Fair Credit Reporting Act - A federal law giving one the right to see his or her credit report so that errors may be corrected. A lender refusing credit based on a credit report must inform the buyer which company issued the report. The buyer may see the report without charge if refused credit. or for a charge if just curious.

Fair Market Value - Price the property would be negotiated between a willing seller and willing buyer in a reasonable time. Usually arrived at by comparable sales in the area.

Federal Home Loan Mortgage Corporation (FHLMC-Freddie Mac) -
A semi-governmental purchaser of mortgages in the secondary market.
The trading of mortgage securities (Participation Certificates) for mortgages
in its guarantor program has been highly successful.

Federal Tax Lien - A lien attaching to property for nonpayment of a federal tax (estate, income, etc.). A federal tax lien differs from other liens in that
it is not automatically wiped out by foreclosing on a mortgage or trust deed recorded before the tax lien (except by judicial foreclosure).

Fee Simple - An estate under which the owner is entitled to unrestricted powers to dispose of the property, and which can be left by will or inherited. Commonly, a synonym for ownership.

Fixed Rate Mortgage - A mortgage having a rate of interest which
remains the same for the life of the mortgage.

FNMA (Fannie Mae) - A private corporation dealing in the purchase of first mortgages at discounts.

Foreclosure - A proceeding in or out of court, to extinguish all rights, title, and interest, of the owner(s) of property in order to sell the property to
satisfy a lien against it.

GNMA (Ginnie Mae) - Government National Mortgage Association. A federal association, working with FHA, which offers special assistance in obtaining mortgages, and purchases mortgages in a secondary capacity.

Grant Deed - One of the many types of deeds used to transfer real
property. Contains warranties against prior conveyances or encumbrances.
When title insurance is purchased, warranties in a deed are of little
practical significance.

Grantee - One to whom a grant is made. Generally, the buyer.

Grantor - One who grants property or property rights.

Gross Income - The scheduled (total) income, either actual or estimated, derived from a business or property.

Hazard Insurance - Real estate insurance protecting against loss caused
by fire, some natural causes, vandalism, etc., depending upon the terms
of the policy.

Home Owner's Association - (1) An association of people who own
homes in a given area, formed for the purpose of improving or maintaining
the quality of the area. (2) An association formed by the builder of
condominiums or planned developments, and required by statute in some states. The builder's participation as well as the duties of the association
are controlled by statute.

Impound Account - Account held by a lender for payment of taxes, insurance, or other periodic debts against real property. The mortgagor or trustor pays a portion of, for example, the yearly taxes, with each monthly payment. The lender pays the tax bill from the accumulated funds.

Interest Rate - The percentage of an amount of money which is paid for its use for a specified time. Usually expressed as an annual percentage.

Judgment - The decision of a court of law. Money judgments, when
recorded, become a lien on real property of the defendant.

Judicial Foreclosure - Foreclosure through court action rather than by a power of sale. Judicial foreclosure is sometimes necessary to remove
certain tax liens.

Junior Lien - A lien which is subordinate to a prior lien.

Junior Mortgage - Any mortgage of lesser priority than a first mortgage.

Lien - An encumbrance against property for money, either voluntary or involuntary. All liens are so that the owner or general contractor can
receive a draw on a construction loan.

Liquid Assets - Cash or assets immediately convertible to cash.

Loan Origination Fee - A one time set up fee charged by the lender.

Loan To Value Ratio (LTV) - The ratio expressed as a percentage, of the amount of a loan to the value or selling price of real property. Usually, the higher the percentage, the greater the interest charged. Maximum percentages for banks, savings and loans, or government insured loans,
is set by the statute.

Maintenance Fee - As applied to condominiums and planned
developments, the amount charged each unit owner to maintain the
common area. Usually a monthly fee paid as part of the budget.

Manufactured Home - Factory-built or prefabricated housing, including
mobile homes.

Margin - In adjustable rate mortgages, the amount added to an index to determine the adjusted interest rate (also known as spread).

Market Value - The highest price a willing buyer would pay and a willing seller accept, both being fully informed, and the property exposed for a reasonable period of time. The market value may be different from the
price a property can actually be sold for at a given time (market price).

Mortgage Banker - A company providing mortgage financing with its own funds rather than simply bringing together lender and borrower, as does a mortgage broker. Although the mortgage banker uses its own funds, these funds are generally borrowed and the financing is either short term or,
if long term, the mortgages are sold to investors (many times insurance companies) within a short time.

Mortgage Broker - One who, for a fee, brings together a borrower and
lender, and handles the necessary applications for the borrower to obtain a loan against real property by giving a mortgage or deed of trust as security.
Also called a loan broker.

Mortgage Company - A company authorized to service real estate loans, charging a fee for this service.

Mortgage Insurance - Insurance written by an independent mortgage insurance company (referred to as an "MIC") protecting the mortgage
lender against loss incurred by a mortgage default, thus enabling the lender
to lend a higher percentage of the sale price. The Federal Government
writes this form of insurance through the FHA.

Mortgage Insurance Premium - The amount paid by a mortgagor for mortgage insurance.

Mortgage Note - A written promise to pay a sum of money at a stated interest rate during a specified term. It is secured by a mortgage.

Mortgage Warehousing - A system whereby a mortgage company
will hold loans which would ordinarily be sold, in order to sell later at a
lower discount. These mortgages are used as collateral security with a
bank to borrow new money to loan.