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Relief Refinance℠ Mortgage

Freddie Mac has rolled out their newest program, Relief Refinance℠ Mortgage, in support of Making Home Affordable. The intention of Relief Refinance℠ Mortgage is to improve the mortgage financing terms for borrowers who would like to refinance, but cannot due to the decline in the value of their property or increased scrutiny by mortgage lenders.

In order to qualify under Relief Refinance℠ Mortgage, borrowers must be current on their monthly mortgage payments.

Advantages of Relief Refinance℠ Mortgage include:

  • Maximum loan-to-value (LTV) of 105%
  • No maximum TLTV/HTLTV
  • No post-settlement fees (except for the Market Condition delivery fee)
  • Mortgage insurance not required (for certain loans)
  • Simplified appraisal requirements
  • Reduced borrower eligibility requirements

Making refinancing as affordable as possible is Freddie Mac's objective with Relief Refinance℠ Mortgage. The waiving of all post-settlement fees (except for the Market Condition delivery fee) is testimony to their goal. The end result of putting homeowners in a better position for long-term homeownership is evident.

Stronger Financial Position

In addition, Relief Refinance℠ Mortgage requires mortgage lenders put borrowers in an improved financial position in one of three ways:

  • Reduce the interest rate on the first mortgage
  • Reduced amortization period on the first mortgage
  • Adjustable-rate mortgages (ARMs), Initial Interest or balloon mortgages to be replaced with a fixed-rate mortgage

Relief Refinance℠ Mortgage eligibility requires borrowers to have no late mortgage payments of at least 30 days in the past 12 months. Furthermore, Relief Refinance℠ Mortgage stipulates that Freddie Mac be the current mortgage owner, as well as the servicer of the existing mortgage to be the same for the refinance.

Secondary Financing and Mortgage Insurance

Existing subordinate financing is required to either be paid off outside of closing or re-subordinated to the new first mortgage loan. Because there is no limit to the TLTV/HTLTV, Relief Refinance℠ Mortgage makes it easier for borrowers to refinance.

Relief Refinance℠ Mortgage regulates the necessity of private mortgage insurance (PMI). Because property values have depreciated to such a large extent, PMI will not be required on refinanced loans through Relief Refinance℠ Mortgage in cases which the existing loan does not require mortgage insurance. However, if the existing mortgage currently has PMI, the PMI must be transferred to the new mortgage. The existing mortgage insurance certificate and percentage of coverage are to be used for the new mortgage.

Qualifying

Under Relief Refinance℠ Mortgage, as long as the borrower's principal and interest payment is not increased by more than 20%, borrowers do not have to be re-qualified. If the principal and interest payment does increase by more than 20%, Relief Refinance℠ Mortgage mandates the following:

  • Minimum Indicator Score of 620
  • Maximum debt-to-income (DTI) ratio of 45%
  • Streamlined Accept documentation for employment and income

Property Values

With the use of Home Value Explorer (HVE), Relief Refinance℠ Mortgage allows estimated property values for 1-unit properties. HVE is statistically based, providing value estimates for properties in all 50 states and Washington, D.C.

Note: Relief Refinance℠ Mortgage program is not same as Fannie Mae's DU ReFi Plus. Visit Du Refi Plus section or learn about DuReFi Plus.

Call a Total Mortgage expert now at 877-868-2503 to find out how we can customize a mortgage loan with some of the lowest current mortgage rates for you.

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