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

FIRREA (Financial Institutions Reform, Recovery and Enforcement Act of 1989): The law enacted to restructure the thrift industry. The Act created regulatory entities to oversee thrifts and established risk-based capital guidelines for Qualified Thrift Lenders (QTLs.) The Act created the Office of Thrift Supervision (OTS), the Federal Housing Finance Board (FHLBB), and the Resolution Trust Corporation (RBC). The Act dissolved the Federal Home Loan Bank Board (FHLBB) and the Federal Savings and Loan Insurance Corporation (FSLIC).

FSLIC: Federal Savings and Loan Insurance Corporation. Originally established in 1934 by the National Housing Act to insure deposits in participant savings and loan associations, the FSLIC was dissolved by the Financial Institutions Reform. Recovery Insurance Fund (SAIF) is the new thrift insurance fund, administered by the Federal Deposit Insurance Corporation (FDIC).

Fair Credit and Charge Card Disclosure Act: Federal Laws as amendments to the Truth In Lending Act that require that the consumer be provided with disclosures as to the credit card plan being offered to them. These offerings may be via internet, mail, or telephone solicitation.

Fair Credit Billing Act: A Federal Law which is part of the Truth In Lending Act that gives the consumer the right to dispute credit card charges under certain conditions. Those conditions are described in the credit card agreement and are described in the credit card billing statement.

Fair Credit Reporting Act (FCRA): A Federal law which requires a lender who is rejecting a loan request because of adverse credit information to inform the borrower of the source of such information. This law also contains provisions for consumers to seek corrections to errors reported in their personal credit files.

Fair Debt Collection Practices Act: A Federal Law that regulates the activities of those who collect debts from others on a regular basis. (collection agencies) Creditors who collect their own debts are not subject to the rules contained in this law.

Fair Housing Law: Title VII of the Civil Rights Act which prohibits discrimination on the basis of race, religion, national origin, sex, familial status, or handicap in residential housing.

Fair Market Value: The price at which property is transferred between a willing buyer and a willing seller, each of whom has a reasonable knowledge of all pertinent facts and neither is under any compulsion to buy or sell.

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

Farmers Home Administration (FMHA): A government agency within the Department of Agriculture that operates under the Consolidated Farm and Rural Development Act of 1921 and Title V of the Housing Act of 1949. This agency provides financing to farmers and other qualified borrowers who are unable to obtain loans elsewhere.

Feasibility Study: An analysis that determine whether a real estate project, proposed or existing, successfully meets desired objectives.

Federal Fair Housing Law: Title VII of the Civil Rights Act, which prohibits discrimination in the sale or rental of residential property because of race, color, sex, religion, or national origin.

Federal Home Loan Bank Board (FHLBB): The FHLBB was a regulatory and supervisory agency for Federally chartered savings institutions, and was abolished by the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA). It oversaw the operations of the Federal Savings and Loan Insurance Corporation and the Federal Home Loan Mortgage Corporation.

Federal Home Loan Mortgage Corporation (FHLMC): See Freddie Mac.

Federal HousingAdministration:(FHA): A Federal agency within the Department of Housing and Urban Development (HUD) that provides mortgage insurance for residential mortgages and underwriting for those mortgages. It also sets standards for construction of real estate.The FHA does not lend money, nor does it plan or construct housing.

Federal National MortgageAssociation (FNMA): See Fannie Mae.

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 one’s heirs.

Fees: The money you pay the financial institution for a service. Maintenance fees, bounced check fees, Internet banking fees are just a sample of various fees charged by banks, credit card issuers and the like.

FICO Score: Credit scores are commonly called FICO scores as the company that developed the means to the score is Fair, Isaac Company. Fair, Isaac Company developed a model or formula to determine behavior based on specific criteria that is used today by the three main credit repositories.

Finance Charge: Interest and other fees associated with borrowing. In residential real estate loans most finance charges are included in the Annual Percentage Rate.

Financing Package: The financing arrangements used to fund a project; including mortgages, partnerships, joint venture capital interest, stock ownership, or any financial arrangement.

Financial Plan: A written plan to determine how a person or business will be able to reach their goals and objectives.

Financial Statements: Profit and loss statements from which the lender should be able to determine a corporation’s profitability, effectiveness of management, and prospects for future corporate growth.

Financing Statement: A document prescribed by the Uniform Commercial Code and filed by a lender with the register of deeds or Secretary of State. It gives the name and address of the debtor and the secured party, along with a description of the personal property securing the loan.

Firm Commitment: A lender’s agreement to make a loan to a specific borrower on a specified property. It could also be an FHA or PMI agreement to insure a loan on a specific property with a designated borrower.

First Mortgage: A real estate loan that creates a primary lien against real property. It has priority over all other mortgages or trust deeds.

Fixed Expenses: Costs or payment that generally do not vary from month to month (for example, a mortgage payment.)

Fixed Interest Rate: An interest rate which does not change during the loan term.

Fixed Rate Mortgage: A home loan with an interest rate that does not change over the life of the loan. Because the interest rate never changes, the monthly principal and interest payment never change either.

Float: In mortgage servicing, the period of time between the receipt of borrower’s fund and remittance of those funds to investors.

Flood Insurance: Insurance against loss by flood damage. This is required by lenders in areas designated as potential flood areas.

Flood plain: An area that has been designated to have the potential of flooding due to the topography, nearness to rivers or other waterways or water drainage areas.

Forbearance: The act of refraining from taken 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 amount owed at a future date.

Foreclosure: A legal procedure in which a mortgaged property is sold to pay the outstanding debt in the case of default.

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.

Freddie Mac: Another name for the Federal Home Loan Mortgage Corporation (FHLMC), a quasi-governmental secondary market organization that offers various mortgage purchased and securitization programs. It is a buyer of pooled mortgages written under the guidelines issued by Freddie Mac to mortgage companies.

Front End Ratio: The proportion of a Buyer’s income that lenders will allow for principal, interest, taxes, and insurance when evaluating loan applications. A typical front end ratio is 33% of the gross income of the Borrower.

Fully Indexed Rate: Withregard to ARM loans in real estate, this is the current Index value plus the Margin named in the Note or contract on the loan. SEE Adjustable Rate Mortgage for a full explanation.