With today’s Single-Family Seller/Servicer Guide (Guide) Bulletin 2009-20, we are reinforcing our commitment to the success of the federal Making Home Affordable Program and expanding our efforts to help ensure that mortgage financing remains available and affordable by:

• Providing detailed requirements for recently previewed and new changes for Relief Refinance MortgagesSM with LTV ratios greater than 105 percent and less than or equal to 125 percent, including expanding the reduced term incentive to cover a broader range of shorter term mortgages.
• Expanding sale options for Relief Refinance Mortgages – Same Servicer with LTV ratios less than or equal to 105 percent to provide added flexibility for Seller/Servicers that traditionally sell mortgages through our servicing-released sales process.
• Expanding the Number of Units delivery fee grid and adding new delivery fee rates for eligible mortgages secured by 3- to 4-unit properties to reflect the higher LTV ratios permitted for Relief Refinance Mortgages.

Allowing Relief Refinance Mortgages with LTV ratios up to 125 percent, coupled with our recent introduction of the Relief Refinance Mortgage – Open Access, will help you to reach more qualified borrowers with refinancing options that provide greater stability for the long term.

Today, we also are providing important reminders about our delivery requirements for Relief Refinance Mortgages – Same Servicer. Please carefully review this information to ensure that you accurately deliver these mortgages to us.

Relief Refinance Mortgages With LTV Ratios Greater Than 105 Percent

The new and recently previewed changes to our requirements for Relief Refinance Mortgages with LTV ratios greater than 105 percent and less than or equal to 125 percent are effective for:

• Relief Refinance Mortgages – Same Servicer with Freddie Mac settlement dates on or after October 1, 2009.
• Relief Refinance Mortgages – Open Access for submissions to Loan Prospector® on or after October 1, 2009, and Freddie Mac settlement dates on or after October 1, 2009.

With today’s Guide Bulletin 2009-20, we are providing the following detailed requirements for all Relief Refinance Mortgages with LTV ratios greater than 105 percent and less than or equal to 125 percent:

• Expanding the reduced term incentive of 50 basis points for qualified borrowers if:
  • The term of the mortgage being refinanced is 30 years or greater.
  • The term of the Relief Refinance Mortgage is greater than 15 years and less than or equal to 25 years.

  When this incentive is applied, the total of all delivery fees will be capped at 150 basis points, which will be reflected in your monthly Seller Invoice or in the net price for mortgages you sell to Freddie Mac for cash through the selling system.

• Requiring that Relief Refinance Mortgages with these higher LTV ratios be fixed-rate mortgages only. These mortgages are eligible for sale through the selling system under our Fixed-Rate Cash and Fixed-Rate Guarantor executions.
• Updating the Mortgages With High LTV Ratios delivery fee grid to reflect a 200 basis point delivery fee rate for Relief Refinance Mortgages with LTV ratios greater than 105 percent.
• Requiring fixed-rate Relief Refinance Mortgages with LTV ratios greater than 105 percent to be pooled separately in PC pools comprised entirely of Relief Refinance Mortgages with LTV ratios greater than 105 percent. These PC pools are not eligible for sale in the TBA market.
• Applying a cash adjustor to all Relief Refinance Mortgages with LTV ratios greater than 105 percent that are sold to Freddie Mac for cash. Because these mortgages are not TBA-eligible at this time, the cash adjustor will be applied in order to reflect current market pricing.   

The cash adjustor will change from time to time at Freddie Mac’s discretion. The cash adjustor will be determined for a particular mortgage as of the commitment “accept” date and be reflected in the cash price shown in the selling system once you allocate mortgages to a contract. Since the cash adjustor is not a delivery fee, it is not subject to our Relief Refinance Mortgages delivery fee cap.

To obtain cash adjustor information for your commitment, the most current cash adjustor values will be available to you through a recorded message on our customer service line, 800-FREDDIE, beginning on August 1. When calling, simply enter your nine-digit Seller/Servicer number, select Option One for system status and then Option Three for the cash adjustor values.

You will be able to take out fixed-rate cash commitments for fixed-rate Relief Refinance Mortgages with LTV ratios greater than 105 percent on or after August 1, 2009, for Freddie Mac contract allocations and settlements on or after October 1, 2009. Please note that Fixed-Rate Guarantor commitments may be taken out on or after October 1, 2009.

Additional Updates to Relief Refinance Mortgages

Today’s Guide Bulletin also announces that we are:

• Expanding our sale options to immediately allow you to sell Relief Refinance Mortgages – Same Servicer with LTV ratios less than or equal to 105 percent to Freddie Mac servicing-released. Additionally, beginning on October 1, 2009, you will be able to sell Relief Refinance Mortgages – Open Access with LTV ratios less than or equal to 105 percent through our servicing-released sales process as well.
• Expanding the Number of Units delivery fee grid and adding new delivery fee rates as noted below for eligible mortgages secured by 3- to 4-unit properties to reflect the higher LTV ratios permitted for Relief Refinance Mortgages, effective for Freddie Mac settlements on or after September 1, 2009:
  
  • 150 basis points for LTV ratios greater than 80 percent and less than or equal to 85 percent
  • 200 basis points for LTV ratios greater than 85 percent and less than or equal to 90 percent
  • 200 basis points for LTV ratios greater than 90 percent

Important Delivery Reminders for Relief Refinance Mortgages – Same Servicer

With this e-mail, we are reminding you about several key delivery requirements for Relief Refinance Mortgages – Same Servicer, including that you must:

• Deliver the exact 9-digit Freddie Mac loan number of the mortgage being refinanced with the Relief Refinance Mortgage – Same Servicer in the associated Freddie Mac loan number field on Form 11, Mortgage Submission Schedule, or 13SF, Mortgage Submission Voucher. Any additional information, such as trailing zeros, will invalidate the match required to determine eligibility.
• Deliver the MI code that identifies the Freddie Mac-approved Mortgage Insurer that is insuring the Relief Refinance Mortgage – Same Servicer, and complete all required MI fields, including:
  
  • MI certificate number of the existing mortgage insurance policy transferred to the Relief Refinance Mortgage or the replacement certificate number provided by the Mortgage Insurer.
  • Percentage of loss coverage being transferred.
• Deliver the following special characteristic codes (SCCs):
  
  • 007 – No cash-out refinance mortgage
  • H06 – Relief Refinance Mortgage – Same Servicer
  • H03 – Home Value Explorer® point value estimate used to determine property value, if applicable

For complete delivery requirements for Relief Refinance Mortgages – Same Servicer, please review Guide Chapter A24.4.

Get More Information

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

• Read Guide Bulletin 2009-20.
• Review the updated Guide Exhibit 19.
• View Relief Refinance Mortgage fact sheets on our Web site.
• 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. 

About Safeguard
Safeguard Properties is the largest privately held field services company in the country. Located in Cleveland, Ohio and founded in 1990 by Robert Klein, Safeguard has grown from a regional preservation company with a few employees and a handful of contractors performing services in the Midwest, to a national company with over 700 employees. Safeguard is supported by a nationwide network of subcontractors able to perform any requested superintendence, preservation, and maintenance functions, as well as numerous ancillary services in the U.S., the Virgin Islands, and Puerto Rico.