In April, the details of the Making Home Affordable plan were released and it was announced that there was a “refinance” portion to the plan and a “loan modification” portion to the plan.
The rules for refinancing depended on whether your loan was owned by Fannie Mae or Freddie Mac and we talked about how to tell if your loan was owned by Fannie Mae or Freddie Mac (see below).
At that point in time, if your loan was owned by Fannie Mae, you could use whatever lender you wanted to refinance your home under the Making Home Affordable plan (also known as the Obama Refinance). If your current mortgage was owned by Freddie Mac, the rules were that you had to use your current lender to refinance.
Freddie Mac has announced that you can now refinance under the Making Home Affordable guidelines with whoever you want, you no longer have to go through the lender that you are currently with.
Highlights of the announcement:
- You can work with your existing mortgage servicer to refinance your mortgage – and one benefit of working directly with your lender is that they will not have to re-underwrite your file.
- If you choose to work with a different lender, they will be required to re-underwrite your file.
- You can now roll in up to the lesser of 4 percent of the new refinance mortgage amount or $5,000 of closing costs, financing costs and prepaids/escrows.
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.”
Does this mean that Freddie Mac has made it easy to use whatever lender you want when trying to refinance your home under the Making Home Affordable plan?
But at least it is now possible.
Hurry before mortgage rates go up!