Fannie Mae and Freddie Mac late Tuesday afternoon released a somewhat detailed bulletin on the underwriting guidelines for refinancing underwater borrowers with GSE loans, segmenting what’s allowable based on the LTV and if the product is being offered by the current servicer.
The points charged on these loans vary from 75 basis points to 200, depending on the LTV and whether it’s a 20- or 30-year loan.
Mortgage bankers pitching the ‘HARP 2.0’ refi program to current customers will no longer have to make representations and warranties to Fannie Mae and Freddie Mac if the LTV is north of 80%.
But to engage in such a refi the servicer must verify that at least one borrower whose name is on the loan has a source of income.
The Federal Housing Finance Agency also is allowing the GSEs to waive the appraisal and AVM requirement.
Under the new ‘Obama Refi’ program (as it is known) mortgage customers can submit applications beginning Dec. 1 and up until yearend 2013.
The refi effort is being carried out under the HARP program or what Freddie calls its ‘Relief Refinance Program.’ The LTV cap has been removed entirely. Previously it was set at 125%.
The guidelines are more liberal if the LTV is at least 80% and the current servicer is offering the program. Under this scenario a customer with a FICO score as low as 620 can be refinanced into a new GSE loan.
To see guideline details visit: http://www.freddiemac.com/sell/guide/bulletins/pdf/bll1122.pdf.
Daily Briefing | Tuesday, November 15, 2011
Congress Set to Approve Foreclosure Mitigation Program, Flood Insurance
House and Senate appropriators approved more funds for a foreclosure mitigation program and included another short-term extension of the National Flood Insurance Program in a spending bill expected to pass this week.
House and Senate Hike FHA Loan Limit GSEs Out in the Cold
House and Senate conferees have agreed to restore the $729,750 maximum loan limit for Federal Housing Administration-backed mortgages for two years but left the GSE cap unchanged.
FHA’s Capital Position Still in the Black But Barely
Despite falling house prices and rising claims, the Federal Housing Administration’s mortgage insurance fund clung to a slim capital ratio of 0.24% on its book-of-business for the year ending Sept. 30, compared to 0.5% a year ago, according to independent actuarial reports released Tuesday morning.
FHFA Moving Ahead with ‘Private’ Risk Sharing
The acting director of the Federal Housing Finance Agency told a Senate panel this morning that the agency is moving ahead with “private” risk sharing opportunities between Fannie Mae/Freddie Mac and firms outside of the government’s control.
Fees, Sale of Interest in Title Unit Boost Impac’s Profit
Impac Mortgage Holdings earned $3.1 million in the third quarter thanks to gains from the sale of a title insurance affiliate and fees garnered from mortgage and real estate services, which offset legacy costs and charges.
PennyMac Strikes New Repo Deal This Time with B of A
PennyMac Mortgage Investment Trust recently entered into a master repurchase agreement with Bank of America that allows a subsidiary of the publicly traded REIT to sell — and later repurchase — new originations in an aggregate principal amount of up to $200 million.
Lawsuit Claims MERS Failed to Pay County and State Taxes
Two Michigan registers of deeds have filed a class action lawsuit against Mortgage Electronic Registration Systems for allegedly not paying proper county and state transfer taxes.
First-Time Home Buyers on the Decline
First-time home buyers are no longer a force to be reckoned with. According to new research from the National Association of Realtors, just 36% of buyers in the 12-month period between July 2010 and June 2011 were first-timers, a sharp decline from a record 50% in the last survey.
GSEs Getting Tough with Servicers on Loss Mitigation Time Lines
Mortgage servicers seem to be caught between a rock and hard place when it comes to foreclosures: their legal practices are being scrutinized by state attorneys general for sloppy paperwork while the GSEs pile on fees for delays in loss mitigation work.
DOJ Starts Compensation Process for Servicemembers in B of A Settlement
The Justice Department began sending letters Monday to servicemembers who are entitled to $20 million in damages from Bank of America Corp. for alleged violations of the Servicemember Civil Relief Act.
Facing Challenge From Warren, Sen. Brown Endorses Cordray for CFPB
Massachusetts Sen. Scott Brown late Monday became the first Senate Republican to endorse the nomination of Richard Cordray to lead the Consumer Financial Protection Bureau.