Fair Credit and Charge Card Disclosure Act – An amendment to the Truth In Lending Act that requires the disclosure of the costs involved in credit card plans that are offered to the general public.
Fair Credit Billing Act – A federal legislation that sets out a method of resolving specific error in order to protect consumers from making payments on erroneous charges.
Fair Credit Reporting Act (FCRA) – A federal law that provides consumers with certain rights regarding credit reporting agencies (“CRAs”) wherein CRAs are required to provide accurate information with respect to an individual’s application for insurance, employment, credit or loans.
Fair Debt Collection Practices Act (FDCPA) – Federal legislation that prohibits exploitative debt collection practices.
Fair Isaac Company, Inc. (FICO) – Developers of the formulae used to create credit scores.
Fair Market Value – The likely selling price of a home, usually determined by a professional appraisal.
Fannie Mae – Federal National Mortgage Association, a federal enterprise that buys and securitizes mortgages for re-sale in the secondary market.
The Fed – Shorthand for The Federal Reserve System, the group of 12 Federal Reserve Banks that serve as the central bank of the USA. Also can also mean the Board of Governors of the Federal Reserve System. This Board sets the overnight lending rates banks charge each other. Mortgage rates are not linked directly to these rates, but lenders are influenced by its ebb and flow.
Federal Housing Administration (FHA) – A federal agency under the aegis of the Department of Housing and Urban Development (“HUD”). The FHA issues insurance for some residential mortgages, and writes regulations for underwriting and for new construction secured by these mortgages.
FHA Loans — A loan program that sells low-rate mortgages to buyers willing to make a down payment of at least three percent.
Fiduciary — A person who is entrusted with duties on behalf of another, i.e., most often as a trustee. A debtor in Chapter 11 bankruptcy filing is a fiduciary for creditors and owing responsibility to uphold the concerns of creditors, rather than the debtor’s shareholders.
Finance Charge – A compendium of the costs associated with obtaining some types of credit. Finance charges include interest paid over the life of a loan, points and other items.
First Mortgage – The primary mortgage on a property.
Fixed-Rate Loan – An annual interest rate that does not vary.
Flood Certification – A document determining whether a property is located in a flood zone.
Flood Insurance – Insurance that protects against loss due to flood. Lenders will often require this insurance if your property is located in a flood zone.
Foreclosure – A legal procedure, usually triggered by a borrower’s default, wherein property is sold by the lender to repay a borrower’s loan. A foreclosure sale often times does not fully cover the amount of the defaulted loan, and borrowers may be required to pay the difference.
Freddie Mac – A government-sponsored enterprise that buys and securitizes mortgages for resale in the secondary market.
Fully Amortized Loan – A loan in which the entire payment schedule has been met and the principal is paid off.
Funding Date – The day the loan is available to the borrower.
Garnishment — A process where a person’s property, money, or credits in possession are applied to the payment of a debt through legal guidelines.
General, Unsecured Claim — A creditor’s claim for payment for which the creditor fails to possess collateral. If the debtor’s available funds are sufficient to provide for unsecured claims, the creditor’s claims are paid in proportion to the size of the debt relative to other unsecured claims in.
General Warranty Deed (Quit-Claim Deed) – A legal document transferring ownership of real estate. This document is transferred to the buyer at closing. Usually lenders undertake a “title search” or “title report” before making a loan to determine that a borrower is the legal owner of a property used to help secure a loan.
Gift Funds – Money a borrower receives that is not required to be repaid.
Ginnie Mae (Government National Mortgage Association, or GNMA) – A federal corporation guided by HU that groups FHA-insured and VA-guaranteed loans to back securities for private investment. As with Fannie Mae and Freddie Mac, the Ginnie Mae’s income provides funding that is lent to eligible borrowers.
Good Faith – A term describing a lender’s trust of your intentions to make timely payments and to not default on your loan.
Good Faith Estimate (GFE) – A list of estimated loan costs a lender must provide to a borrower within three business days of his or her loan application.
Grace Period – The time period in which you are allowed pay a bill in full, thereby avoiding interest charges.
Grantee — The person to whom the title of the property is being transferred.
Grantor — The person (seller) who transfers title to another person (buyer).
Gross Annual Income – A borrower’s total pre-tax income from all sources.
Gross Monthly Income – A borrower’s total monthly pre-tax income from all sources.
Guarantee – A promise made by a second party, to be responsible for a debt or abide by a contract of another party, in the event the original party defaults.
Guarantee Fee – An amount of money paid to a guarantee agency for the purpose of insuring a loan against default.
Guarantor – Person who is charged with paying a bill.
Habendum Clause — A clause that means “to have and to hold,” the Habendum Clause defines the quantity and parts of an estate that can be transferred to the new owner of land, i.e., inheritance process.
Hazard Insurance – Insurance protection from fire, windstorm, acts of god, etc.
High Balance – The largest amount of money that you ever have owed on one account.
Holder – The owner of a loan that has the right to collect from a borrower. Can be an individual or an entity.
Home Equity Line of Credit (HELOC) – Credit line secured by the equity in a borrower’s property.
Home Equity Loan – An installment loan secured by the equity in a borrower’s home.
Home Inspection – A professional, third party property inspection of major appliances and structural elements. A homebuyer’s contract may specify that the seller pay for certain repairs. If the seller refuses, and a buyer may be allowed to back out of the sale, depending of course on the specifics of the contract.
Homeowners’ Association – A group of property owners that devises rules and ordinances of a subdivision, condominium complex, etc.
Homeowners’ Insurance – Insurance to protect your home against major acts of god, theft, and/or personal liability.
HUD – The Department of Housing and Urban Development, a federal agency.
HUD-1 Statement – Also called a “settlement sheet,” this itemized list of closing costs may include commissions, loan fees and points, and/or money for escrow payments, taxes and insurance. It is signed by buyer and seller, who may or may not share closing costs.
Hypothecate — A process that involves utilizing property as security while still retaining possession of it.
Impound – A portion of a monthly loan payment set aside by a lender or service for taxes, hazard insurance, mortgage insurance, and/or other scheduled expenses.
Indemnify — Losses and damages caused by one person that are the responsibility of another.
Index – The index used to determine changes in annual percentage rate at the beginning of each adjustment period.
Inflation Rate – A percentage used to quantify the increase in price of consumer goods over a period of time.
Initial Rate – The interest rate paid by a borrower at the beginning of a loan. These rates often rise or “balloon” over the life of a loan.
Installment Credit – Those credit accounts where the debt is divided into successive amounts to be paid specified intervals, i.e., weekly, monthly, etc.
Instrument — A legal document.
Interest – Fees paid by borrowers to lenders in addition to principal.
Interest-Only Payments – Payment of interest only for a portion of the loan. See balloon loan or balloon payment.
Interest Rate – The fee a lender charges a borrower, paid over a period of time, which is separate from the principal amount.
Interest Rate Cap – A limit on the amount an interest rate can fluctuate, both in a periodic adjustment and over the life of the loan.
Introductory (or Intro) Rate – The often-low rate a creditor or lender charges to a debtor for an initial period of time. Often called a teaser rate, the introductory rate is used to entice borrowers to accept credit terms. The introductory rate eventually transitions to the indexed rate or standard interest rate.
Investigation – Term for the verification process in cases where credit reporting agencies must confirm information on a credit report that is disputed by a consumer. Usually, the credit grantor who supplied the information is contacted to review the disputed information, and to the report is updated.
Investment Property – Property purchased to generate rental income and/or to be resold at a profit.
Involuntary Lien — A lien issued against a property without the approbation of the current owners.
Joint Account – A financial account with two or more legally responsible parties.
Joint Ownership — When two or more parties own the same property.
Joint Venture — A project where two or more individuals take part in the transaction to share the cost, risk, and reward.
Judgment — The final decision of the court resolving a dispute and determining the rights and obligations of the parties involved.
Judgment Granted – The final determination of a court when a case is brought forward. The rights of the parties involved in a lawsuit will be described in the judgment.
Jumbo Loan – A large, “non-conforming” loan not eligible for sale to Fannie Mae and Freddie Mac.
Junior Lien — A lien that is subordinate or another lien (having occurred after the senior lien).