When the Making Home Affordable plan details were announced in April, many people in Utah started wondering if it was time to refinance. Due to the relaxed guidelines of the Obama refinance as it has become known, there was quite a bit of confusion.
If you live in Utah and you are interested in refinancing your home under the new Making Home Affordable guidelines, you first had to find out if your loan is owned by Freddie Mac or Fannie Mae – because depending on who your loan is owned by, different rules apply.
Until now!
Yesterday, Freddie Mac announced that they were relaxing their stance on these Obama refinances and will now allow people to use any Freddie Mac lender they choose – whereas before they were required to go with their current lender.
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.”
If your loan is owned by Freddie Mac and you decide to work with a lender other than your current servicer, it will not be as easy as if you work with your current servicer – although as a result of the announcement, it is now possible to do.
Hurry before mortgage rates go up!
