Glossary - F

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Fair credit reporting act: A consumer protection agency 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.

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.

Fee simple: The greatest possible interest a person can have in real estate.

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), also known as a government mortgage.

Fiduciary: A relationship which implies a position of trust or confidence wherein one person is usually entrusted to hold or manage property or money for another.

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 agreement to make a loan to specific borrower on a specific properly.

First mortgage: A mortgage that is the primary lien against a properly.

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

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 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 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.

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

Forgery: The illegal act of counterfeiting documents or making a false signature, alteration, or falsification.

Fraud: Any form of deceit, trickery, breach of confidence, or misrepresentation by which one party attempts to gain some unfair or dishonest advantage over another.