Glossary |
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| There are 26 entries in the glossary. |
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| Face to Face Interview | Personally meeting with the property owner. The lending institution uses the information gained to update company information concerning the property owners employment, income, financial obligations, additional income and repayment proposals. |
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| Fair Debt Collection Practices Act | Abbreviation for The Fair Debt Collection Practices Act implemented by the Congress to protect consumers from being harassed by debt collectors. Ensures that the collection agencies collect debt payments without adopting unlawful means. |
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| Fannie Mae | Federal National Mortgage Association or FNMA. A congressionally chartered corporation which buys mortgages on the secondary market, pools them and sells them as mortgage-backed securities to investors on the open market. Monthly principal and interest payments are guaranteed by FNMA but not by the U..S. Government. |
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| Fannie Mae Form 30 | This inspection is for Federal National Mortgage Association (Fannie Mae) loans and is a visual inspection to provide the latest property and area conditions and any conditions that could potentially affect the value or marketability of the property.
This inspection provides the needed property information obtained from a physical inspection for completion of the Fannie Mae Form 30. |
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| FDCPA | Abbreviation for The Fair Debt Collection Practices Act implemented by the Congress to protect consumers from being harassed by debt collectors. Ensures that the collection agencies collect debt payments without adopting unlawful means. |
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| Federal Emergency Management Agency | The Federal Emergency Management Agency’s mission is to lead the effort to prepare the nation for all hazards and effectively manage federal response and recovery efforts following any national incident. |
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| Federal Housing Administration | A division of the Department of Housing and Urban Development (HUD), this government agency insures residential mortgage loans that are made by private lenders, protecting the lenders against loss in the event of borrower default. The FHA also sets standards for underwriting mortgage loans. |
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| Federal National Mortgage Association | FNMA or Fannie Mae. A congressionally chartered corporation which buys mortgages on the secondary market, pools them and sells them as mortgage-backed securities to investors on the open market. Monthly principal and interest payments are guaranteed by FNMA but not by the U..S. Government. |
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| FEMA | The Federal Emergency Management Agency’s mission is to lead the effort to prepare the nation for all hazards and effectively manage federal response and recovery efforts following any national incident. |
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| FHA | The Federal Housing Administration (FHA), which is a part of the Department of Housing and Urban Development (HUD), provides federal mortgage insurance which ensures that mortgage lenders will be reimbursed in the event homebuyers default on the mortgage. When a lender is forced to foreclose on an FHA-insured single family home, townhome, or condominium because the owner can no longer make payments, it can file a claim with FHA for the balance due on the mortgage and convey title of the property to HUD. |
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| Field Chase | A term for a field assignment most commonly used by those looking for vehicles of delinquent borrowers. The phrase is seldom used by field inspectors that concentrate on real estate types of field inspections. |
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| Field Inspection | A visual inspection of property or other collateral such as construction equipment, motorcycles, computers, etc. The inspection may involve interviews with the property owners or occupants. |
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| Field Services | An on-site performance of a task for another interested party that does not have the ability or desire to do the task for themselves. The task requires the use of one or more senses - sight, sound, touch, smell, etc. |
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| First Time Vacant | The term used to identify the first report of a vacant property. |
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| Flood Hazard Inspection | Flood Disaster Protection Act
The Flood Disaster Protection Act (FDPA) was passed by Congress in 1973 to expand the National Flood Insurance Program established by the National Flood Insurance Act of 1968. The purpose of the act is to mandate participation in the National Flood Insurance Program as a condition for receiving federal aid in financing the construction, purchase, repair, or improvement of a building or
mobile home located in a flood hazard area (SPFA).
Further amendment to the Act was passed in 1974 requiring all federally regulated or insured lenders to notify a prospective borrower, before settlement, if the property securing the loan was located in a special flood hazard area. Essentially this means that the lender now had to make sure there was a
flood insurance policy in effect on the loan if the property was in a special flood hazard area. A further amendment to this Act in 1977 made it mandatory for the lender to notify borrowers whether they would be eligible for federal disaster assistance in the event of a declared flood disaster.
The act was again revised in 1994 (National Flood Insurance Reform Act) to broaden the mandatory flood insurance requirements of the NFIP, placing primary responsibility for ensuring compliance with the act on lenders by compelling them to do the following:
• Follow more disciplined initial borrower notification requirements.
• Force-place the required flood insurance for borrowers who do not purchase or maintain it.
• Escrow flood insurance premiums on residential and mobile home loans along with escrows for
taxes and insurance.
• Document a determination that a mortgaged property is flood prone.
Under NFIA, once a community has been declared to be in a special flood hazard area by the FEMA (including mudslide, or flood erosion risk), it has one year in which to become a participant in the National Flood Insurance Program, or no federal financial assistance will be forthcoming. The importance of this to lenders is that flood insurance is required on any loan secured by a property
where any portion of the structure is located in a special flood hazard area where the community is
participating in the National Flood Insurance Program. Essentially the burden of determining whether the location of the property is in a special flood hazard area rests on the lender.
Requirements
Flood Insurance is required on loans made by federally regulated lending institutions if the following
criteria exist:
• The community in which the property is located is participating in the National Flood Insurance Program; and
• Any portion of the structure on the property securing the loan is located in a special flood hazard area.
Compliance
Properties Eligible for NFIP Coverage
Any walled or roofed structures other than gas or liquid storage tanks, that are above ground and affixed to a permanent site are eligible properties under the National Flood Insurance Program. Most buildings under construction are also eligible for coverage. Manufactured homes are eligible for coverage if they are on permanent foundations and anchored to resist floatation, collapse, or lateral
movement. Among properties that are NOT eligible for coverage are recreational vehicles, park trailers and travel trailers. Separate flood policies are required for each individual building, although coverage is extended to detached garages and carports that service the insured dwelling. For condominiums, a Residential Condominium Building Association Policy is available through the homeowners associations.
Lender Compliance
Federally regulated lenders must ensure flood insurance is in place at closing and for the entire term of the loan for mortgages secured by structures located in a special flood hazard area. The burden of determining whether the location of the property is in a special flood hazard area is on the lender, even when a third-party flood determinations company is used to make the determination.
Under the reforms instituted by the 1994 Revision, lender responsibilities include the following:
• Determining whether the building offered for security is, or will be, located in a special flood hazard area (SFHA);
• Documenting the determination of flood hazard status
• Requiring that flood insurance to the appropriate limit is obtained when necessary; and
• During the term of the loan, ensuring that flood insurance is maintained or added if the lender becomes aware that the building involved subsequently becomes part of an SFHA.
When a lender determines that a property is in a SFHA, they must notify the borrower who is purchasing the property of the following:
• The property to be held as security on the loan is located in a special flood hazard area.
• Flood Insurance is required in order for the lender to make the loan and should be for the principal
amount of the loan or the maximum amount available under NFIP.
• Whether or not federal disaster relief will be available in the event of damage to the property from a flood.
The notice to the borrower must contain specific language and must be delivered to the borrower prior to the closing of the loan. The lender should be named as mortgagee on the policy to protect the lender’s interest in the event of damage to the building. The flood insurance coverage must be in place at the time of closing and must be maintained for the term of the loan. If the lender at any time determines that the coverage has lapsed and the borrower refuses to reinstate the policy, the lender must force-place insurance on the loan. |
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| Flood Hazard Verification | Verification of the location of a property on a plat map or a drawing provided to the inspector. Require measurements from specific points to show the property location in relation to other landmarks such as streets, bodies of water, etc |
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| Floor Plan Financing | A specializied segment of lending where banks provide working capital support for retailers of consumer goods such as automobiles, recreational vehicles, boats, and big ticket appliances. Generally, the large investment and/or slow cash conversion cycle limits a retailers ability to internally finance its inventory. The bank provides funding for the purchase of inventory and normal operating expenses until the inventory is sold. |
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| Floor Plan Inventory | A count of items in inventory to determine what has been sold and what is still on site. |
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| FNMA | Federal National Mortgage Association or Fannie Mae. A congressionally chartered corporation which buys mortgages on the secondary market, pools them and sells them as mortgage-backed securities to investors on the open market. Monthly principal and interest payments are guaranteed by FNMA but not by the U..S. Government. |
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| Follow Up List | A list of inspections that can not be closed out until a problem or question is answered to the satisfaction of the company sending the list. Common problems are \"your information does not agree with the information we have on file\", \"the picture you submitted does not match the picture we have on file\", etc. |
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| Forebearance | A refraining from the the enforcement of something (as a debt, right, or obligation) that is due.
Dictionary.com. Merriam-Webster's Dictionary of Law. Merriam-Webster, Inc. http://dictionary.reference.com/browse/forebearance (accessed: March 04, 2007). |
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| Foreclosure | This is the process by which a lien holder aquires the property through court procedures. Each state operates a little differently, but this process can typically take several months once started and typically does not start until the owner is 60-90 days behind in payments. |
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| Foreclosure Inspection | Inspect to determine the occupancy status and exterior condition of a property. No contact can be made with the homeowner. Contact may be made with neighbors to help determine occupancy. Can not discuss legal status, loans, etc.
Photographs required. |
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| Fraud | A deception deliberately practiced in order to secure unfair or unlawful gain |
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| Freddie Mac | A corporation, created by Congress, that purchases conventional mortgages from lending institutions (that are members of the Federal Reserve) and sells them as securities to the dealer community. (See Fannie Mae, which sells them directly to investors.) |
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| FTV | Abbreviation of \"First Time Vacant\" : The term used to identify the first report of a vacant property. |
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