Freddie Mac Relief Refinance (HARP) Mortgage SM
Transcript of Freddie Mac Relief Refinance (HARP) Mortgage SM
© Freddie Mac 2013 1
Freddie Mac Relief Refinance (HARP) MortgageSM
Overview for Housing CounselorsMarch 6, 2013
Robin Stout Migala
Freddie Mac Housing & Community Outreach
© Freddie Mac 2013
� Home Affordable Refinance Program
(Freddie Mac Relief Refinance Mortgage)
2
Implemented and further strengthened changes to our Freddie Mac Relief Refinance Mortgage offering in an effort
to attract more eligible borrowers who can benefit from refinancing their home
mortgages
http://www.freddiemac.com/sell/guide/bulletins/pdf/bll1122.pdf
http://www.freddiemac.com/sell/guide/bulletins/pdf/bll1219.pdf
http://www.freddiemac.com/singlefamily - then click on AllRegs
© Freddie Mac 2013 3
Home Affordable Refinance Program
General Eligibility for Relief Refinance (HARP) Mortgages
Self-Service Lookup tool: http://www.freddiemac.com
For Freddie Mac owned loans, the purchase date will be displayed on the
results page
� Freddie Mac initiatives for first lien, conventional mortgages that are currently owned by Freddie Mac, in whole or in part, or securitized by Freddie Mac
and
The mortgage being refinanced must have a Freddie Mac Settlement Date
on or before May 31, 2009.
© Freddie Mac 2013
Alternatives to Foreclosure Hierarchy
4
64.6 - Evaluation hierarchy, borrower solicitation and communication
HARP
Freddie Mac Standard
Modification
HAMP Modification
HAFA Short Sale
HAFA Deed-in-Lieu
Foreclosure
Freddie Mac Standard
Short Sale
Freddie Mac Deed-in-Lieu
Reinstatement and Relief Options
Freddie MacShort Payoff
HAFA Short Sale
Expired
December 31, 2012
Effective
November 1, 2012
HAFA Deed-in-Lieu
Freddie Mac Standard
Deed-in-Lieu
Effective
March 1, 2013
© Freddie Mac 2013
Relief Refinance (HARP) Mortgage Requirements
5
Same Servicer Open Access
Relief Refinance Mortgage
Guide Chapter
A24
Guide Chapter
B24
Relief Refinance Mortgages has been extended to December 31, 2013. To be eligible for refinancing under this offering, mortgages must have note dates on or before December 31, 2013
© Freddie Mac 2013
Home Affordable Refinance Program
Goals
� Help homeowners who are timely on their mortgage payments, but who are unable to refinance because they have little or no equity in their homes
� Enables homeowners to obtain a beneficial refinance, despite a decrease in home values
� Reduce monthly payments, where possible, for homeowners in order to help reduce foreclosures and stabilize communities
� Be an option for eligible homeowners to get into mortgages with more stable, more affordable payments
Expiration date of the program extendedto December 31, 2013.
*The Freddie Mac Relief Refinance MortgageSM includes Freddie Mac’s
implementation of HARP solutions.
6
© Freddie Mac 2013
Freddie Mac Relief Refinance (HARP) MortgageSM
Two Refinance Options:
7
Homeowner gets refinancing from current participating lender (to whom they make their mortgage payment) and who already has their files and documents
Homeowner gets refinancing from any participating Freddie Mac-approved lender that is offering the Relief Refinance Mortgage
› Relief RefinanceMortgage-Same Servicer
› Relief RefinanceMortgage-Open Access
• Simplified borrower re-qualification steps, unless the principal and interest payment goes up more than 20 percent
• No new appraisal is required, in certain cases
• Qualification/underwriting is necessary through Loan Prospector® automated underwriting service
• No new appraisal is required, in certain cases
Eligibility requirements vary based on these two options and the loan-to-value ratio of the new mortgage resulting from the refinance.
© Freddie Mac 2013
Survey Question
� Q: The HARP program was established for all first lien mortgages regardless of investor.
True or false?
8
� True – green check
� False – red X
© Freddie Mac 2013 9
Relief Refinance (HARP) Mortgage – What’s Changed
Option Revised Requirements Effective
Same Servicer and Open Access Reduced income/asset documentation and evaluation requirements when borrower is qualified for the new mortgage
Effective Now
Same Servicer Verify reserves equal to 12 monthly PITI payments instead of verifying source of income
Same Servicer When borrower is omitted from note, allow remaining borrowers to be re-qualified instead of providing evidence of past 12 months’ payments
Open Access No verification of condo project Freddie Mac eligibility (with certain exceptions)
© Freddie Mac 2013 8
Relief Refinance (HARP) Mortgage – What’s Changed
Option Revised Requirements Effective
Same Servicer and Open Access Aligned requirements for <80% LTV with those >80% LTV. Simplifies requirements
Application Received Date on and after
November 19, 2012
Same Servicer and Open Access Maximum allowable closing costs/prepaids lesser of 4% of UPB, or $5,000. Cash back limited to $250
Same Servicer New mortgage does not have to represent same occupancy as mortgage being refinanced
Same Servicer No verification of funds unless borrower is qualified for new mortgage (P&I increases more than 20%)
Same Servicer Aligned requirements for LTV ratios below, equal to, and above 80%. Seller is not required to represent and warrant that the mortgage being refinanced met Freddie Mac eligibility requirements, value, condition, and marketability of the Mortgaged Premises and certain fraud requirements
© Freddie Mac 2013 11
General Eligibility
� There is no maximum LTV/TLTV/HTLTV ratio for the existing mortgage
� If the new mortgage will be an ARM, the LTV is limited to 105%
� No delinquencies in the most recent six months. No more than one 30-day delinquency in the most recent 12 months on the mortgage being refinanced for Same Servicer.
� Manual underwriting only for Same Servicer
� Loan Prospector only for Open Access
� At least one borrower from the mortgage being refinanced must be retained
Freddie Mac Relief Refinance (HARP) MortgageSM
© Freddie Mac 2013 12
General Eligibility (cont’d)
� Credit score, documentation, and additional requirements apply if borrower’s P&I increases more than 20 percent for Same Servicer
� 1- to 4-unit primary residence, 1-unit second home, or a 1- to 4-unit investment property for all loans.
� The mortgage being refinanced and the Relief Refinance Mortgage – Same Servicer do not have to represent the same occupancy
� At least one borrower must have a verifiable source of income or have reserves equal to at least 12 monthly payments of PITI for Same Servicer.
Freddie Mac Relief Refinance (HARP) MortgageSM
© Freddie Mac 2013 13
The Relief Refinance Mortgage must result in one
of the following borrower benefits:
Borrower Benefit
Replacement of an adjustable-rate mortgage (ARM),
interest-only mortgage or a balloon/reset mortgage
with a fixed-rate, fully amortizing mortgage, or
A reduction in the interest rate of the first lien mortgage, or
A reduction in the amortization term of the
first lien mortgage
A reduction in the monthly principal and interest (P&I)
payment of the first lien mortgage, or
© Freddie Mac 2013
Survey Question
� Q: In order to be eligible for HARP, the borrower must not have been delinquent on the existing mortgage in the most recent six months. In addition, the borrower must not have more than two 30-day delinquencies in the most recent 12 months.
Is this correct?
�Yes – green check
�No – red X
14
© Freddie Mac 2013 15
Features of the New Mortgage
� Mortgage insurance not required if existing mortgage has no mortgage insurance and LTV ratio is >80% on new mortgage.
� Proceeds may be used to pay off the first mortgage, pay related closing costs, financing costs, and prepaids/escrows, and disburse cash out to the borrower not to exceed $250.
Freddie Mac Relief Refinance (HARP) MortgageSM
© Freddie Mac 2013 16
Freddie Mac Relief Refinance (HARP) MortgageSM
Lender Participation
Some lenders may choose not to offer these mortgages, or they may choose not to implement all of the flexibility available through the HARP component of the changes. However, Relief Refinance Mortgages sold to Freddie Mac at a minimum must meet our requirements.
© Freddie Mac 2013
HARP Participating Lender List
� Provides greater visibility for HARP lenders
� Helps borrowers easily identify participating HARP lenders
17
© Freddie Mac 2013
Bulletin 2012-24 – November 2, 2012 – Hurricane Sandy
� For Relief Refinance Mortgages secured by properties in areas affected by hurricanes or other natural disasters, a Freddie Mac Seller is not required to determine if an additional property inspection or a new appraisal is necessary after an initial property valuation has been relied on, provided that the mortgage meets the requirements of Guide Chapter 58, Property Insurance, and any private mortgage insurance company requirements.
� For mortgages that have application received dates on or before and note dates after November 1, 2012 and are secured by properties located in eligible Disaster Areas affected by Hurricane Sandy, the following temporaryrequirements apply:
» Property valuation documentation, including the estimate from Home Value Explorer® (HVE) or the new appraisal, as applicable, must be dated no more than 180 days before the note date.
» Any required underwriting documentation including but not limited to, Loan Prospector® Feedback Certificates, credit reports, verifications of income, employment and sources of funds, must be dated no more than 180 days before the note date, except that our existing requirements for verbal verifications of employment and verifications of existence of business continue to apply.
18
© Freddie Mac 2013 19
Freddie Mac Relief Refinance (HARP) MortgageSM
Resources for Housing Counselors
� Freddie Mac Loan Lookup –
https://ww3.freddiemac.com/corporate/
� Relief Refinance (Same Servicer) –
http://www.freddiemac.com/sell/factsheets/relief_refi_same_servicer.html
� Relief Refinance (Open Access) –
http://www.freddiemac.com/sell/factsheets/relief_refi_open_access.html
� HARP Fact Sheet for Housing Counselors -http://www.freddiemac.com/corporate/housingpros/pdf/Relief_Refinance_Mortgage_Housing_Counselor_Fact_Sheet.pdf
� 1-800-FREDDIE Option 2
© Freddie Mac 2013 20
Freddie Mac Relief Refinance (HARP) MortgageSM
Resources for Homeowners
� Home Affordable Refinance Program (HARP) Fact Sheet – Englishhttp://www.freddiemac.com/corporate/housingpros/pdf/relief_refi_consumer_fact_sheet.pdf
� Home Affordable Refinance Program (HARP) Fact Sheet – Spanishhttp://www.freddiemac.com/corporate/housingpros/pdf/relief_refi_consumer_fact_sheet_sp.pdf
© Freddie Mac 2013 21
Freddie Mac Relief Refinance (HARP) MortgageSM
Resources for Homeowners
� Borrower HARP Eligibility Tool –
http://www.freddiemac.com/avoidforeclosure/harp_eligibility.html
� HARP FAQs for Borrowers –
http://www.freddiemac.com/homeownership/educational/harp_faq.html
� General HARP Information for Borrowers –
http://www.freddiemac.com/avoidforeclosure/harp.html
� Participating Lenders (Open Access) –
http://www.freddiemac.com/avoidforeclosure/participating_lender_list.html
© Freddie Mac 2013 22
Questions?
Freddie Mac Relief Refinance (HARP) MortgageSM