The Internet Real Estate Glossary

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To look up the real estate term you want, just click on the letter that the term begins with.

Facade - the outside front wall of a building.

Face Value - the dollar amount, shown by words and/or numbers on a document.

Fair Credit Reporting Act (FCRA) - Regulates the activities of Consumer Reporting Agencies (CRAs), users of credit reports and providers of information to those agencies. Mortgage companies and servicers report mortgage delinquencies, defaults and foreclosures, but must follow strict guidelines.

Fair Debt Collection Practices Act - A federal act that regulates communications between a consumer debtor and a collector.

Fair market value - The amount at which property would change hands between a willing buyer and a willing seller.

Fair market value (FMV) - The highest price a property will bring if - • The buyer and seller are aware of market conditions.

Fannie Mae (FNMA) - (See below.)

Farmers Home Administration (FmHA) - A division of the Department of Agriculture engaged in making direct mortgage loans to farmers and also home mortgage insurance and guarantee programs in rural areas and small towns.

FDIC - See Federal Deposit Insurance Corporation.

Federal Deposit Insurance Corporation - The corporation set up by the federal government to insure deposits in banks and S&Ls.

Federal Fair Housing Act of 1968 - An act prohibiting discrimination in the sale or rental of housing on the basis of race, color, religion or national origin sex, handicap and familial status.

Federal Home Loan Bank Board (FHLBB) - The former name for the regulatory and supervisory agency for federally chartered savings institutions. Agency is now called the Office of Thrift Supervision.

Federal Home Loan Mortgage Corporation (FHMC – “Freddie Mac”) - A federal agency which purchases first mortgages (both Conventional and federally insured) from members of the Federal Reserve System, and the Federal Home Loan Bank System. Commonly called “Freddie Mac.”

Federal Housing Administration (FHA) - An agency within the U.S. Department of Housing and Urban Development (HUD) established by Congress in 1934,that administers loan programs and insures mortgage loans made by FHA-approved lenders on homes that meet FHA standards to make more housing available

Federal National Mortgage Association (FNMA – “Fannie Mae”) - a privately owned corporation created by Congress in 1938 to provide a secondary mortgage market for purchase and sale of mortgages guaranteed by Veterans Administration and those insured under Federal Housing Administration and provide guidelines for most lenders to use to qualify borrowers. The short name for this association is “Fannie Mae.” Federal National Mortgage Association . . . the largest secondary-market investor in residential mortgages in the United States. Provides a constant and orderly market for banks to go to when they need to sell mortgages in order to keep their loan portfolios in balance with government-mandated liquidity ratios.

Federal Reserve System (FRS) - A federal agency which oversees and regulates monetary policy, which in turn affects interest rates and the availability of credit. All federally chartered commercial banks must be members.

Federal Savings and Loan Insurance Corporation - A corporation formerly run by the federal government that insured deposits in S&Ls; FDIC took over this function. FSLIC deposit insurance funds, what were left of them, were transferred to an FDIC fund called Savings Association Insurance Fund, SAIF for short.

Federal tax lien - A lien attached to property for nonpayment of a federal tax.

Fee Agreement - An agreement between a borrower and a broker which normally specifies the relationship between them and the amount of compensation to the broker.

Fee Simple Absolute - absolute ownership of real property.

Fee simple (also fee absolute or fee simple absolute) - Ownership of real property. The owner is entitled to the entire property with unconditional power of disposition during the owner’s life. Upon his death, the property descends to the owner’s designated heirs. Most homes are offered for sale as a fee-simple properties.

Fee Simple Determinable - An estate which has been created to exist only until the occurrence or nonoccurrence of a particular event. Returns automatically.

Fee Simple Subject to a Condition Subsequent - An estate which is subject to a power in the original grantor, or the grantor's heirs, to terminate the estate upon the happening of an event. Back to court.

FEMA - Federal Emergency Management Agency.

FHA case number - The number used to identify a HUD/FHA mortgage in HUD’s records.

FHA Guidelines - Rules that specify income and credit requirements for a borrower, and the condition and value of a property to allow an insured loan of a particular size.

FHA-insured mortgage - The Federal Housing Administration makes insured mortgages available through banks and other lenders that have low down-payment requirements.

FHA loan - A loan insured by the Federal Housing Administration open to all qualified home purchasers. While there are limits to the size of FHA loans (see your loan officer), they are generous enough to handle moderately-priced homes almost anywhere in the country.

FHA mortgage insurance premium (MIP) - The insurance paid on a FHA insured mortgage. It does not insure the property, but it does insure the lender against loss. Do not confuse this insurance with PMI (private mortgage insurance), used for conventional financing. (See “mortgage insurance premium.”)

Fictitious Deed of Trust - A recorded, comprehensive deed of trust containing all of the general terms and provisions (boilerplate sections) of a standard deed of trust. It is used, by reference, in the "short form" deeds of trust in order to cut down the length, and hence the cost, of recording repetitious, multi-page documents.

Fictitious Name - A name adopted for business purposes that is other than the true name of the business owner.

Fiduciary - A person in a position of trust or responsibility with specific duties to act in the best interest of a client. A real estate agent has a fiduciary responsibility to his clients.

Fiduciary Responsibility - An obligation to act in the best interest of another party. This type of obligation typically exists when one person places special trust and confidence in another person and that responsibility is accepted.

Finance charge - Interest payment due to a lender.

Financial hardship (“hardship condition”) - A borrower’s inability to make monthly payment in accordance with the terms of the mortgage note due to an involuntary reduction in income or unavoidable increase in expenses. Many agencies and investors require proof of the existence of financial hardship as a precursory to the extension of relief measures.

Financial statement - Statement of assets and liabilities with the difference of the two equalling the net worth.  The document prescribed by the Uniform Commercial Code (UCC) which provides notice that a security agreement encumbering personal property exists between parties. It is recorded locally or filed with the Secretary of State (depending upon the type of collateral). The procedure does not apply to real estate mortgages. A financing statement is often recorded by a lender.

Finder’s fee - A fee paid to an individual not requiring a license, for information useful to another party (i.e. broker or lender).

First Deed of Trust - A lien on real property which is superior to any other lien (except property taxes/assessments) of record.

First Lien - Debt recorded first against a property.

First Meeting of Creditors (Section 341 Creditors’ Meeting) - A meeting of creditors conducted by the U.S. Trustee or his designee under Section 341 of the Bankruptcy Code at which creditors, their attorneys, committees, and other parties have an opportunity to examine the bankruptcy debtor or representatives of the debtor under oath concerning the acts, conduct, and property of the debtor.

First mortgage - A mortgage that has priority as a lien over all other mortgages. In the case of a foreclosure, the first mortgage will be satisfied before other mortgages. (See also “second mortgage.”)

Fixed Payment Mortage - a loan secured by real property which features a periodic payment of interest and principal which is constant over the term of the loan.

Fixed rate mortgage - A loan whose interest rate does not change during the life of the loan. This is the opposite of an adjustable rate mortgage.

Fixture - Improvements or personal property attached to the land or home so as to become a part of the real estate. Fixtures are transferred to the buyer upon sale of the property. Light fixtures and built-in shelving usually are considered fixtures, but appliances are not. To determine whether an item is a fixture, consider - How is it attached to the property? Is the fixture essential to the building.

Flipping - Buying and then reselling property within a very short holding period.

Floating rate mortgage - A mortgage that has an interest rated that will change with the lender’s prime rate.

the property? What was the intent? (Was it intended to be part of the property?)

Flood insurance - An insurance policy that covers property damage caused by natural flooding. Flood insurance may be required on properties in a flood zone.

Floodplain - A level land area subject to periodic flooding from a contiguous body of water.

Forbearance - a course of action a lender may pursue to delay foreclosure or legal action against a delinquent borrower.  If you lose your job or are otherwise unable to make your monthly payments, your lender may agree to reduce or suspend your payments for an agreed-upon period. Once your monthly payments kick back in, you will be required to pay off the past-due amount, in pieces or in one lump sum.

Forced Sail - When one sells or loses his property without actually wanting to dispose of it.

Foreclosure (or repossession) - A legal process by which the lender forces sale of a property because the borrower has defaulted and not met the terms of the mortgage. Foreclosure laws vary from state-to-state.

Foreclosure Consultant (rescuer) - Foreclosure consultant means any person who makes any solicitation, representation, or offer to any owner to perform for compensation or who, for compensation, performs any service which the person in any manner represents will in any manner do any of the following:

(1) Stop or postpone the foreclosure sale.

(2) Obtain any forbearance from any beneficiary or mortgagee.

(3) Assist the owner to exercise the right of reinstatement.

(4) Obtain any extension of the period within which the owner may reinstate his or her obligation.

(5) Obtain any waiver of an acceleration clause contained in any promissory note or contract secured by a deed of trust or mortgage on a residence in foreclosure or contained in any such deed of trust or mortgage.

(6) Assist the owner to obtain a loan or advance of funds.

(7) Avoid or ameliorate the impairment of the owner's credit resulting from the recording of a notice of default or the conduct of a foreclosure sale.

(8) Save the owner's residence from foreclosure.

Foreclosure Fraud – Scams targeting financially distressed homeowners.  They revolve around heavily-promoted deals supposedly designed to save the homes of people facing foreclosure, those who've fallen behind on their mortgage payments.  Dishonest, foreclosure rescuers offer to “help” a homeowner, but instead either drains off the property’s built-up equity or leaves the “rescuer” owning the house outright – and the family evicted from their home. 

Foreclosure Sale - A court action allowing the sale of real property at a public auction on a specific date and time.  Also called a Sheriff’s Sale.

Fourplex - Four separate living units within the same building.

Freddie Mac (FHMC) - Federal Home Mortgage Corp. A federal agency that purchases mortgages, both conventional and federally insured, from members of the Federal Reserve System and the Federal Home Loan Bank Board.

Fraud - A misrepresentation of a material fact, which is made with knowledge of its falsity, and with intent to deceive a parry who in fact relies on the misrepresentation to his or her detriment and injury.

Fraudulent Transfer - A transfer of an asset for less than its fair market value. If the transfer can be proven to be fraudulent or merely for the purposes of damaging a creditor, it may be voided.

Freehold Estate - One which continues for an indefinite period of time. For as "least a lifetime or greater" (will)

Free and clear - A property that has no liens.

Freddie Mac (FHMLC) - Federal Home Loan Mortgage Corporation, a federally chartered corporation that purchases mortgages and packages them to sell as securities.

FSBO - For Sale By Owner; abbreviation used to indicate that a property is for sale by owner.

Free and Clear - Ownership of property free of all indebtedness. When an owner's equity is equal to the fair market value of her property.

Freeze Order - See Automatic Stay.

Friendly Foreclosure - A foreclosure that is actually instigated by the trustor for some ulterior reason - generally to clear up clouded title, etc.

FSA - A designation for Federal Savings Association.

Full Assumption - An arrangement in which a buyer takes title to the house and takes over the payments on the seller¹s old loan with the full permission of the lender, which evaluates the buyer¹s ability to show adequate income and creditworthiness by the lender¹s traditional standards. The process of obtaining lender approval is called qualifying.

Fully Amortized Adjustable-Rate Mortgage - A mortgage that amortizes, or pays down, the balance of a loan.

Full disclosure - Revealing all known facts that may affect the decision of a buyer or tenant.

Fully indexed rate - The fully indexed rate is the value of the index plus the margin. (See “adjustable-rate mortgage.”)

Functional Obsolescence - A loss in value due to conditions within the structure which make the building outdated when compared with a new building. (4 bedrooms and 1 bath, insulation, narrow stairway, etc.)

Future Advances - Additional moneys lent that are secured by an already existing promissory note and trust deed.

This real estate glossary is courtesy of the Internet Real Estate Center - Join the Online Real Estate Revolution.