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Continental Funding Corp. - Mortgage Services

CORPORATE OFFICE 3516 9Th St. Suite G Riverside, CA 92501 MAIN NUMBERS Off.: 888-777-9425 Fax: 951.686.8141

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The Loan Process Tips and Tricks FAQs Glossary

Glossary

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Federal National Mortgage Association (FNMA, Fannie Mae)
Purchases loans from lenders, securitizes them and sells FNMA mortgage backed securities on wall street
Federal Home Loan Bank Board (FHLBB)
Provides financing to farmers.
Farmer's Home Administration (FmHA)
An agency, within the U.S. Department of Agriculture, that administers assistance programs for purchasers of homes and farms in small towns and rural areas.
Federal Home Loan Mortgage Corporation (FHLMC, Freddie Mac)
Purchase loans from members of the Federal Reserve and the Federal Home Loan Bank Systems, securitizes them and sells FHLMC mortgage backed securities on wall street.
Federal Housing Administration (FHA)
An agency within the U.S. Department of Housing and Urban Development (HUD) that administers loan programs, issues loan guarantees to make more housing available.
Federal Reserve System
The central federal banking system that regulates and provides services to member commercial banks. Also has the responsibility for conducting federal monetary policy.
Fee Simple (Fee Absolute or Fee Simple Absolute)
Absolute ownership of real property; owner is entitled to the entire property with unconditional power of disposition during the owners life and upon his death the property descends to the owner's designated heirs.
Fidelity Bond
An assurance, generally purchased by an employer, to cover employees who are entrusted with valuable property or funds. Example : A landlord employs a clerk who collects rents. To safeguard these funds during the collection process, the landlord purchases a fidelity bond the clerk.
Fiduciary
A person in a position of trust or responsibility with specific duties to act in the best interest of a client. A real estate broker is a fiduciary for his/her clients.
Finance Charge
Interest charged by a lender.
First Mortgage
A mortgage that has priority as a lien over all other mortgages. In the case of a foreclosure the first mortgage will be satisfied before other mortgages. See also second mortgage.
Fixture
Improvements or personal property attached to the land so as to become a part of the real estate. Fixtures are transferred to the buyer upon sale of the property. To determine whether an item is a fixture include:
  • Intent (was it intended to be part of the property)
  • How is it fixed ?
  • Is the fixture essential to the property ?
  • Relationship - was the fixture intended to be a part of the tenant's business ?
Example : John sells his house to Mary. John wants to take the chandelier because he states it is personal property. Mary wants the chandelier to stay because she believes it is a fixture.
Flood Insurance
An insurance policy that covers property damage due to natural flooding. Flood insurance may be required on properties in a flood zone.
Foreclosure (Repossession)
A legal process by which the lender forces a sale of a property because the borrower has not met the terms of the mortgage.
Free and clear
A property that has no liens.
FSBO
For sale by owner. A property for sale that is not listed with a real estate broker.
Fully indexed rate
The fully indexed rate=value of the index + margin. See adjustable loans.