Glossary F

Fair Credit Reporting Act

A federal law that, among other things, gives you the right to see your credit reports from credit reporting agencies, and allows you to examine and correct information.

Fair Housing Act

A Federal law that prohibits discrimination in the sale, rental, and financing of housing on the basis of race, color, national origin, religion, sex, family status, or disability.

Family of Funds

A mutual fund company offering funds with many different objectives. A mutual fund family may offer several types of stock, bond and money market funds and allow free switching among their funds.

Fannie Mae

The Federal National Mortgage Association (FNMA) - a privately-held corporation created by Congress to help make mortgages more available and more affordable. Fannie Mae purchases and sells mortgages to and from lenders on the secondary mortgage market, and is the nation's largest source of home mortgage funding.

FED Funds Rate

The interest rate banks charge one another for overnight loans.

Federal Housing Administration (FHA)

U.S. agency that sets standards for underwriting mortgages and insures residential mortgage loans from private lenders. A division of the Department of Housing and Urban Development (HUD).

Federal Housing Administration (FHA) Mortgage

An FHA-insured and guaranteed mortgage loan designed to make purchasing a home more affordable, especially for the first-time homebuyer. FHA loans feature lower down payments and higher qualifying ratios than most conventional mortgages. There are some limits to the amount of money that can be borrowed.

FGIC Financial Guaranty Insurance Company

An insurance company specializing in municipal bond insurance. FGIC is wholly owned by General Electric. Bonds insured by FGIC are eligible for Triple-A ratings by Moody's, S&P and Fitch.

Fill or Kill (FOK)

The term used for a buy or sell order for a specified quantity and duration that requires the entire order to be executed in its entirety immediately, though not necessarily at one price. If the entire order is not executed immediately, then it would be cancelled. This differs from an Immediate or Cancel (IOC) order in that a FOK order must be executed in its entirety, while an IOC order can have partial executions. See Also: Immediate or Cancel.

Financial Services Funds

A financial services mutual funds seeks capital appreciation by investing in equity securities of companies engaged in providing financial services. Typically, securities are from commercial banks, S&Ls, finance companies, securities brokerages, investment managers, insurance companies, and leasing companies.

Firm Offerings

These offerings are available for execution at the quoted price and quantity, usually for a limited period of time.

First Coupon

The initial interest payment, calculated from the dated date. Subsequent coupons are paid every six months, unless noted otherwise.

First Mortgage

A mortgage that is the primary lien on a property, and is the first to be paid.

Fitch IBCA, Inc.

An independent company which rates the creditworthiness of issuers.

Fixed Income

A security that pays a fixed rate of return. Generally refers to government, corporate, or municipal bonds which pay a fixed rate of interest until the bonds mature, and to preferred stock, paying a dividend.

Fixed Interest Rate

An interest rate that does not change for the entire term of the loan.

Fixed Rate

An interest rate on a bond which is fixed for the life of the bond. See also Variable Rate.

Flat

Bonds trading without accrued interest. The seller of a bond that trades flat will not receive accrued interest.

Float

The number of shares available for trading by the public, as opposed to those held closely by corporate insiders and other large investors.

Floating-Rate CMO

A CMO tranche which pays an adjustable rate of interest tied to a representative interest rate index such as the London Interbank Offered Rate (LIBOR), the Constant Maturity Treasury (CMT), or the Cost of Funds Index (COFI).

Flood Insurance -Special hazard coverage from a reputable flood insurance provider

required for properties located in specially designated flood hazard areas, but generally recommended for all properties.

Floor

The lower limit for the interest rate on an adjustable-rate loan or security.

Foreclosure

A legal proceeding in which the lender takes possession of a property and sells it at public auction if the homeowner neglects to make mortgage payments.

Freddie Mac -The Federal Home Loan Mortgage Corporation (FHLMC)

a stockholder-owned corporation created by Congress that buys mortgages from lenders and resells them as securities on the secondary mortgage market. Considered a sister agency - and competitor - to Fannie Mae.

Front-End Load

A one time sales charge, assessed at the time of a mutual fund purchase. Large purchases may qualify for discounts of this fee. See also Breakpoints.

FSA Financial Security Assurance

An insurance company specializing in municipal bond insurance. FSA is owned primarily by the public (approx. 42%) and U.S. West (approx. 40%). The stock is traded on the NYSE (FSA). Bonds insured by FSA are eligible for Triple-A ratings by Moody's and S&P. They have not applied for a Fitch rating.

Fund Inception

The date a mutual fund commenced operations.