Freddie Mac this afternoon released its single-family seller/servicer guide bulletin where the GSE announced its changes to its Freddie Mac Relief Refinance Mortgage – Same Servicer and Relief Refinance Mortgage – Open Access offerings.
The GSE said that a part of these offerings are the agency's business implementation of the Home Affordable Refinance Program or the HARP.
Fannie Mae also released its own version. For the a copy of the Fannie bulletin, please click this link.
Wells Fargo analysts summarized the key features for same-seller greater-than-80% LTV loans. These are: the extension of the program to Dec. 31, 2013; allowing one 30-dpd in the past 12 months provided that the delinquency was not in the past six months; removing the LTV ratio limit of 125% for fixed-rate mortgages; and adding specific requirements related to the solicitation, advertising and other communications to borrowers that allow direct solicitation of loans owned or securitized by Freddie Mac.
On Oct. 24, the Federal Housing Finance Agency (FHFA), along with Freddie Mac and Fannie Mae, announced changes to the HARP. This was the administration's way to attract more eligible borrowers to benefit from refinancing their mortgages. The just-announced program enhancements were developed at FHFA’s direction. Lenders, mortgage insurers and other industry participants also provided their input.
"These changes mark another step on the road to recovery for the nation’s housing market and underscore Freddie Mac’s vital role in making affordable mortgage financing available to America’s homeowners," Freddie Mac said in the bulletin.
For a copy of the entire bulletin, please click here.
MBS analyst Anish Lohokare from BNP Paribas gave his initial thoughts on the Freddie Mac changes. He said that for those trying to do a same servicer >80 LTV refinancing, rep and warranty relief is only based on the 'eligibility requirements' of the HARP borrower.
Fannie Mae's version gives underwriting relief and possibly appraisal relief if its automated model is used. This Fannie Mae relief item has existed since the HARP was started. For those that are trying to get a <80 LTV refinancing (current LTV), no rep and warranty relief is provided.
Freddie Mac no longer permits any other automated valuation model aside from Home Value Explorer (HVE) and HVE validity is reduced to 120 days from 180 days.
For cross servicer refinancing, the rep and warranty is not waived. Although this was expected, there was previously the possibility of a waiver in exchange for a fee, which didn't happen, Lohokare noted. There is nothing new in terms of mortgage insurance and second lien issues.