In reaction to the Obama administration's foreclosure prevention plan, Fannie Mae has extended its suspension of all eviction proceedings through March 31, and Freddie Mac says it is suspending foreclosure sales on mortgages eligible for the Home Affordable Modification program.
Fannie has issued special foreclosure sale requirements in response to the Making Home Affordable program. A foreclosure sale may not occur on any Fannie Mae loan until the loan servicer verifies that the borrower is ineligible for a Home Affordable Modification and all other foreclosure prevention alternatives have been exhausted.
Freddie Mac has instructed its servicers not to complete a foreclosure sale on a mortgage eligible for the program unless they completed their effort to contact the borrower and either the borrower did not respond or lacked the capacity or willingness to participate in the Home Affordable Modification program or any other Freddie Mac workout program.
Fannie Mae has additionally announced that, beginning in April, its Desktop Underwriter platform will be updated to reflect the government-sponsored enterprise's (GSE) role in Home Affordable Refinance and to streamline processing. Desktop Underwriter users will be able to process an application to refinance any existing Fannie Mae loan, allowing for greater lender origination capacity and easier refinancing for borrowers, Fannie Mae says.
Freddie Mac has similarly introduced its Relief Refinance Mortgage initiative designed to assist borrowers who are current on their mortgage payments but who would benefit from refinancing into mortgages with terms that better position them for long-term homeownership.
Eligible borrowers can use Relief Refinance Mortgages to improve their position for long-term homeownership success by reducing their current mortgage interest rate or shortening the amortization term. Similarly, the Relief Refinance Mortgage can be used to replace an adjustable rate mortgage, an Initial Interest Mortgage or balloon/reset mortgage with a 15-, 20- or 30-year fixed-rate mortgage, Freddie Mac says.
Freddie Mac is encouraging lenders to use its Home Value Explorer automated valuation model when applicable. Lenders using HVE will not be required to provide the standard representations and warranties on the property's value, condition and marketability.
SOURCES: Fannie Mae, Freddie Mac