Definitions (F)

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 HOUSING ACT
Title VIII of the Civil Rights Act of 1968 (Fair Housing Act), as amended, prohibits discrimination in the sale, rental, and financing of dwellings, and in other housing-related transactions, based on race, color, national origin, religion, sex, familial status (including children under the age of 18 living with parents or legal custodians, pregnant women, and people securing custody of children under the age of 18), and disability.

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 (FNMA)
The Federal National Mortgage Association, which is a congressionally chartered, shareholder-owned company that is the nation's largest supplier of home mortgage funds. For a discussion of the roles of Fannie Mae, Freddie Mac (FHLMC), and Ginnie Mae (GNMA), see the Library.

FEDERAL HOME LOAN MORTGAGE CORPORATION – FHLMC (FREDDIE MAC)
A stockholder-owned corporation created by Congress 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 (GNMA, or “Ginnie Mae”) bonds to raise funds to finance the purchase of mortgages. Popularly known as “Freddie Mac”.

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.

FEDERAL RESERVE THE FEDERAL RESERVE
the central bank of the U.S., founded by Congress in 1913 to provide a safer, more flexible, and more stable monetary and financial system. Federal Reserve's duties fall into four areas: (1) conducting the nation’s monetary policy; (2) supervising and regulating banking institutions and protecting the credit rights of consumers; (3) maintaining the stability of the financial system; and (4) providing certain
financial services to the U.S. government, the public, financial institutions and foreign official institutions.

FEDERAL SAVINGS & LOAN INSURANCE CORPORATION (FSLIC)
Originally established in 1934 by the National Housing Act to insure deposits in participant savings and loan associations, FSLIC was dissolved by FIRREA. Under FIRREA, the Savings Association Insurance Fund (SAIF) is the new thrift insurance fund, administered by the Federal Deposit Insurance Corporation (FDIC).

FEEDBACK
The real estate sales agent and/or his or her client’s reaction to a listing or property. Requested by the listing agent.

FEE SIMPLE
A form of property ownership where the owner has the right to use and dispose of property at will.

FHA
Federal Housing Administration.

FHA INSURANCE
An undertaking by FHA to insure the lender against loss arising from a default
by the borrower.

FHA MORTGAGE
A mortgage that is insured by the Federal Housing Administration (FHA). Along with VA loans, an FHA loan will often be referred to as a government loan.

FHA (FEDERAL HOUSING ADMINISTRATION) LOAN GUARANTEE
A guarantee by the FHA that a percentage of a loan will be underwritten by a mortgage company or banker.

FIRST ADJUSTED PAYMENT
The estimated monthly payment due when the interest rate on an adjustable-rate mortgage is reset. After the initial fixed-rate period, the interest rate can increase or decrease annually according to the market index. Any change may significantly impact the monthly payment.

FIRST LIEN
A first lien is any lien that meets both of the following requirements: The lien is acceptable to private institutional first‐mortgage investors in the area where the mortgaged premises are located, and, The lien grants to the lien holder a claim against the property that, under the law of the jurisdiction where the mortgaged premises are located, is prior to the rights of all others, subject only to prior liens and encumbrances expressly waived.

FIRST MORTGAGE
The mortgage that is in first place among any loans recorded against a property. Usually refers to the date in which loans are recorded, but there are exceptions.

FIRST‐TIME HOMEBUYERS
Per USDA guidelines for households where the applicant meets one of the following criteria: A. No ownership interest in a principal residence during the three‐year period ending on the date of loan closing; or B. A displaced homemaker or single parent who, except for owning with a spouse, had no ownership interest in a principal residence during the three year period ending on the date of loan closing. Displaced homemakers include any individual who is: (i) An adult; (ii) Unemployed or underemployed; (iii) Experiencing difficulty in obtaining or upgrading employment; and (iv) In recent years has worked primarily without remuneration to care for the home and family, but has not worked full‐time, full‐year in the labor force. C. An individual who is a single parent and who, except for owning a home with a spouse, has had no ownership interest in a principal residence during the three‐year period ending on the date of loan closing. Single parents include any individual who is: (i) Unmarried or legally separated; and (ii) Has custody or joint custody of one or more children, or is pregnant.

FIXED-RATE ADVANCE (FRA)
A variable-rate home equity line of credit feature that allows the mortgagor to secure, or “fix”, the interest rate on all or a portion of their balance.

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 has become part of the property through permanent attachment.

FLAT FEE
A predetermined amount of compensation received or paid for a specific service in a real estate transaction.

FLIPPING
The practice of buying property as an investment at a bargain price, making superficial repairs and re‐selling it quickly at an inflated price. Elements of fraudulent "flipping" are older, decaying property, cosmetic repairs, inflated sale price and eager, unsophisticated buyers.

FLOOD INSURANCE
Insurance that compensates for physical property damage resulting from flooding. It is required for properties located in federally designated flood areas.

FLOOR DUTY OR TIME
That a time, usually assigned, when a real estate sales agent answers telephones, e-mails, or walk-in requests for information on property.

FORBEARANCE
The act of refraining from taking legal action despite the fact that a mortgage is in arrears. It is usually granted only when a mortgagor makes a satisfactory arrangement by which the arrears will be paid at a later date.

FORCE‐PLACED INSURANCE
Required insurance coverage obtained by the lender on the borrower's behalf, which the borrower has allowed to lapse. The borrower is required to pay the premium. Also known as forced‐order or lender‐placed insurance.

FORCIBLE ENTRY AND DETAINER (FED)
A court action to obtain possession of premises by the person entitled to actual possession (also may be known as an eviction action).

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.

FORECLOSURE INITIATION
The date of the first legal action required by law to initiate foreclosure. Action varies by State.

FORECLOSURE SALE
A forced sale of mortgaged property at public auction conducted either by the court or in some other prescribed fashion, with the proceeds of the sale
going to satisfy the debt. The lender is usually the successful bidder at the foreclosure sale.

FORFEITURE
The process used by the seller or vendor under a land agreement to recover the property from the buyer or vendee in the event of default.

401(K)/403(B)
An employer-sponsored investment plan that allows individuals to set aside tax-deferred income for retirement or emergency purposes. 401(k) plans are provided by employers that are private corporations. 403(b) plans are provided by employers that are not for profit organizations.

401(K)/403(B) LOAN
Some administrators of 401(k)/403(b) plans allow for loans against the monies you have accumulated in these plans. Loans against 401K plans are an acceptable source of down payment for most types of loans.

FOR SALE BY OWNER (FSBO)
A property that is for sale by the owner of the property.
A deception deliberately practiced in order to secure unfair or unlawful gain.