Glossary of Terms - F
Fair Market Value
The price at which property would change hands between a willing buyer and a willing seller, where both parties have reasonable knowledge of the relevant facts and neither party is under any compulsion to buy or sell.
Fannie Mae
The Federal National Mortgage Corporation (FNMA) is a publicly owned government-sponsored corporation that was established in 1938 to purchase government-backed and conventional mortgages. The objective of this organization is to increase the affordability of home mortgage funds for low, moderate, and middle-income home buyers. Fannie Mae is a shareholder-owned company that is traded on the New York Stock Exchange.
Financial Responsibility Law
A law that requires the operator of an automobile to show financial ability to pay for automobile-related losses. In many states evidence usually takes the form of a minimum amount of automobile liability insurance.
Fixtures
Improvements attached to real estate that are not intended to be moved and so become part of the real estate.
Floater
Coverage for property which moves from location to location. If the floater covers "scheduled" property, coverage is listed separately for each item. If the floater covers "unscheduled" property, all property is covered for the same limits of insurance.
Flood Insurance
Insurance that provides coverage for losses resulting from a flood. This coverage is not included in a standard homeowners policy, but can sometimes be added for an extra premium. In addition, depending on the community where you live, you may be eligible for federal flood insurance through the National Flood Insurance Act. The National Flood Disaster Protection act of 1973 requires flood insurance as a condition of Federal or Federally related financial assistance on all properties located in Special Flood Hazard Areas as determined by maps published by the federal government. The Act also applies to Federal agency lenders, such as the SBA and USDA, government sponsored enterprises for housing such Freddie Mac and Fannie Mae, and to lenders under the jurisdiction of Federal entities such as the FDIC, OTS and NCUA.
Force Place Insurance
Insurance placed by the lender to protect the collateral securing their loan when the borrower fails to provide insurance as specified in the loan agreement. Force Place Insurance primarily protects the interest of the lender, and may provide limited protection for the borrower as well. It generally does not provide coverage for contents and liability insurance on mortgage loans, or meet the requirements of Financial Responsibility Laws enforced on the borrower on consumer loans.
Foreclose
The process by which a lender seizes an asset (usually a home or other real estate) after the owner has defaulted on the loan.
Fraudulent Conveyance
The gift, sale, or transfer of property made with the intent of defrauding creditors by attempting to place assets beyond the reach of creditors.
Freddie Mac
The Federal Home Loan Mortgage Corporation (FHLMC), a publicly chartered agency that buys qualifying residential mortgages from lenders, packages them into new securities backed by those pooled mortgages, provides certain guarantees, and then resells the securities on the open market. Established in 1970, the corporation's stock is owned by savings institutions across the U.S. and is held in trust by the Federal Home Loan Bank System. The corporation has created an enormous secondary market which provides more funds for mortgage lending and allows investors to buy high yielding securities backed by federal guarantees.