Relief Refinance℠ Mortgage

Along with Fannie Mae's DU Refi Plus™, Freddie Mac is introducing Relief Refinance℠ Mortgage. Both programs will play a key role in supporting the federal Making Home Affordable program. Effective April 1, 2009, Relief Refinance℠ Mortgage is intended to simplify the refinancing for borrowers who are up-to-date with their monthly mortgage payments, but are unable to due to property values declining and credit terms tightening. Relief Refinance℠ Mortgage will offer:

• No maximum LTV/TLTV/HTLTV ratios
• All post-settlement fees waived (except for the Market Condition delivery fee)
• Reprieve from private mortgage insurance requirements
• Appraisal requirements reduced
• Borrower eligibility requirements reduced

Freddie Mac's goal of putting borrowers in better position for long-term homeownership is simplified through Relief Refinance℠ Mortgage. By waiving all post-settlement fees (other than the Market Condition delivery fee), Freddie Mac is demonstrating their objective of making this refinance opportunity as affordable as possible.

To be eligible for Relief Refinance℠ Mortgage, borrowers must be current with their monthly mortgage payments, meaning no late payments of 30 days or more in the past 12 months. Unlike DU Refi Plus™, however, Relief Refinance℠ Mortgage not only requires Freddie Mac to be the current mortgage owner, but it also requires the servicer of the existing mortgage to be the same. In addition, the borrower's position must be improved by Relief Refinance℠ Mortgage in at least one of the following ways:

• Interest rate of the first mortgage to be reduced
• Amortization of the first mortgage to be reduced
• Replace an Initial Interest, ARM or balloon mortgage with a fixed-rate mortgage that will amortize fully

Relief Refinance℠ Mortgage mandates no new subordinate financing is allowed, even though there is no limit to the TLTV/HTLTV. Any existing second mortgage must be either paid off with money outside of closing or it has to be re-subordinated.

In regard to mortgage insurance, if the existing mortgage does not have mortgage insurance and the LTV has increased due to a declining property value, mortgage insurance will not be required on the new loan. However, if there is mortgage insurance on the existing mortgage, the mortgage insurance must be transferred (with the existing mortgage insurance certificate and percentage of coverage) to the new mortgage.

Borrowers do not have to be re-qualified under Relief Refinance℠ Mortgage as long as the principal and interest payment is not increased by more than 20%. If the new principal and interest increases by more than 20%, Relief Refinance℠ Mortgage will require:

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

Freddie Mac is permitting estimated property values for 1-unit properties with the use of Home Value Explorer (HVE). HVE is statistically based and provides value estimates for properties in America.

For more information, please visit Total Mortgage or call 1-888-868-2509.

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