Freddie Mac has issued the following Single Family Seller/Servicer Guide Update regarding Guide Bulletin 2009-15

Today’s Single-Family Seller/Servicer Guide (Guide) Bulletin 2009-15 announces new updates to our requirements for the Freddie Mac Relief Refinance MortgageSM and also provides detailed requirements for the changes to Relief Refinance Mortgages that we previewed on June 5, including introduction of the Relief Refinance Mortgage – Open Access option.

Promoting sustainable homeownership opportunities for the nation’s families is at the core of our work to implement the Making Home Affordable Program. By allowing the Relief Refinance Mortgage – Open Access to be originated by any Freddie Mac-approved Seller/Servicer we are expanding availability of refinancing opportunities in the market through the federal Home Affordable Refinance and providing borrowers with more choices during this critical time.

It is important that you carefully review today’s Guide Bulletin and the updated Guide Exhibit 19, Postsettlement Delivery Fees, to prepare for the changes we are announcing today.

Updates to Requirements for All Relief Refinance Mortgages

Today’s Guide Bulletin provides details on recently previewed and new updates to our requirements for all Relief Refinance Mortgages.

Unless otherwise specified below, the following changes apply to Relief Refinance Mortgages – Same Servicer, effective for Freddie Mac settlements on or after September 1, 2009, and for Relief Refinance Mortgages – Open Access, effective for Freddie Mac settlements on or after October 1, 2009. 

• New, not previously previewed changes in today’s Guide Bulletin include:

  • Permitting junior liens currently serviced by the Seller originating the Relief Refinance Mortgage to be refinanced simultaneously with the Relief Refinance Mortgage subject to certain conditions, including subordinating the junior lien to the new refinance mortgage. Please note this change for the Same Servicer option is effective immediately.

• Recently previewed changes in today’s Guide Bulletin include:

  • Allowing the lesser of 4 percent of the current unpaid principal balance of the mortgage being refinanced or $5,000 of closing costs, financing costs and prepaids/escrows to be rolled into the loan amount of the Relief Refinance Mortgage. Cash back to the borrower may not exceed $250.
    
  • Requiring all postsettlement delivery fees from Guide Exhibit 19, including a new Mortgages With High LTV Ratios delivery fee for mortgages with LTV ratios greater than 95 percent, to be assessed as applicable.

The total of all delivery fees will be capped at 200 basis points and any deductions will be reflected in your monthly invoice under the fee name Relief Refinance Cap Deduction. Please note:

• Net delivery fees and credits will be reflected in the selling system’s Net Price functionality for Relief Refinance Mortgages that are sold for cash.
• Relief Refinance Mortgages – Same Servicer are exempt from all A-minus delivery fees in the CS/LTV Delivery Fees (“A-Minus Fees”) – Non-LP Mortgages delivery fee grid.
• Relief Refinance Mortgages under both the Same Servicer and Open Access options are exempt from the Flexible Mortgage Insurance Options delivery fees.

We have also updated our Relief Refinance Mortgage – Same Servicer delivery requirements for mortgages with life of loan recourse and indemnification. Effective September 1, 2009, you must deliver the following special characteristic codes (SCCs) to help ensure that Relief Refinance Mortgages – Same Servicer with life of loan recourse or indemnification will not be assessed delivery fees other than the Market Condition delivery fee:

• SCC 001 when the mortgage being refinanced has life of loan recourse.
• SCC 033 when the mortgage being refinanced has life of loan indemnification.

Requirements for Relief Refinance Mortgages – Open Access

Today’s Guide Bulletin also highlights key requirements for the Relief Refinance Mortgage – Open Access, which we previewed on June 5. Complete requirements can be found in our new Guide Chapter B24.

Like the Same Servicer option, to be eligible for the Relief Refinance Mortgage – Open Access, the mortgage being refinanced must be owned or securitized by Freddie Mac and the Relief Refinance Mortgage must improve the borrower’s position.

The Relief Refinance Mortgage – Open Access allows the refinance mortgage to be originated by any Freddie Mac-approved Seller/Servicer, even if the originator is not the servicer of record for the mortgage being refinanced. With this expanded eligibility there are several key differences to our requirements for the Open Access option, including:

• Requiring the refinance mortgage to be fully underwritten and submitted to Loan Prospector®. With full underwriting, you are not required to retain any of the original representations and warranties from the mortgage being refinanced.
• Allowing the mortgage being refinanced and the Relief Refinance Mortgage – Open Access to have a different occupancy type. Mortgages secured by 1- to 4-unit primary residences, second homes, or 1- to 4-unit investment properties are eligible for the Open Access option.
• Requiring a full interior/exterior appraisal of the mortgaged premises. Sellers are required to provide certain representations and warranties related to the appraisal, and must represent and warrant the value, condition, and marketability of the property securing the refinance mortgage. Use of Home Value Explorer® or other automated valuation models is not permitted.

To be eligible for sale to Freddie Mac, Relief Refinance Mortgages – Open Access must have note dates on or after October 1, 2009, and on or before June 10, 2010. Additionally, these mortgages must have Freddie Mac settlement dates on or after October 1, 2009.

Loan Prospector will be updated on October 1, 2009, to assess Relief Refinance Mortgages – Open Access. For eligible mortgages, the Loan Prospector Feedback Certificate will provide the Freddie Mac loan number, mortgage insurance certificate number, percentage of mortgage insurance loss coverage, and Mortgage Insurer name, as applicable. Please note that mortgages with credit enhancements other than primary mortgage insurance are ineligible for the Relief Refinance Mortgage – Open Access.

Relief Refinance Mortgages – Open Access must be sold through the selling system and you will be required to deliver new SCC H08, Freddie Mac Relief Refinance Mortgage – Open Access, as well as all other applicable SCCs.

Terms and Conditions for Use of Home Value Explorer Data

We are also updating the Guide to provide terms and conditions for use of Home Value Explorer data you receive directly from Freddie Mac, effective on or after June 26, 2009.

Get More Information

For additional information on today’s announcement please use the resources listed below:

• Read Guide Bulletin 2009-15.
• Review the updated Guide Exhibit 19.
• View Relief Refinance Mortgage fact sheets on our Web site.
• Review our Recent Credit and Pricing Changes At-a-Glance.
• Visit the Learning Center for courses and educational resources on the changes announced today.

As always, contact your Freddie Mac representative or call 800-FREDDIE if you have questions about the information in today’s Guide Bulletin.

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