Freddie Mac has announced plans to enhance the Relief Refinance Mortgage Program by aligning requirements for mortgages with loan-to-value (LTV) ratios that are equal to or less than 80% with those for mortgages with LTV ratios greater than 80%.
According to Freddie Mac, the alignment will eliminate many of the lender's selling representation and warranty responsibilities on the original loans being refinanced, regardless of the borrower's loan-to-value ratio. Details are scheduled to be announced by mid-September, so lenders can start taking applications as soon as possible thereafter for loans to be delivered as early as Jan. 1, 2013.
Freddie Mac adds that it is further evaluating the Relief Refinance Mortgage Program by specifically focusing on its Open Access offering and determining the best approach to maximize the program's reach to eligible borrowers and assist lenders in managing capacity. The Open Access option enables eligible borrowers with Freddie Mac mortgages to apply for Relief Refinance mortgages through lenders other than their current servicer.
‘Once implemented, the changes will give lenders a new measure of certainty and ease when they help borrowers with Freddie Mac-owned or -guaranteed mortgages take advantage of today's historically low mortgage rates,’ says Paul Mullings, senior vice president and interim head of single-family operations at Freddie Mac.