Fair Credit Reporting Act - A 1971 federal law which guarantees an individual the right to examine all information on file about him or her with a credit reporting agency participating within the established guidelines. Procedures for rectifying errors are also specified in this act.
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Fannie Mae - See Federal National Mortgage Association
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Farmers Home Administration (FmHA) - Provides financing to farmers and other qualified borrowers who are unable to obtain loans elsewhere.
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FDIC (Federal Deposit Insurance Corporation) - A federal agency organized to guarantee funds on deposit in banks. The FDIC also performs functions such as making loans or buying assets from member banks to help effect mergers or helping to prevent bank failures.
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Federal Home Loan Mortgage Corporation (FHLMC) - Is a quasi-governmental agency that purchases conventional home loans from insured depository institutions and HUD-approved mortgage bankers. Also called "Freddie Mac".
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Federal Housing Administration (FHA) - A division of the Department of Housing and Urban Development. Its main activity is the insuring of residential mortgage loans made by private lenders. FHA also sets standards for underwriting mortgages.
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Federal National Mortgage Association (FNMA) - A tax-paying corporation created by Congress that purchases and sells conventional residential mortgages as well as those insured by FHA or guaranteed by VA. Also called "FannieMae."
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Federal Reserve System (The Fed) - The central banking system that regulates the supply of money, it includes 12 regional "banker's banks", their branches and all national and state banks that choose to be members. The Board of Directors of the system regulates the prime interest rate, which affects interest rates in all banks.
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Fee simple - An estate in which the owner is entitled to the entire property, with unconditional power of disposition (sell) during the owner's life, and which descends to the heirs upon the owner's death if the owner dies without a will (intestate) or can be devised (given to another) by will (testate).
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FEMA - Federal Emergency Management Agency responsible for providing relief in national disasters. This agency designates flood areas and generates flood maps for use by hazard insurance agents and underwriters issuing flood insurance.
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FHA Loan - A loan insured by the Federal Housing Administration open to all qualified home purchasers. There are limits to the size of FHA loans.
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FHA Mortgage Insurance - FHA requires a fee (up to 2.25 percent of the loan amount) paid at closing to insure the loan. In addition, FHA mortgage insurance requires an annual fee of up to 0.5 percent of the current loan amount, paid in monthly installments. The lower the down payment, the more years the fee must be paid.
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Fiduciary - One who hold a position of trust and confidence requiring scrupulous good faith and candor. In connection with real estate transactions, fiduciary responsibility belongs to the closing agent disbursing funds and the designated holder of escrowed monies in a closing, i.e., repair or tax payment escrows.
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Fiscal Year - The time period encompassing 365 days which a company maintains financial records. This may or may not correspond with calendar year. In real estate transactions, this is more relevant for commercial closings.
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Fixed-Rate Mortgage - A loan that carries an unchangeable interest rate over its entire term - typically a period of 15-30 years.
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Fixtures - Personal property that is attached to real property and is legally treated as real property while it is so attached. Examples: fences, window blinds and chandeliers.
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Flood Hazard Area - A geographical area designated by the Department of Housing and Urban Development (HUD) as having an above average risk of flooding. Most lenders require a flood elevation certification from the surveyor.
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Foreclosure - 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 loan. Also known as a repossession of property.
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Forgery - The fraudulent signing of another's name to an instrument such as a deed, mortgage or check.
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Freddie Mac (FHLMC) - Federal Home Loan Mortgage Corporation. A federal agency that purchases both conventional and federally insured first mortgages from members of the Federal Reserve System and the Federal Home Loan Bank System.
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