FREDDIE MAC MODIFIES RELIEF REFINANCE MORTGAGESM
Changes Provide Broader Availability for Borrowers, More Flexibility for Closing Costs
McLean, VA In a move aimed at furthering the success of President Obamas Making Home Affordable Program, Freddie Mac (NYSE: FRE) today announced several changes to its refinance offering under the program. Freddie Macs Relief Refinance Mortgage is designed to assist borrowers who are current on their mortgage payments but who would benefit from refinancing into mortgages with terms that better position them for long-term homeownership.
Once these changes are available, borrowers will be able to refinance a Freddie Mac-owned or guaranteed mortgage with any lender affiliated with Freddie Mac. Previously, borrowers had to work with the lender who currently services their mortgage. In addition, to help reach more borrowers, Freddie Mac is increasing the amount of closing costs that can be rolled into the new refinance mortgage.
We are responding to consumers desires to have more refinancing options, said Freddie Mac Executive Vice President Don Bisenius. 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 Administrations Making Home Affordable program to as many borrowers as possible.
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 Macs standard postsettlement delivery fees, up to a maximum of 2 percent, will apply to the Relief Refinance Program.
Borrowers should visit https://www.freddiemac.com/corporate/ and complete the online form to determine if Freddie Mac owns their mortgage.
Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation's residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Over the years, Freddie Mac has made home possible for one in six homebuyers and more than five million renters.
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HB 261 was signed into law on May 11, 2009 by Georgia Governor Sonny Perdue. . Unlike the federal tax credit, the Georgia credit is not limited to first-time homebuyers, and there are no applicable income limits. The credit is only available to buyers of eligible single family residences who close between June 1 and November 30 of this year. Below are Frequently Asked Questions regarding the Georgia Tax Credit:
1. Is this tax credit limited to first time homebuyers?
NO, all purchasers of an eligible single family residence in Georgia that file a Georgia income tax return can claim the credit.
2. Can the Georgia credit be combined with the federal $8,000 first time homebuyer tax credit?
YES, if buyers meet the qualification for each credit they may claim both. Each credit operates independently from the other. One is claimed on your federal income tax return, the other is claimed on your Georgia income tax return.
3. Is it true this credit is limited to the purchase of a single family residence?
YES, the tax credit is limited to the purchase of one single family residence.
Single-family residences (including condominiums) are eligible if they are:
* New residences, residences occupied at the time of sale, or previously occupied residences, if such residences:
- Were for sale prior to the effective date (5/11/09) and were still for sale after the effective date;
* Owner-occupied residences with respect to which the owners acquisition debt is in default on or before March 1, 2009; and
* Residences with respect to which a foreclosure event has taken place and which are owned by the mortgagor or the mortgagors agent.
4. Is it true that eligible single family residences must have been listed prior to May 11, 2009 in order to qualify for the credit?
YES, the original intent of the bill was aimed at reducing the housing stock that has been on the market for an extended period of time.