Real Estate Glossary

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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 one's credit record. 

Fair Market Value: The price that a willing buyer and a willing seller would agree upon; The highest price that a buyer is willing to pay and the lowest price that a seller is willing to accept. 

Federal Housing Administration: A federal agency of the U.S. Department of Housing and Urban Development (HUD) that insures first mortgages, enabling private lenders to loan a very high percentage of the sale price.

Fee Simple: The great possible form of ownership of real property; absolute ownership. 

Fee Simple Estate: A property where the owner has undivided title to the land on which the property is situated.

FHA: The Federal Housing Administration which insures mortgage loans made by approved lenders, in accordance with FHA regulations; A federal agency of the U.S. Department of Housing and Urban Development (HUD) that insures first mortgages, enabling private lenders to loan a very high percentage of the sale price.

FHA Loan: A loan that is underwritten to the standards of the Federal Housing Administration, which grants approval of the loan and insures the lender against financial loss. 

FHA Mortgage: A mortgage that is insured by the Federal Housing Administration (FHA) which insures the lenders against financial loss.

Fiduciary: A person in a position of trust and confidence. Example: A real estate broker who becomes an agent of a seller or buyer is deemed to be a Fiduciary. Other examples of fiduciaries are trustees, executors, and guardians

Firm Commitment: A lender’s agreement to make a loan to a specific borrower on a specific property.

First Mortgage: The mortgage that is in first place among any loans recorded against a property. 

Fixed-Rate Mortgage: A mortgage in which the interest rate does not change during the entire term of the loan.

Fixtures: Personal property that becomes real property when attached in a permanent manner to real estate. Examples include: plumbing, electrical fixtures, fences, trees, shrubbery, etc. 

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 a mortgage and usually involves a forced sale of the property at public auction with the proceeds of the sale going to the lender.

Forfeiture: Loss of money or anything of value due to failure to perform, such as a deposit given to insure performance.

Fraud: A misstatement of a material fact made with intent to deceive or made with disregard of the truth.