REAL ESTATE TERMS

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FACADE: The front of a building, often used to refer to a false front and as a metaphor.

FAIR MARKET VALUE . This is the amount of money that would be paid for a property offered on the open market for a reasonable period of time with both buyer and seller knowing all the uses to which the property could be put and with neither party being under pressure to buy or sell.

FANNIE MAE: An acronymic nickname for Federal National Mortgage Association (FNMA).

FARMERS HOME ADMINISTRATION: An agency of the Department of Agriculture. Primary responsibility is to provide financial assistance for farmers and others living in rural areas where financing is not available on reasonable terms from private sources.

FEDERAL DEPOSIT INSURANCE CORPORATION: (FDIC) Agency of the federal government which insures deposits at commercial banks, savings banks and savings and loans.

FEDERAL HOME LOAN MORTGAGE CORPORATION: An independent stock company which creates a secondary market in conventional residential loans and in FHA and VA loans by purchasing mortgages.

FEDERAL HOUSING ADMINISTRATION: (FHA) An agency of the federal government that insures private mortgage loans for financing of new and existing homes and home repairs.

FEDERAL LAND BANK SYSTEM: Federal government agency making long term loans to farmers.

FEDERAL NATIONAL MORTGAGE ASSOCIATION: (FNMA) Fannie Mae a quasipublic agency converted into a private corporation whose primary function is to buy and sell FHA and VA mortgages in the secondary market.

FEDERAL RESERVE SYSTEM: The federal banking system of the United States under the control of central board of governors (Federal Reserve Board) involving a central bank in each of twelve geographical districts with broad powers in controlling credit and the amount of money in circulation.

FEE: An estate of inheritance in real property.

FEE SIMPLE DEFEASIBLE: An estate in fee subject to the occurrence of a condition subsequent whereby the estate may be terminated.

FEE SIMPLE ESTATE: The greatest interest that one can have in real property. An estate that is unqualified, of indefinite duration, freely transferable and inheritable.

FEUDAL TENURE: A real property ownership system in which ownership rests with a sovereign who may grant lesser interests in return for service or loyalty. This is in contrast to allodial tenure.

FHLMC: See FEDERAL HOME LOAN MORTGAGE CORPORATION.

FIDELITY BOND: A security posted for the discharge of an obligation of personal services.

FIDUCIARY: A person in a position of trust and confidence, as between principal and broker; broker as fiduciary owes certain loyalty which cannot be breached under the rules of agency.

FIDUCIARY DUTY: That duty owed by an agent to act in the highest good faith toward the principal and not to obtain any advantage over the latter by the slightest misrepresentation, concealment, duress or pressure.

FILTERING: The process whereby higher-priced properties become available to lower income buyers.

FINANCIAL INTERMEDIARY: Financial institutions such as commercial banks, savings and loan associations, mutual savings banks and life insurance companies which receive relatively small sums of money from the public and invest them in the form of large sums. A considerable portion of these funds areloaned on real estate.

FINANCING PROCESS: The systematic 5 step procedure followed by major institutional lenders in analyzing a proposed loan, which includes: filing of application by a borrower; lender's analysis of borrower and property; processing of loan documentation; closing (paying) the loan; and servicing (collection and record keeping).

FINANCING STATEMENT: The instrument which is filed in order to give public notice of the security interest and thereby protect the interest of the secured parties in the collateral. (See definition of Security Interest and Secured Party.)

FIRST MORTGAGE: A legal document pledging collateral for a loan (See .mortgage.) that has first priority over all other claims against the property except taxes and bonded indebtedness. That mortgage superior to any other.

FIRST TRUST DEED: A legal document pledging collateral for a loan (See .trust deed.) that has first priority over all other claims against the property except taxes and bonded indebtedness. That trust deed superior to any other.

FISCAL CONTROLS: Federal tax revenue and expenditure policies used to control the level of economic activity.

FISCAL YEAR: A business or accounting year as distinguished from a calendar year.

FIXITY OF LOCATION: The physical characteristic of real estate that subjects it to the influence of its surroundings.

FIXTURES: Appurtenances attached to the land or improvements, which usually cannot be removed without agreement as they become real property; examples: plumbing fixtures, store fixtures built into the property, etc.

FORECLOSURE: Procedure whereby property pledged as security for a debt is sold to pay the debt in event of default in payments or terms.

FORFEITURE: Loss of money or anything of value, due to failure to perform.

FRANCHISE: A specified privilege awarded by a government or business firm which awards an exclusive dealership.

FRAUD: The intentional and successful employment of any cunning, deception, collusion, or artifice, used to circumvent, cheat or deceive another person whereby that person acts upon it to the loss of property and to legal injury. (Actual Fraud: A deliberate misrepresentation or representation made in reckless disregard of its truth or its falsity, the suppression of truth, a promise made without the intention to perform it, or any other act intended to deceive.)

FRAUDS, STATUTE OF: (See Statute of Frauds.)

.FREDDIE MAC.: (See FEDERAL HOME LOAN MORTGAGE

CORPORATION.)

FREEHOLD ESTATE: An estate of indeterminable duration, e.g., fee simple or life estate.

FRONTAGE: A term used to describe or identify that part of a parcel of land or an improvement on the land which faces a street. The term is also used to refer to the lineal extent of the land or improvement that is parallel to and facing the street, e.g., a 75-foot frontage.

FRONT FOOT: Property measurement for sale or valuation purposes; the property measured by the front linear foot on its street line.each front foot extending the depth of the lot.

FRONT MONEY: The minimum amount of money necessary to initiate a real estate venture, to get the transaction underway.

FROSTLINE: The depth of frost penetration in the soil. Varies in different parts of the country. Footings should be placed below this depth to prevent movement.

FULLY INDEXED NOTE RATE: As related to adjustable rate mortgages, the index value at the time of application plus the gross margin stated in the note.

FUNCTIONAL OBSOLESCENCE: A loss of value due to adverse factors from within the structure which affect the utility of the structure, value and marketability.

FUTURE BENEFITS: The anticipated benefits the present owner will receive from the property in the future.

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