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Glossary of Mortgage and Home Equity Terms

To navigate through our glossary, click on the first letter of the word you’re looking for.
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Fair Credit Reporting Act (FCRA)
This law requires consumer reporting agencies to exercise fairness, confidentiality, and accuracy in preparing and disclosing credit information.
Federal Home Loan Mortgage Corporation – FHLMC (Freddie Mac)
A stockholder-owned corporation created by Congress that purchases conventional mortgages in the secondary mortgage market from insured depository institutions and HUD-approved mortgage bankers. It sells participation sales certificates secured by pools of conventional mortgage loans, their principal, and interest guaranteed by the federal government through the FHLMC. It also sells Government National Mortgage Association (GNMA, or “Ginnie Mae”) bonds to raise funds to finance the purchase of mortgages. Popularly known as “Freddie Mac”.
Federal Housing Administration (FHA)
The federal agency in the Department of Housing and Urban Development (HUD) that insures residential mortgages.
Federal National Mortgage Association – FNMA (Fannie Mae)
A taxpaying corporation created by Congress to support the secondary mortgage market. It purchases and sells residential mortgages insured by the Federal Housing Administration (FHA) or guaranteed by the Veterans Administration (VA) as well as conventional home mortgages.
Fee Simple
The greatest possible interest a person can have in real estate, including the right to dispose of the property or pass it on to one's heirs.
First Adjusted Payment
The estimated monthly payment due when the interest rate on an adjustable-rate mortgage is reset. After the initial fixed-rate period, the interest rate can increase or decrease annually according to the market index. Any change may significantly impact the monthly payment.
First Mortgage
A real estate loan that has priority over any subsequently recorded mortgages.
Fixed Interest Rate
An interest rate that does not change during the loan term.
Fixed-rate Advance (FRA)
A variable-rate home equity line of credit feature that allows the mortgagor to secure, or “fix”, the interest rate on all or a portion of their balance.
Fixed-rate Mortgage (FRM)
A mortgage in which the interest rate and monthly payments remain the same for the life of the loan.
Foreclosure
A legal procedure in which property mortgaged as security for a loan is sold to pay the defaulting borrower's debt.
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