Oaktree Funding Corporation

Transcription

1 Freddie Mac s Relief Refinance Open Access

2 Agenda What is Relief Refinance Mortgages Open Access? AUS and Qualifications FAQ s Questions 2

3 What is Relief Refinance Mortgages Open Access? The Freddie Mac Relief Refinance Mortgage SM Open Access supports the federal Making Home Affordable Program by helping borrowers who are making timely mortgage payments but have been unable to refinance due to declining home values. With this offering, you can refinance more borrowers, even if you re not currently servicing the mortgage. With flexibility that allows LTV ratios up to 105%, relief from standard mortgage insurance requirements, and the ability to submit through Loan Prospector, you can refinance more borrowers into mortgages that better position them for a successful long-term homeownership experience. A new program designed to reignite the mortgage industry by streamlining the refinance process for potentially millions of Americans. Freddie Mac has loosened the rules for homeowners seeking lower monthly payments. The ultimate objective of this program is to benefit borrowers. The Relief Refinance Mortgage must result in at least one of the following: Reduction in the interest rate of the first-lien mortgage. Replacement of an ARM, Initial Interest Mortgage (or any mortgage with an interest-only period) or a balloon/reset mortgage with a fixed-rate, fully amortizing mortgage. Reduction in the amortization term of the first-lien mortgage. 3 This change in standards applies only to loans that Freddie Mac currently owns or guarantees.

4 Available Terms Fixed Options: Conforming Limits 15 Yr Fixed Relief Refi - Open Access 30 Yr Fixed Relief Refi - Open Access Super Conforming Limits 15 Yr Fixed Super Conforming Relief Refi - Open Access 30 Yr Fixed Super Conforming Relief Refi - Open Access ARM Options: Conforming Limits 5/1 LIBOR Relief Refi - Open Access 7/1 LIBOR Relief Refi - Open Access Super Conforming Limits 5/1 LIBOR Super Conforming Relief Refi - Open Access 4

5 Transactions Types Rate and Term with proceeds only being used to: Pay off the first mortgage (amount includes the unpaid principal balance and accrued interest through the payoff date). The payoff amount can be rounded up to the nearest thousand. Pay the lesser of 4 percent of the current unpaid principal balance of the mortgage being refinanced or $5,000 in related closing costs, financing costs and prepaids/escrows. Funds available as a result of the rounding must be: Applied as a principal curtailment to the refinance mortgage and/or Disbursed as cash to the borrower not to exceed $250. The proceeds may not be used to pay off or pay down any secondary financing. Subordinate financing must re-subordinate Three (3) months seasoning of the existing mortgage is required, as determined by length of time from the Note date to application date Must demonstrate that Relief Refinance Mortgage- Open Access improves borrower s position as follows: Reducing interest rate Reducing amortization period Replacing ARM, IO or Balloon Product with a fully amortizing Fixed Rate Product Properties that have been listed for sale are eligible with the following restrictions: Property has been taken off the market on or before the application date. Borrower must sign an affidavit confirming occupancy, and that the home was not listed at time of application and is not listed at the time of funding.

6 Loans that may be Ineligible for Relief Refinance If the existing loan was originated under the following products, it is not eligible for the Relief Refinance Open Access program: Government Home Possible Mortgages submitted to Loan Prospector (LP) GM Family Relocation University of Pennsylvania GoFast LPMI Loans where the existing first mortgage was closed after May 31,2009 6

7 Occupancies Primary Residence Second Homes Investment Properties Note: Open Access may be refinanced as 1-4 Unit Primary Residence, Second Home or Investment Property, whether or not the mortgage being refinanced was underwritten and sold originally as a 1-4 Unit Primary Residence, Second Home or Investment Property mortgage. 7

8 Eligible Property Types 1-4 units PUD's Condo's No project review required for Condominium and PUD; however, satisfactory verification must be provided verifying subject project is not a Condo Hotel. Modular/ Pre-Cut Leasehold Estates 8

9 Eligible Borrowers Borrowers on existing mortgage must match borrowers on the new loan. EXCEPT AS FOLLOWS: Borrowers may be removed due to death or divorce provided: Obtain documentation of the death or divorce, and Obtain evidence that the remaining Borrower has been making the mortgage payments for the most recent 12 month period, or if the Mortgage is seasoned less than 12 months, since the Note Date of the existing mortgage. A borrower may not be added Permanent Resident Aliens Provide Alien Registration Card if borrower is not living in the U.S. Non-Permanent Resident Alien Must be a legal resident of the U.S. as evidenced by social security number Must be employed in the U.S. Tax Identification Number (TIN) is not acceptable 9

10 AUS and Qualifications

11 Borrower Qualification Must be submitted to Loan Prospector Select appropriate Offering Identifier (310) for Relief Refinance Open Access Alt 97 Initial Int ARM Initial Int 10/20 Fixed Initial Int 15/15 Fixed Initial Int ARM-10 Year IO Home Possible 97 Home Possible 3% Cash Home Possible NH 97 Home Possible NH Solution 3% Cash Relief Refinance Open Access 11

12 Borrower Qualification Must be submitted to Loan Prospector Purpose of Refinance select: No Cash-Out Refi 12

13 Loan Prospector and Relief Refinance Relief Refinance Mortgages Open Access with a risk class of Caution and A-minus eligible purchase eligibility message are not eligible. Noncredit payment references are prohibited and may not be used to establish an acceptable credit reputation. Manual underwriting is NOT permitted All loans must be designated as eligible by LP and the loan must be underwritten, closed and delivered according to the requirements on the feedback. 13

14 Borrower Qualification Loan Prospector Feedback Certificate will provide: Freddie Mac Loan Number on the existing Mortgage Mortgage Insurance Certificate Number and Mortgage Insurer Name, as applicable This information will only be provided when the Mortgage being refinanced is entered into Loan Prospector as a Relief Refinance Mortgage Open Access and receives a Risk Class of Accept, Caution or Caution eligible for A-minus 14 38

15 Borrower Qualification Loan Prospector Feedback Messages Loan Prospector Reminder on Manual Overlay for Eligibility Returned on all Relief Refinance-Open Access submissions LPN ZP Verify mortgage history of loan to be refinanced. Loan to be refinanced must not have been 30 or more days late in last 12 months or, if the mortgage is seasoned for less than 12 months, since the mortgage note date to be eligible for Relief Refinance-Open Access. Indicates for the Relief Refinance-Open Access loan, the user must verify the loan payment history and that loan payments have not been 30 days late within the last year

16 Borrower Qualification Loan Prospector Feedback Messages Ineligible messages ELV 63 Relief Refi-Open Access mortgages must match active FM loan. Indicates a Relief Refinance- Open Access submission with data that does not match the existing Freddie Mac loan, or the existing loan had a Freddie Mac settlement date after June 1, 2009, or the loan status is not active ELV 64 Existing FM loan Ineligible for Relief Refi- Open Access. Indicates a Relief Refinance- Open Access submission is ineligible due to a credit enhancement or the existing mortgage being refinanced is not an eligible loan type. 16

17 Borrower Qualification Excerpt Loan Prospector Feedback Certificate 17

18 Qualifying and Ratios Qualify at note rate. ARMs: Qualify at the greater of the Note Rate or Fully Indexed Rate Ratios: LP calculates and assesses the borrowers qualifying ratios; therefore, LP Accept decision has determined the borrowers qualifying ratios are acceptable. 18

19 Occupancy Primary Residence Second Home Relief Refinance Open Access SM Units 1-4 LTV w/o Secondary Financing 105% LTV with Secondary Financing Credit Score 105% N/A Investment Property Note: Maximum LTV/CLTV in West Virginia 100% (applies to all occupancy) 19

20 Underwriting Authority Delegated Eligible to underwrite or send to GMAC Bank Conditional Delegated Requires LP Accept recommendation Non-Delegated Submit to Contract Underwriting or GMAC Bank 20

21 Credit The borrower s credit score is acceptable if an LP Accept decision is received. The existing mortgage must be current. Regardless of LP decision, 0 x 30 in the last 12 months or, if the mortgage is seasoned < 12 months, since the Note Date. 21

22 Bankruptcy and Foreclosure Guidelines Measures by discharge or dismissal date For a previous foreclosure or conveyance of a deed-in-lieu of foreclosure, the new mortgage must: Comply with GMAC standard guidelines 22

23 Appraisals A new appraisal with an interior and exterior inspection must be obtained As of the Delivery Date of the Relief Refinance Mortgage Open Access, the value of the mortgaged premises must be at least equal to the value of the Mortgaged Premises as determined by the appraisal with the most recent effective date before the Delivery Date of the Relief Refinance Mortgage Open Access Note: Loans in West Virginia where the value is less than the loan amount are not eligible. 23

24 Mortgage Insurance If original transaction LTV was <80%, mortgage insurance is not required on the subject refinance. If the LTV of the existing mortgage being paid off was >80%, but mortgage insurance was subsequently cancelled or dropped and no mortgage insurance is in place on the loan at the time of the refinance, no mortgage insurance is required on the subject refinance. If the mortgage insurance on the original transaction was LPMI, it is not eligible under this program. 24

25 New Mortgage Insurance Requirements LTVs Terms < 20 Years Coverage Required 80.01%-85.00% 6% 85.01%-90.00% 12% 90.01%-95.00% 25% Term > 20 Years 80.01%-85.00% 12% 85.01%-90.00% 25% 90.01%-95.00% 30% Acceptable MI Companies for New Mortgage Insurance PMI MGIC UG Genworth 25

26 FAQ s Are increases to the borrowers payment permitted? Only if a more stable product (i.e. ARM to Fixed, IO to fully amortizing, shorter term, etc) is utilized Is there a way to determine if my borrowers loan is owned by Freddie? YES! Visit I ran my loan through LP and got the Open Access Feedback can I run my loan through DO/DU? NO! If you think your loan might be eligible for Open Access and you do not want it run it throughdofirst. do not allow it to be flipped to another AU. OR Simply choose a product OTHER than Relief Refinance We 26

27 Borrower Profile For borrowers who have experienced declining property values Borrowers must be current on their mortgage payments Payment history cannot have any 30 day or more late payments in the most recent 12 months 27

28 Key Features May be originated by any Freddie Macapproved Seller/Servicer Maximum LTV ratio up to 105 percent No maximum TLTV/HTLTV ratios Relief from standard mortgage insurance requirements Must be submitted to Loan Prospector 28