Loan Modification

Stay or Go? Freddie Mac changes offer homeowners more refinancing choices

By Jay Hammond

?We are responding to consumers’ desires to have more refinancing options,? said Freddie Mac Executive Vice President Don Bisenius. ?As an added benefit, we are expanding the program and providing greater flexibility in financing closing costs. Freddie Mac is committed to doing everything we can to bring the benefits of the Administration’s Making Home Affordable program to as many borrowers as possible.?

In changes announced last week, Freddie Mac aims to assist borrowers current on their mortgage payments who would benefit from refinancing into mortgage with better terms that will put them in a better position for long-term homeownership.  The changes, when they become available, would allow borrowers to refinance their Freddie Mac-owned or guaranteed mortgage with any lender affiliated with Freddie Mac. In addition, Freddie Mac will allow the lesser of 4 percent of the new refinance mortgage amount or $5,000 of closing costs, financing costs and prepaid/escrows to be rolled into the new refinance mortgage. Freddie Mac’s standard post-settlement delivery fees, up to a maximum of 2 percent, will apply to the Relief Refinance Program.

Borrowers can continue to work with their existing servicer to refinance the mortgage. In the majority of cases, if a borrower works with their current servicer, the borrower will not need to be re-underwritten. If the borrower chooses to work with another Freddie Mac-affiliated lender, the mortgage will need to be re-underwritten.

Borrowers should complete the online form at https://www.freddiemac.com/corporate/ to determine if Freddie Mac owns their mortgage.

In other news, Freddie Mac also attempted last week to reduce the organization’s short-tern debt by buying back $30 billion of its debt. According to the New York Times DealBook, it would be the largest tender offer in the organization’s history. The Home Builders blog reports that Congressional hearings began last week on the future of both Freddie Mac and Fannie Mae after both companies reported losses during the first quarter. Both remain a critical concern for the federal government although mortgage rates, which have risen for two consecutive weeks are inspiring optimism in some quarters.

Full post as published by Blown Mortgage on June 08, 2009 (boomark / email).