Back in April, President Obama announced the Making Home Affordable plan. This plan was designed to help people in Colorado (and across the US) refinance their home or modify their mortgage and was fairly comprehensive.
Many people who wanted to refinance under the Making Home Affordable plan quickly found out that depending on who owned their current loan, they may or may not have been able to go to any lender they wanted. When it was announced, if Fannie Mae owned your mortgage, you could refinance under the Making Home Affordable plan with any Fannie Mae approved lender.
But if Freddie Mac owned your mortgage, you were required to go through your current servicer to refinance your mortgage.
Until now.
Recently, Freddie Mac has announced that anyone who has a mortgage owned by Freddie Mac can now use whatever Freddie Mac approved lender that they want when refinancing their home under the Making Home Affordable plan. They also released the following guidelines.
Key highlight of the announcement include:
- Borrowers can continue to work with their existing servicer to refinance their mortgage. In the vast majority of these cases, the current servicer will not have to re-underwrite the borrower.
- If the borrower chooses to work with another Freddie Mac-affiliated lender, the mortgage will need to be re-underwritten.
- Freddie Mac will allow the lesser of 4 percent of the new refinance mortgage amount or $5,000 of closing costs, financing costs and prepaids/escrows to be rolled into the new refinance mortgage.
- Freddie Mac’s standard post settlement delivery fees, up to a maximum of 2 percent, will apply to the Relief Refinance Program.
According to Freddie Mac Executive Vice President Don Bisenius:
“We are responding to consumers’ desires to have more refinancing options. As an added benefit, we are expanding the program and providing greater flexibility in financing closing costs. Freddie Mac is committed to doing everything we can to bring the benefits of the Administration’s Making Home Affordable program to as many borrowers as possible.”
This announcement is good news for anyone who has a mortgage owned by Freddie Mac. Although you can now use whatever Freddie Mac approved lender that you would like, keep in mind that should you choose to work with a lender other than your current servicer, it will be more difficult to get your refinance done — although not impossible as it was before. This is good news to anyone who has received poor service from their current lender because now they have choices of what lender to use who can help you get your loan done.
Hurry before Colorado mortgage rates go up!
