Escrow Terms & Phrases
Terms and Phrases is Chicago Title Glossary of definitions, meanings, and
descriptions of significance for some of our industry's most often used
terms and phrases.
Look for terms and phrases in Alphabetical Order:
Farmer Home and Administration (FMHA) -- The federal agency which makes, participates, and ensures loans for rural housing and farms.
Federal Deposit Insurance Corporation (FDIC) -- The federal corporation which insures against loss of deposits in banks and, since 1989, in savings associations.
Federal Tax Lien -- A lien attaching to property for nonpayment of a federal tax (estate, income, etc.). A federal tax lien differs from other liens in that it is not automatically wiped out by foreclosing on a mortgage or trust deed recorded before the tax lien (except by judicial foreclosure).
Fee Simple -- An estate under which the owner is entitled to unrestricted powers to dispose of the property, and which can be left by will or inherited. Commonly, a synonym for ownership.
Fee Simple Absolute -- A term now used synonymously with fee simple.
F.H.A.(Federal Housing Administration) -- A federal agency which insures first mortgages, enabling lenders to loan a very high percentage of the sale price.
FHA Escape Clause -- A clause stating that the buyer (borrower) shall not be obligated to buy nor shall any deposit be lost if the appraisal is less than the agreed upon amount.
Fictitious Instrument -- An instrument (usually a mortgage or deed of trust) which is recorded not on specific property but to be incorporated by reference into future mortgages or deeds of trust. This is done by reference to the recording information of the fictitious instrument in the instrument recorded against specific property. This shortens the latter instrument and thereby cuts the cost of printing, paper, recording, etc. The fictitious instrument contains general language applicable to any specific property.
Financing Costs -- The cost and interest and other charges involved in borrowing money to build or purchase real estate.
First Refusal Right -- A right, usually given by an owner to a lessee, which gives the lessee a first chance to buy the property if the owner decides to sell. The owner must have a legitimate offer, which the lessee can match or refuse. If the lessee refuses, the property can then be sold to the offeror.
Flood Insurance -- Insurance indemnifying against loss by flood damage. Required by lenders (usually banks) in areas designated (federally) as potential flood areas. The insurance is private but federally subsidized.
Floor Time -- A period during the working day when a specific salesperson is responsible for general inquiring (walk-in or telephone) regarding property in a brokerage office. This is generally established as a set, rotating number of hours per week for each salesperson. When a salesperson is "on the floor" he or she must be in the office or make arrangements with another salesperson to cover the floor during those hours.
FNMA (Fannie Mae) -- A private corporation dealing in the purchase of first mortgages at a discount.
FNMA Buydown -- FNMA (Federal National Mortgage Association) accepts loans containing a buy down provision on single family residential, owner occupied properties. A prepayment (points) will buy a lower rate of interest during the first one to five years of the loan. Restrictions apply to the amount of the buydown and rise in payment amount as the loan progresses.
Forced Sale -- A sale which is not the voluntary act of the owner, such as to satisfy a debt, whether a mortgage, judgment, etc. The selling price of such a sale would not be considered market value.
Foreclosure Sale -- a sale of property used as security for a debt, to satisfy said debt.
Fraud -- A deception, intended to wrongfully obtain money or property from the reliance of another on the deceptive statements or acts, believing them to be true.
Free and Clear -- Real property against which there are no liens, especially voluntary liens (mortgages).
Frontage -- The linear measurement along the front of a parcel, that is, the portion facing a road, waterway, walkway, etc. that would be considered the most valuable measurement of the property.
Fully Amortizing Loan -- A loan of equal, regular payments, which cause the principal and interest to be completely paid by the due date.
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