Fair Credit Reporting Act
A consumer protection law that regulates the disclosure and use of consumer credit information, establishes rules for credit reporting to consumer credit reporting agencies, and establishes procedures for a consumer to view his or her credit report and correct mistakes on it.

Fair Market Value
The price that a buyer, willing but not compelled to buy, and a seller, willing but not compelled to sell, would agree on.

Fannie Mae (FNMA)
Another name for the Federal National Mortgage Association, the nation's largest mortgage investor. A quasi-governmental secondary market organization that offers various mortgage purchase and scrutinized programs.

Fee Simple
The greatest possible interest a person can have in real estate, including the right to dispose of the property or pass it on to heirs without limitation.

FHA Mortgage
A mortgage on which the lender is insured against loss by the Federal Housing Administration, with the borrower paying the mortgage insurance premium.

Finance Charge
The cost for using credit, comprised of interest costs and other fees.

Finance Company
A business that makes consumer loans. The interest rates charged by a finance company may be higher than those charged by other creditors, and credit criteria may be more relaxed, allowing those with problem credit to qualify.

Finder's fee
A fee or commission paid to a mortgage broker for finding a mortgage loan for a prospective borrower.

Firm Commitment
A lender's conditions, agreement or promise to make a loan to a specific borrower on a specific property.

First Mortgage
The first-priority claim against real property in the event the borrower defaults on the loan.

Fixed Installment
The monthly payment due on a mortgage loan. The fixed installment includes payment of both principal and interest.

Fixed Interest Rate
A mortgage feature that structures the loan so that there will be no increases or decreases in the interest rate during the life of the loan.

Fixed Monthly Rate
A feature in a loan that prevents increases or decreases in the monthly payment amount during the life of the loan.

Fixed Rate Mortgage
A mortgage on which the interest rate is specified in the loan contract, and remains unchanged throughout the term of the mortgage loan.

Fixture
Personal property that becomes real property when attached in a permanent manner to real estate (such as a lighting fixture or an in-ground spa).

Float
In a mortgage transaction, the option which the borrower may exercise to allow the rate and points to vary with changes in market conditions, rather than to "lock in" those prevailing at that time.

Forbearance
Voluntarily refraining from doing something, such as asserting a legal right. For example, a creditor may forbear on its right to collect a debt by temporarily postponing or reducing the borrower’s payments.

Forbearance Agreement
A verbal or written agreement that the lending institution will delay exercising its right to foreclose on a loan as long as the borrower performs certain agreed-upon terms and conditions.

Foreclosure
The legal process where the mortgage lender sells real property in the event of a default. Proceeds are applied to the mortgage debt, and the owner’s right of ownership is terminated.

Forfeiture
The loss of money, property, rights, or privileges due to a breach of legal obligation.

Freddie Mac
A secondary market organization that offers various mortgage purchase and securitizing programs.

Free and Clear
A property that has no liens.

Full Recasting
Setting the P&I payments to the level that will fully amortize the loan's outstanding balance over the remaining term using the fully indexed accrual rate at the recasting point.

Fully amortized ARM
An adjustable-rate mortgage (ARM) with a monthly payment that is sufficient to amortize the remaining balance, at the interest accrual rate, over the amortization term.

Fully Indexed Accrual Rate
The base index value of an adjustable-rate mortgage (ARM) plus the highest gross margin during the life of the loan.