Real Estate Glossary

F.S.:

Abbreviation for Florida Statutes. Most state statues have requirements for proper legal reference in abbreviations. These are referred to as statutory citations.



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 a credit record. Referenced as FCRA.



Fair market value:

The value of real property based on the prospective sale price the property would yield if sold in an arms length transaction under current market conditions.



Fannie Mae:

A congressionally chartered, shareholder-owned company that supports the secondary market in mortgages on residential property with mortgage purchase and securitization programs. Referenced as FNMA.



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 itself lend money or plan or construct housing.



Fee simple:

Ownership of real property that is unrestricted subject to eminent domain, police powers or other restrictions for public benefit.



Fee simple estate:

An unconditional, unlimited estate of inheritance that represents the greatest estate and most extensive interest in land that can be obtained. 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 coinsured mortgage:

A mortgage (under FHA Section 244) for which the Federal Housing Administration (FHA) and the originating lender both share the risk of loss in the event of the mortgagor's default.



FHA mortgage:

A mortgage that is insured by the Federal Housing Administration (FHA). Also known as a government mortgage.



Finder's fee:

A fee or commission paid to a mortgage or other broker for finding a mortgage loan or property for a prospective borrower.



First mortgage:

A mortgage that is the first priority lien against a property.



Fixed installment:

The monthly payment due on a mortgage loan. The fixed installment includes payment of both principal and interest and may include a tax escrow.



Fixed-rate mortgage (FRM):

A mortgage loan in which the payments and interest rate do not change during the life of the loan.



Fixture:

Ordinarily personal property that becomes real property when attached in a permanent manner to real estate.



Float:

The time between loan application and closing when the interest rate for the loan is not locked. It can change based on changes in the financial markets.



Flood insurance:

Insurance that reimburses the policyholder for physical property damage or loss resulting from flooding. It is required for properties located in federally designated flood areas.



Foreclosure:

The legal process through which a borrower in default under a mortgage or deed of trust loses the possessory 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.



Foreclosure by advertisement:

Alternate reference to a foreclosure under a deed of trust that occurs through power of sale. Procedurally, such foreclosures require public advertisement notice before sale, hence the reference to advertisement.



Foreclosure by entry or action:

Alternative reference to a judicial foreclosure in which legal action must be filed to effectuate a foreclosure sale.



Foreclosure by sale:

Alternate reference to a foreclosure under a deed of trust that occurs through power of sale. Procedurally, such foreclosures require public advertisement notice before the foreclosure sale.



Foreclosure complaint:

A legal document filed as part of a foreclosure action in a lien theory state setting forth the allegations and events of default by the borrower.



Foreclosure Unit:

Reference to special court units designed to expedite foreclosure proceedings. New Jersey, for example, operates a foreclosure unit in its Superior Court system.



Forfeiture:

The loss or surrender of money, property, rights or privileges due to a breach of legal obligation such as an installment contract.



Freddie Mac:

A congressionally chartered, shareholder-owned company that supports the secondary market in mortgages on residential and multifamily property with mortgage purchase and securitization programs. Referenced also as FHLMC.



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 rather than as part of a balloon payment.


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