Massachusetts Mortgage Loans

Part of the Homeowner Affordability and Stability Plan is a mortgage refinance program for existing Fannie Mae or Freddie Mac loans. Fannie Mae is offering two different programs:

1. The Refi Plus Program that requires the servicer of the loan to be the originating lender.
2. The DU Refi Plus Program (DU is the Automated Underwriting System for Fannie Mae) that allows any lender/broker using DU to originate the loan as long as the existing loan is a Fannie Mae loan. In my opinion this is the best scenario as I am able to shop multiple lenders to find you the lowest rate as opposed to just the rate the current lender is willing to offer. This is one of the main reasons and benefits of working with a mortgage broker.

Some specifics of the program are:

• Existing mortgage must currently be a Fannie or Freddie loan.
• Existing loan may not be considered ineligible (must get an Approved/Eligible from DU). Ineligible loans include existing mortgage loans that received a DU Expanded approval (EA).
• The new loan must be a fixed rate mortgage.
• Maximum LTV for 1-2 unit properties is 105% and require an appraisal.
• Maximum LTV for 3-4 unit properties is 80% and also require an appraisal.
• No maximum CLTV.
• Existing mortgage must be current and have acceptable mortgage payment history. No minimum FICO score is required although borrower must meet bankruptcy and foreclosure requirements. In addition, borrower must demonstrate credit worthiness.
• Rate and term refinance only (No Cash Out) - purchase money seconds MAY Not be included.
• Loan level price adjustments (points) will apply (determined by credit score on credit report)
• MI required (same coverage factor of existing loan) for mortgage loans that had original LTV’s greater than 80%. If you did not have mortgage insurance you would not have it on the new loan.
• DU Refi Plus must receive Approve/Eligible and will not be available until April 4. Income and employment verification is still required. The broker and lender must determine that the borrower has a reasonable ability to repay the mortgage.

- Freddie Mac, at this time, requires the servicer of the loan to be the originating lender.

There are still many portions of the program details still to be determined. The lenders still have to determine if they will be participating and how they plan to do so. I am feel confidant this plan will actually help those who have good credit and some equity in their home.

If you would like me to assist you with determining if your home loan is owned by Fannie Mae or Freddie Mac please give me a call at: 800-941-5616.

I will continue to provide you with updates as they become available.