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Mortgage Loan
Mortgage Terms:
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 (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.
Fannie Mae's Community Home Buyer's Program
An income-based community lending model, under which mortgage insurers
and Fannie Mae offer flexible underwriting guidelines to increase a low-
or moderate-income family's buying power and to decrease the total amount
of cash needed to purchase a home. Borrowers who participate in this model
are required to attend pre-purchase home-buyer education sessions.
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. top)
fee simple estate
An unconditional, unlimited estate of inheritance that represents the
greatest estate and most extensive interest in land that can be enjoyed.
It is of perpetual duration. When the real estate is in a condominium
project, the unit owner is the exclusive owner only of the air space within
his or her portion of the building (the unit) and is an owner in common
with respect to the land and other common portions of the property.
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.
firm commitment
A lender's agreement to make a loan to a specific borrower on a specific
property.
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.
fixed-rate mortgage
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.
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.
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