F

Question 1

FEDERAL HOME LOAN MORTGAGE CORPORATION (FREDDIE MAC)

Answer 1

A government-sponsored enterprise created by Congress that purchases conforming mortgage loans and resells them in the secondary market.

Question 2

FEDERAL HOUSING ADMINISTRATION (FHA)

Answer 2

A division of the Department of Housing and Urban Development. Its main activity is insuring residential mortgage loans made by private lenders.

Question 3

FEDERAL NATIONAL MORTGAGE ASSOCIATION (FANNIE MAE)

Answer 3

A government-sponsored enterprise created by Congress that purchases conforming mortgage loans, as well as those insured by the FHA, and resells them in the secondary market.

Question 4

FEDERAL TRADE COMMISSION (FTC)

Answer 4

A federal agency with responsibilities that include enforcing compliance with federal lending laws.

Question 5

FEE SIMPLE

Answer 5

The most basic form of real estate property rights. Fee simple means that when a buyer acquires a property, it includes the land and all improvements to the land.

Question 6

FEES

Answer 6

Any kind of money that is paid in conjunction with a mortgage loan, other than the actual loan amount and interest. Might include third-party fees, such as those for credit reports or appraisals, or origination/broker fees. Fees affect the total cost of credit when obtaining a loan.

Question 7

FIDUCIARY DUTY

Answer 7

A duty of loyalty, good faith, and the obligation to prioritize the interests of the principal over the interests of the agent. Some state laws provide that mortgage professionals owe a fiduciary duty to borrowers; other states do not.

Question 8

FINANCE CHARGE

Answer 8

Any kind of fees or charges associated with obtaining credit, expressed in a dollar amount. Finance charges can include many items, including loan fees, miscellaneous fees, per diem interest, escrows for mortgage insurance, etc.

Question 9

FIXED-RATE MORTGAGE

Answer 9

A mortgage with an interest rate that will remain the same for the entire term of the loan.

Question 10

FLOAT

Answer 10

The opposite of locking an interest rate. Following formal application and identification of a loan program, a mortgage loan applicant may elect to wait to lock an interest rate in anticipation of interest rates falling. See Rate Lock.

Question 11

FRAUD

Answer 11

An intentional misrepresentation or concealment of a fact that deceives another and causes him/her to act upon the false representation or concealment, to his/her detriment.

Question 12

FRAUD FOR HOUSING

Answer 12

A type of fraud in which an individual misrepresents his or her employment history, credit history, intention to occupy a property as a primary residence, or income in order to improve his or her chances of securing a mortgage.

Question 13

FRAUD FOR PROFIT

Answer 13

The focus of most anti-fraud efforts. Fraud for profit typically involves the conspiratorial involvement of individuals throughout the mortgage industry, such as bankers, brokers, loan originators, processors, underwriters, appraisers, and others.
a.k.a.: Industry insider fraud

Question 14

FRONT-END RATIO

Answer 14

A comparison of a person’s income to the monthly housing expenses that he or she will be taking on through the mortgage loan.
a.k.a.: Housing debt ratio.

Question 15

FULL DISCLOSURE

Answer 15

A requirement to reveal all information pertinent to a transaction.

Question 16

FULLY-AMORTIZED ARM

Answer 16

An ARM with a monthly payment that is sufficient to amortize the remaining balance, at the interest accrual rate, over the amortization term.

Question 17

FULLY-INDEXED RATE

Answer 17

In an ARM, the interest rate indicated by adding the current index value and the margin. For example, if the index were 7% and the margin 2.75%, the fully-indexed rate would be 9.75%.

Question 18

FUNDING

Answer 18

Funds provided by the lender at settlement. The act of disbursing the cash for a loan.