Debt Consolidation Glossary of Terms

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Glossary - F

Fair Credit Reporting Act
A federal law that governs what credit bureaus can report and for how long. It outlines procedures for correcting errors in credit reports. It requires credit bureaus to furnish copies of consumers' credit reports at their request.

fair market value
A fair price for a home based on recent sales of properties of similar size and quality in the neighborhood.

Fannie Mae
The largest mortgage investor, a government-sponsored enterprise that buys mortgages from lenders, bundles them into investments and sells them on the secondary mortgage market. Formerly known as the Federal National Mortgage Association.

Federal Housing Administration (FHA)
An agency within the federal Department of Housing and Urban Development that provides mortgage insurance and sets construction and underwriting standards.

fee simple
Outright ownership of real estate, free of any liens or other claims against title.

FHA mortgage
A mortgage insured by the Federal Housing Administration (FHA).

finder's fee
A sum paid for producing a buyer or seller.

first mortgage
The primary home loan on a property, which has priority over all other claims to the title.

fixed-rate mortgage (FRM)
A home loan in which the interest rate will remain the same through the life of the loan.

flood insurance
Insurance that compensates for physical property damage resulting from rising water. It is required for properties located in federally designated flood areas.

foreclosure
The legal process by which a homeowner in default on a mortgage is deprived of interest in the 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.

fully amortized ARM
A home loan whose interest rate can change, and whose amount is fully paid at the end of the term.