually a street, lake, river or ocean.

FULL INCOME VERIFICATION – a requirement for fully documented proof of income; loans that contain this requirement can usually offer lower interest rates than formal no-income verification programs. Other types of income verification also exist including stated income mortgages and no doc mortgages .

FUNCTIONAL DEPRECIATION – in real estate, a loss of value due to advancements in technology or design that makes the features of the current facility obsolete. Also called functional obsolescence.