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Freddie Opens Low LTVs to Streamline Refis

Freddie Mac is extending its streamline refinancing program to mortgages with loan-to-value ratios of 80% or less, bringing its Home Affordable Refinancing Program in line with Fannie Mae’s.

The GSE said the change will “eliminate many of the lender’s selling representation and warranty responsibilities on the original loans being refinanced, regardless of the LTV.”

Freddie will release the details of this change in mid-September. The agency will start taking delivery of these low LTV refinancings on Jan. 1, 2013.

The GSE regulator noted that this change will align Freddie’s policies with those of Fannie for refinancing certain mortgages with LTV ratios of less than 80%.

Originally, the HARP program was geared to high LTV and underwater loans when it was first rolled out. But Fannie also provided access to streamline refinancings for certain borrowers with LTVs below 80%.

Freddie also said Tuesday that is considering other HARP 2.0 changes that will make it easier for lenders to refinance loans that are serviced by other lenders, according to Freddie senior vice president Paul Mullings.

"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,” Mullings said.

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