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Relief Refinance Mortgage FAQs

The following answers to frequently asked questions about the Freddie Mac Relief Refinance Mortgage^SM provide additional guidance on our requirements for this offering, but are not a replacement or substitute for information found in the Single-Family Seller/Servicer Guide (Guide) or the terms of your Master Agreement and/or Master Commitment.

For complete requirements, review Guide Chapter A24 for Relief Refinance Mortgages – Same Servicer with LTV ratios greater than 80 percent, Guide Chapter B24 for Relief Refinance Mortgages – Open Access, and Guide Chapter C24 for Relief Refinance Mortgages – Same Servicer with LTV ratios less than or equal to 80 percent.

General

1. Can a borrower with significant equity use the Relief Refinance offerings?
2. Are all lenders required to participate in the Home Affordable Refinance program (HARP)?

Mortgage and Property Type

3. Why are Home Possible® Mortgages excluded from the Relief Refinance Mortgage offering?
4. Are Section 502 Guaranteed Rural Housing (GRH) Mortgages, Section 184 Native American Mortgages, and FHA/VA Mortgages eligible for the Relief Refinance Mortgage offering?
5. Are super conforming mortgages eligible for the Relief Refinance Mortgage offering?
6. Are prepayment penalty mortgages eligible for the Relief Refinance Mortgage offering?
7. Is an existing Streamlined Refinance Mortgage eligible for the Relief Refinance Mortgage offerings?
8. Is an existing Mortgage Revenue Bond (MRB) loan eligible for Relief Refinance Mortgage offerings?
9. If the mortgage being refinanced is a balloon/reset mortgage, can the Relief Refinance Mortgage be an ARM?
10. Why are ARMs with LTV ratios greater than 105 percent not eligible for Relief Refinance Mortgages?
11. Why are 1/1 and 3/1 ARMs not eligible under the Relief Refinance Mortgage offering?
12. If the existing mortgage was underwritten and sold to Freddie Mac as an investment property mortgage or second home, but the property is now a primary residence, is it eligible for a Relief Refinance Mortgage?
13. Can a Relief Refinance Mortgage be amortized for a period other than 15, 20, or 30 years?

General Underwriting Requirements

14. Is there a maximum debt-to-income ratio requirement for Relief Refinance Mortgages Open Access?
15. Are employment and income verification required for Relief Refinance Mortgages?
16. Do standard reserve requirements apply to 2- to 4-unit primary residences and 1- to 4-unit investment properties?
17. Are escrows required for Relief Refinance Mortgages?
18. Is a new (or updated) flood certification required for Relief Refinance Mortgages?
19. Freddie Mac policy once allowed borrowers to have up to 10 financed properties. Current policy allows borrowers to have up to four financed properties. Which requirement applies to Relief Refinance Mortgages?
20. Under what circumstances can a borrower on the mortgage being refinanced be omitted from the Relief Refinance Mortgage?
21. Can a borrower who is not on the mortgage being refinanced be added to the Relief Refinance Mortgage?

Indicator Scores

22. Can a Seller still underwrite a borrower who has a low credit score?
23. Can a Seller still underwrite a borrower who does not have a usable credit score due to insufficient or inaccurate information?
24. If the principal and interest payment on the Relief Refinance Mortgage ® Same Servicer increases by less than 20 percent and I don't have to requalify the borrower, do I still have to deliver an Indicator Score?

Closing Costs

25. Can the Relief Refinance Mortgage closing costs that exceed the lesser of $5,000 or 4 percent of the unpaid principal balance of the mortgage being refinanced be rolled into the existing secondary financing?
26. How may excess proceeds from a Relief Refinance Mortgage transaction be used?
27. Does a Seller have options, other than making a principal curtailment at closing, if there are proceeds remaining from the refinance that exceed the allowable amounts?
28. Is any documentation required when excess proceeds from a Relief Refinance Mortgage transaction are applied as a principal curtailment at closing?
29. Do I have to document the source of closing costs paid by the borrower for Relief Refinance Mortgages?
30. Can a borrower elect a higher interest rate for the Relief Refinance Mortgage and apply the premium pricing toward closing costs, financing costs and prepaids/escrows?

Secondary Financing

31. When refinancing a junior lien to the Relief Refinance Mortgage, does the HELOC limit have to be reduced if the full amount of the loan was not drawn?
32. Can the unpaid principal amount of the existing junior lien increase?

Principal and Interest Payment

33. If the mortgage being refinanced is an ARM and the interest rate is about to adjust, the Guide says that the payment used to calculate whether the new principal and interest (P&I) payment has increased by more than 20 percent is the current contractually obligated payment under the note, or if the note provides for more than one payment option, the Seller must use the lowest payment option to determine whether the increase in P&I exceeds 20 percent.
    
    Does this mean that if the ARM P&I is $700 for the last 12 months, and this adjusted three months ago to $800, do you use $700? What if it was $800 for the last six months, would it be $700 or $800?
34. Is completing a loan application required if a borrower does not need to be re-qualified because the principal and interest payment on the Relief Refinance Mortgage – Same Servicer will increase by less than 20 percent?

Loan Prospector®

Note: Relief Refinance Mortgages – Same Servicer may not be submitted to Loan Prospector.

35. If the mortgage being refinanced is a government loan, will Loan Prospector let me know that it is ineligible for the Relief Refinance Mortgage – Open Access?
36. If the mortgage being refinanced is ineligible for the Relief Refinance Mortgage – Open Access because it was delivered to Freddie Mac with a prohibited credit enhancement, will Loan Prospector indicate the type of credit enhancement?
37. Will Loan Prospector automatically identify mortgages eligible for the Relief Refinance Mortgage – Open Access, or will I need to choose this option?
38. Are mortgages submitted through Loan Prospector that receive an Ineligible, Incomplete or Invalid eligible for the Relief Refinance Mortgage – Open Access?
39. If I don't have the mortgage file for the mortgage being refinanced, how do I find the Freddie Mac loan number and the mortgage insurance certificate number required for delivering Relief Refinance Mortgages – Open Access?

Mortgage Insurance

40. Is mortgage insurance required on the Relief Refinance Mortgage?
41. If mortgage insurance has been dropped from the existing mortgage due to the original LTV ratio falling to the point of termination through natural amortization or principal reduction and the Relief Refinance Mortgage has an LTV ratio greater than 80 percent, is the mortgage insurance still waived for the refinance?
42. If an existing mortgage has lender-paid mortgage insurance (LPMI), is it eligible under the Relief Refinance Mortgage offering?
43. How do I transfer mortgage insurance from the old mortgage to the new Relief Refinance Mortgage?
44. If the mortgage insurer (MI) issues a replacement certificate number for the mortgage insurance being transferred to the Relief Refinance Mortgage, where do I input this information?
45. If the MI will not transfer the mortgage insurance to the new mortgage, is the mortgage still eligible for sale to Freddie Mac?
46. Are all MIs participating in the Relief Refinance Mortgage – Open Access and allowing the new Servicer on the mortgage insurance?

Collateral Assessment

47. Is obtaining an exterior-only appraisal acceptable for determining property value for Relief Refinance Mortgages?
48. If the property valuation comes in lower than what the borrower initially estimated, could this impact which loan program they are eligible for?

Home Value Explorer®

Notes: 1) Use of HVE is not permitted for Relief Refinance Mortgages – Open Access; 2) Seller/Servicers must meet the terms and conditions defined in Guide Exhibit 32 when using Freddie Mac's HVE look-up tool.

49. What is Home Value Explorer (HVE)?
50. Have the requirements for the use of HVE to determine the property value for a Relief Refinance Mortgage changed?
51. Can you explain the HVE data fields?
52. Where do I obtain the HVE point value estimate to use with a Relief Refinance Mortgage – Open Access in Loan Prospector?
53. How do I access HVE to obtain the value of the property for the Relief Refinance Mortgage – Same Servicer?
54. Do I need a new user ID and password to access the HVE look-up tool?
55. What information must be submitted to the HVE look-up tool to receive a point value estimate?
56. For Relief Refinance Mortgage – Same Servicer, if the HVE point value does not support the value needed, may the Seller/Servicer obtain a new appraisal?
57. Can I use the high or low HVE value estimates instead of the HVE point value estimate for determining property value for the Relief Refinance Mortgages – Same Servicer?
58. What documentation are Seller/Servicers required to include in the mortgage file when they use an HVE point value estimate they receive from the look-up tool?
59. Can I use HVE to estimate property values for Relief Refinance Mortgages regardless of LTV ratios?
60. How do I access the HVE look-up tool if I am not a Loan Prospector user?
61. Does the HVE look-up tool support batch requests?
62. How will I be notified when my HVE batch request is ready?

Delivery Fee Cap

63. On the Exhibit 19, for Relief Refinance Mortgages with settlement dates on or after January 3, 2012, there is a 0.00 percent delivery fee cap for loans with LTV ratios over 80 percent and amortization terms less than or equal to 20 years. Does this mean there will be no Exhibit 19 fees assessed on those loans?
64. Are all delivery fees included in the delivery fee cap?
65. Is the cash adjustor included in the delivery fee cap?

Delivery and Execution Requirements

66. Are there any special delivery requirements for Relief Refinance Mortgages?
67. How do I deliver Relief Refinance Mortgages with LTV ratios greater than 105 percent under the Guarantor execution?

Cash Contracts

68. Can I commingle in the same Cash commitment Relief Refinance Mortgages with LTV ratios less than 105 percent and Relief Refinance Mortgages with LTV ratios greater than 105 percent?
69. How do I identify fixed-rate contracts for Relief Refinance Mortgages with LTV ratios greater than 105 percent and less than or equal to 125 percent?
70. If I took out a contract for Relief Refinance Mortgages with LTV ratios greater than 105 percent, and the mortgages end up having LTV ratios less than 105 percent when I close them, do I need to pair out of the contract?

Cash Adjustor

Note: The cash adjustor only applies to Relief Refinance Mortgages with LTV ratios greater than 105 percent that are sold to Freddie Mac for cash.

71. Where can I find the Cash Adjustor?
72. How will I know what the Cash Adjustor value is and when it will be applied?

Borrower Solicitation

73. I thought Guide Section 8.10 prohibited borrower solicitation. Under which circumstances can I solicit borrowers for a Relief Refinance Mortgage with an LTV ratio less than or equal to 80 percent?

General

1. Can a borrower with significant equity use the Relief Refinance offerings?
   
   
   Yes, please see Guide Chapter C24 for our Relief Refinance Mortgage – Same Servicer or Chapter B24 for Relief Refinance Mortgage – Open Access for our program requirements for borrowers with LTV ratios of 80 percent or less. For borrowers who do not have enough equity in their home to qualify for traditional refinancing, or have experienced a decline in home values, please see Guide Chapter A24 for Relief Refinance Mortgages – Same Servicer or Chapter B24 for Relief Refinance Mortgages – Open Access for our program requirements for loans with LTV ratios greater than 80 percent.
2. Are all lenders required to participate in the Home Affordable Refinance program (HARP)?
   
   
   Lender participation in HARP is voluntary. Because participation in HARP is voluntary, Freddie Mac-approved lenders may adopt the Relief Refinance Mortgage offering, Freddie Mac's business implementation of HARP, at their discretion.

Mortgage and Property Type

3. Why are Home Possible® Mortgages excluded from the Relief Refinance Mortgage offering?
   
   
   Home Possible Mortgages are not excluded. The mortgage being refinanced can be a Home Possible Mortgage, but the new Relief Refinance Mortgage cannot be a Home Possible Mortgage.
   
   Also, if the mortgage being refinanced is a Home Possible Mortgage with an Affordable Second®, the Affordable Second must be subordinated to the new Relief Refinance Mortgage. In this case, SCC 583 (mortgage with an Affordable Second) must be delivered with the new Relief Refinance Mortgage.
4. Are Section 502 Guaranteed Rural Housing (GRH) Mortgages, Section 184 Native American Mortgages, and FHA/VA Mortgages eligible for the Relief Refinance Mortgage offering?
   
   
   No. The existing mortgage must be a conventional first-lien mortgage and the Relief Refinance Mortgage may not be a Section 502 GRH Mortgage, Section 184 Native American Mortgage or an FHA/VA Mortgage.
5. Are super conforming mortgages eligible for the Relief Refinance Mortgage offering?
   
   
   Yes. Both the existing mortgage and the Relief Refinance Mortgage may be a super conforming mortgage.
6. Are prepayment penalty mortgages eligible for the Relief Refinance Mortgage offering?
   
   
   The existing mortgage can have a prepayment penalty, but the Relief Refinance Mortgage may not have a prepayment penalty.
7. Is an existing Streamlined Refinance Mortgage eligible for Relief Refinance Mortgage offerings?
   
   
   Yes. The mortgage being refinanced may be a Streamlined Refinance Mortgage. For a Relief Refinance Mortgage – Same Servicer, the mortgage being refinanced must also have met the eligibility requirements as of the note date of the mortgage being refinanced.
8. Is an existing Mortgage Revenue Bond (MRB) loan eligible for Relief Refinance Mortgage offerings?
   
   
   Yes. If the loan being refinanced is an MRB conventional mortgage, it is eligible for the Relief Refinance Mortgage offerings. However, the new loan cannot be an MRB mortgage.
9. If the mortgage being refinanced is a balloon/reset mortgage, can the Relief Refinance Mortgage be an ARM?
   
   
   Yes. Only refinancing from a fixed-rate mortgage to an ARM is prohibited under the Relief Refinance Mortgage offering.
10. Why are ARMs with LTV ratios greater than 105 percent not eligible for Relief Refinance Mortgages?
    
    
    The mortgage being refinanced may be an ARM. However, the Relief Refinance Mortgage may not be an ARM if the LTV ratio is greater than 105 percent due to special disclosure and reporting requirements for Relief Refinance Mortgages with higher LTV ratios.
11. Why are 1/1 and 3/1 ARMs not eligible under the Relief Refinance Mortgage offering?
    
    
    The intent of this offering is to allow borrowers to refinance into mortgage products that better position them for long-term homeownership success. The ARM products we allow are 5/1, 7/1 and 10/1-year ARMs. These ARMs have longer fixed-initial periods, making them more stable products compared to short-term ARMs (1/1 and 3/1).
12. If the existing mortgage was underwritten and sold to Freddie Mac as an investment property mortgage or second home, but the property is now a primary residence, is it eligible for a Relief Refinance Mortgage?
    
    
    Yes. For Relief Refinance Mortgages – Same Servicer with LTV ratios greater than 80 percent, the mortgage being refinanced and the new Relief Refinance Mortgage do not have to represent the same occupancy.
    
    For Relief Refinance Mortgages – Same Servicer with LTV ratios less than or equal to 80 percent, if the mortgage being refinanced was underwritten and sold to Freddie Mac as a second home or investment property mortgage, and the property is now a primary residence and the borrower(s) obligated on the note is now an owner-occupant, the Relief Refinance Mortgage – Same Servicer is eligible for sale to Freddie Mac as a primary residence mortgage, provided it meets all of the other requirements in Guide Chapter C24.
    
    For Relief Refinance Mortgages – Open Access, the new refinance mortgage must accurately reflect the current occupancy status and be underwritten based on that status. The new refinance mortgage must meet all of the requirements in Guide Chapter B24
13. Can a Relief Refinance Mortgage be amortized for a period other than 15, 20, or 30 years?
    
    
    Yes. For example, a 27-year Relief Refinance Mortgage can be sold to Freddie Mac as a 30-year mortgage provided it meets the requirements for Relief Refinance Mortgages in Guide Chapters A24, B24, or C4 as applicable.

General Underwriting Requirements

14. Is there a maximum debt-to-income ratio requirement for Relief Refinance Mortgages – Open Access?
    
    
    For Relief Refinance Mortgages – Open Access, Loan Prospector calculates and assesses the borrower's qualifying ratios. For Accept mortgages and A-minus mortgages, Loan Prospector has determined that the borrower's qualifying ratios are acceptable.
    
    Caution mortgages need to be manually underwritten. The debt-to-income ratio must be underwritten according to the requirements outlined in Guide Section 37.16.
15. Are employment and income verification required for Relief Refinance Mortgages?
    
    
    Yes. For Relief Refinance Mortgages – Same Servicer, employment and income documentation is required when the principal and interest (P&I) payment between the current and new payment increases by more than 20 percent (Streamlined Accept documentation per Guide Section 37.22(a)). When the P&I increase is less than or equal to 20 percent, no verification of income amount is required. Only verification of source of income is required. Relief Refinance Mortgages – Open Access require a full underwrite for all new loans.
16. Do standard reserve requirements apply to 2- to 4-unit primary residences and 1- to 4-unit investment properties?
    
    
    No, they do not apply for either Relief Refinance Mortgage – Same Servicer or Relief Refinance Mortgage – Open Access.
17. Are escrows required for Relief Refinance Mortgages?
    
    
    Our normal escrow requirements apply to Relief Refinance Mortgages as defined in Guide Section 59.1.
18. Is a new (or updated) flood certification required for Relief Refinance Mortgages?
    
    
    Flood zone determination must be made for each mortgage sold to Freddie Mac. See Guide Section 58.3 for requirements.
19. Freddie Mac policy once allowed borrowers to have up to 10 financed properties. Current policy allows borrowers to have up to four financed properties. Which requirement applies to Relief Refinance Mortgages?
    
    
    For Relief Refinance Mortgages – Same Servicer with LTV ratios less than or equal to 80 percent, Sellers must represent and warrant that the mortgage being refinanced met Freddie Mac's eligibility requirements as stated in the Seller's Purchase Documents as of the note date of the mortgage being refinanced. For the new Relief Refinance Mortgage, Sellers are not required to represent and warrant the requirements of Guide Sections 22.22 and 22.22.1 regarding the maximum number of financed properties.
    
    This requirement does not apply to Relief Refinance Mortgages – Same Servicer with LTV ratios greater than 80 percent as Sellers are not required to represent and warrant the requirements regarding number of financed properties for the mortgage being refinanced or the new mortgage.
    
    For Relief Refinance Mortgages – Open Access, the new Relief Refinance Mortgage needs to be underwritten with Loan Prospector. Sellers, therefore, need to comply with the terms of the Guide/their Purchase Documents, including the requirement for maximum number of financed properties.
20. Under what circumstances can a borrower on the mortgage being refinanced be omitted from the Relief Refinance Mortgage?
    
    
    For both Relief Refinance Mortgage – Same Servicer and Relief Refinance Mortgage – Open Access, a borrower on the mortgage being refinanced may be omitted for any cause (not solely death or divorce), provided that the omitted borrower is removed from the deed and does not have an ownership interest in the mortgaged premises, and at least one borrower(s) from the mortgage being refinanced is retained.
    
    For Relief Refinance Mortgage – Same Servicer, when a borrower is omitted from the Relief Refinance Mortgage the mortgage file must contain evidence that the remaining borrower has been making the mortgage payments, including the payments for any secondary financing, for the most recent 12-month period. In the case of death, the 12-month payment history is not required if the Seller obtains and retains documentation of the borrower's death in the mortgage file.
21. Can a borrower who is not on the mortgage being refinanced be added to the Relief Refinance Mortgage?
    
    
    Yes, for Relief Refinance Mortgages – Open Access. A borrower who is not on the mortgage being refinanced may be added provided that at least one of the existing borrower(s) is retained. The addition of a borrower to the Relief Refinance Mortgage – Open Access is available for all occupancy types. However, a non-occupying borrower may not be added to a mortgage secured by a primary residence.
    
    No, for Relief Refinance Mortgages – Same Servicer. No new borrowers may be added to the new Relief Refinance Mortgage regardless of the situation or the LTV ratio.

Indicator Scores

22. Can a Seller still underwrite a borrower who has a low credit score?
    
    
    For Relief Refinance Mortgage – Same Servicer, there is no minimum Indicator Score requirement unless the P&I payment for the Relief Refinance Mortgage will increase by more than 20 percent, in which case a minimum credit score of 620 is required.
    
    For Relief Refinance Mortgage – Open Access, the loan must be submitted to Loan Prospector and receive a Risk Class of Accept, or Caution eligible for A-minus. If the mortgage receives a risk class of Caution with no A-minus eligible purchase eligibility message, it must be manually underwritten and comply with the minimum Indicator Score requirements in Guide Chapter B24.3 (d) (ii).
23. Can a Seller still underwrite a borrower who does not have a usable credit score due to insufficient or inaccurate information?
    
    
    If the Seller determines that there is no usable credit score due to insufficient information or inaccurate information, the mortgage will not be eligible for Relief Refinance Mortgage – Open Access. However, the loan is eligible for purchase as a Relief Refinance Mortgage – Same Servicer as long as the payment doesn't increase by more than 20 percent. Sellers will still need to deliver the credit score types "I" or "T" for incomplete or inaccurate credit, and the applicable Exhibit 19 fees will apply. Refer to Section 37.5(f) and 17.3(c) for Indicator Score delivery requirements.
24. If the principal and interest (P&I)payment on the Relief Refinance Mortgage – Same Servicer increases by less than 20 percent and I don't have to re-qualify the borrower, do I still have to deliver an Indicator Score?
    
    
    Yes. Updated Indicator Scores are required for disclosure purposes, regardless of the new P&I payment amount. If the P&I payment increases by more than 20 percent, the Indicator Score must also be used to re-qualify the borrower.

Closing Costs

25. Can the Relief Refinance Mortgage closing costs that exceed the lesser of $5,000 or 4 percent of the unpaid principal balance of the mortgage being refinanced be rolled into the existing secondary financing?
    
    
    No. Secondary financing may not increase as part of the Relief Refinance Mortgage. Junior lien amounts can increase only if they are unrelated to the Relief Refinance Mortgage transaction.
26. How may excess proceeds from a Relief Refinance Mortgage transaction be used?
    
    
    After proceeds are applied as required by the Guide, the mortgage amount may be reduced or the excess amount must be applied as a principal curtailment to the Relief Refinance Mortgage at closing and must be clearly reflected on the HUD-1 form or other equivalent closing statement. Under no circumstances may cash disbursed to the borrower exceed $250.
27. Does the Seller have options other than making a principal curtailment at closing, if there are proceeds remaining from the refinance that exceed the allowable amounts?
    
    
    The only alternative to a principal curtailment is to reduce the loan amount prior to closing. This would require new loan documents.
28. Is any documentation required when excess proceeds from a Relief Refinance Mortgage transaction are applied as a principal curtailment at closing?
    
    
    Yes. The principal curtailment must be clearly reflected on the HUD-1 form or other equivalent closing statement.
29. Do I have to document the source of closing costs paid by the borrower for Relief Refinance Mortgages?
    
    
    Closing costs paid by the borrower have to be verified for Relief Refinance Mortgages. For Relief Refinance Mortgages – Open Access, verification must be according to the minimum Documentation Level as provided by the Loan Prospector Feedback Certificate.
    
    For Relief Refinance Mortgages – Same Servicer with LTV ratios less than or equal to 80 percent, funds needed for closing are required and, at a minimum, must meet the streamlined Accept Documentation requirements.
30. Can a borrower elect a higher interest rate for the Relief Refinance Mortgage and apply the premium pricing toward closing costs, financing costs and prepaids/escrows?
    
    
    Yes. A borrower may elect a higher interest rate for the Relief Refinance Mortgage and apply the premium pricing toward closing costs, financing costs and prepaids/escrows.

Secondary Financing

31. When refinancing a junior lien to the Relief Refinance Mortgage, does the home equity line of credit (HELOC) limit have to be reduced if the full amount of the loan was not drawn?
    
    
    No. The unpaid principal balance (UPB) of the new junior lien cannot be more than the UPB, at the time of payoff of the junior lien being refinanced. However, the limit is not required to be adjusted downward.
32. Can the unpaid principal amount of the existing junior lien increase?
    
    
    Yes, for both Relief Refinance Mortgages – Same Servicer and Relief Refinance Mortgages – Open Access,the junior lien amount can increase as long as the increase is not for a reason related to the Relief Refinance Mortgage transaction (i.e., to curtail the Relief Refinance Mortgage or to pay related closing costs, financing costs or prepaids/escrows).

Principal And Interest Payment

33. If the mortgage being refinanced is an ARM and the interest rate is about to adjust, the Guide says that the payment used to calculate whether the new principal and interest (P&I) payment has increased by more than 20 percent is the current contractually obligated payment under the note, or if the note provides for more than one payment option, the Seller must use the lowest payment option to determine whether the increase in P&I exceeds 20 percent.
    
    Does this mean that if the ARM P&I is $700 for the last 12 months, and this adjusted three months ago to $800, do you use $700? What if it was $800 for the last six months, would it be $700 or $800?
    
    
    If the current contractually obligated payment for the ARM P&I is $800, you would use the $800 payment to calculate whether the new P&I payment has increased by more than 20 percent.
34. Is completing a loan application required if a borrower does not need to be re-qualified because the P&I payment on the Relief Refinance Mortgage – Same Servicer will increase by less than 20 percent? If so, will the information be used to qualify the borrower?
    
    
    Form 65, Uniform Residential Loan Application, must be completed for all Relief Refinance Mortgages. This means a borrower must complete all sections of the application.
    
    The information provided on Form 65 will not be used to qualify the borrower. Sections A24.3 (g) and C24.3 (g) state that: "A borrower will be presumed to be creditworthy for the Freddie Mac Relief Refinance Mortgage... if all of the requirements of this chapter are met."

Loan Prospector®

Note: Relief Refinance Mortgages – Same Servicer may not be submitted to Loan Prospector.

35. If the mortgage being refinanced is a government loan, will Loan Prospector let me know that it is ineligible for the Relief Refinance Mortgage – Open Access?
    
    
    Loan Prospector will indicate if the mortgage is ineligible for the Relief Refinance – Open Access and will provide a feedback message stating that the loan type must be conventional. Please reference the Loan Prospector Feedback messages chart for more information.
36. If the mortgage being refinanced is ineligible for the Relief Refinance Mortgage – Open Access because it was delivered to Freddie Mac with a prohibited credit enhancement, will Loan Prospector indicate the type of credit enhancement?
    
    
    No. Loan Prospector will provide the following feedback message – "Existing FM loan ineligible for Relief Refinance – Open Access." See the Loan Prospector September 27, 2009 Release for feedback messages.
37. Will Loan Prospector automatically identify mortgages eligible for the Relief Refinance Mortgage – Open Access or will I need to choose this option?
    
    
    No. You will need to select the Open Access Offering ID 310 in Loan Prospector if you are submitting the mortgage as a Relief Refinance Mortgage – Open Access.
38. Are mortgages submitted through Loan Prospector that receive an Ineligible, Incomplete or Invalid eligible for the Relief Refinance Mortgage – Open Access?
    
    
    No. Relief Refinance Mortgages – Open Access submitted to Loan Prospector must receive a risk class of "Accept" or "Caution – Eligible for A-minus." Mortgages that receive a Caution risk class (not "Caution – Eligible for A-minus"), must be manually underwritten to determine eligibility, and must meet the terms of Guide Chapter B24.
    
    If the mortgage receives a Loan Prospector evaluation status of Invalid, Ineligible or Incomplete, the Seller must take all steps possible in accordance with Guide Section 2.2.1 to correct the information and resubmit the mortgage to Loan Prospector.
39. If I don't have the mortgage file for the mortgage being refinanced, how do I find the Freddie Mac loan number and the mortgage insurance certificate number required for delivering Relief Refinance Mortgages – Open Access?
    
    
    This information will be included in the Loan Prospector Feedback Certificate if the certificate indicates that the mortgage is eligible for the Relief Refinance Mortgage – Open Access.

Mortgage Insurance

40. Is mortgage insurance required on the Relief Refinance Mortgage?
    
    
    If the existing mortgage does not currently have mortgage insurance, then mortgage insurance is not required for the Relief Refinance Mortgage, even if the LTV ratio of the new mortgage exceeds 80 percent. Otherwise, mortgage insurance on the existing mortgage must be transferred to the Relief Refinance Mortgage with the existing or replacement certificate and the same percentage of coverage.
41. If mortgage insurance has been dropped from the existing loan due to the original LTV ratio falling to the point of termination through natural amortization, principal reduction, etc. and the current LTV ratio for the refinance is greater than 80 percent, is the mortgage insurance still waived for the refinance?
    
    
    Yes. If there is no mortgage insurance on the existing mortgage then there is no new mortgage insurance required for the Relief Refinance Mortgage.
42. If an existing mortgage has lender-paid mortgage insurance (LPMI), is it eligible under the Relief Refinance Mortgage offering?
    
    
    Yes, LPMI is permitted. The same percentage of LPMI coverage must be maintained for the Relief Refinance Mortgage. Seller/Servicers should consult with the mortgage insurer (MI) to determine if the MI will permit the transfer of LPMI or have different rules for loans with LPMI.
43. How do I transfer mortgage insurance from the old mortgage to the new Relief Refinance mortgage?
    
    
    Sellers must contact their MI company. Each MI may have specific underwriting and processing requirements for the transfer of mortgage insurance.
44. If the mortgage insurer issues a replacement certificate number for the mortgage insurance being transferred to the Relief Refinance Mortgage, where do I input this information?
    
    
    Input the replacement certificate number on Form 11, Mortgage Submission Schedule, or Form 13SF, Mortgage Submission Voucher, as applicable, in the MI certificate field.
45. If the MI will not transfer the mortgage insurance to the new mortgage, is the mortgage still eligible for sale to Freddie Mac?
    
    
    Yes, if primary mortgage insurance can be obtained from a new MI for the same or higher MI coverage, then the loan would be eligible for sale to Freddie Mac. If new mortgage insurance is obtained, the replacement certificate number provided by the MI must be delivered along with the other required mortgage insurance related fields.
46. Are all MIs participating in the Relief Refinance Mortgage – Open Access and allowing the new Servicer on the mortgage insurance?
    
    
    Please check with your MI(s) for their participation and requirements.

Collateral Assessment

47. Is obtaining an exterior-only appraisal acceptable for determining property value for Relief Refinance Mortgages?
    
    
    No. If the new appraisal option is selected for the Relief Refinance Mortgage – Same Servicer or Relief Refinance Mortgage – Open Access, it must be an appraisal with an interior and exterior inspection. The appraisal must meet the requirements of the Guide.
48. If the property valuation comes in lower than what the borrower initially estimated, could this impact which loan program the borrower is eligible for?
    
    
    Yes. Loans with LTV ratios greater than 80 percent need to meet the program requirements in Guide Chapters A24 (for Relief Refinance Mortgage – Same Servicer) or B24 (for Relief Refinance Mortgage – Open Access). If the LTV ratio for the new Relief Refinance Mortgage is less than or equal to 80 percent, the loan must meet the requirements of Guide Chapter C24 for Relief Refinance Mortgages – Same Servicer, and Guide Chapter B24 for Relief Refinance Mortgages – Open Access.

Home Value Explorer®

NOTE: Seller/Servicers must meet the terms and conditions defined in Guide Exhibit 32 when using Freddie Mac's HVE look-up tool.

49. What is Home Value Explorer (HVE)?
    
    
    HVE is a statistically-based automated valuation model that provides point value estimates for properties located in all 50 states and the District of Columbia. HVE estimates property value and provides a confidence score and Forecast Standard Deviation to indicate the accuracy of the estimated value.
50. Have the requirements for the use of HVE to determine the property value for a Relief Refinance Mortgage changed?
    
    
    Yes
    
    Relief Refinance Mortgages – Same Servicer: For Loan Prospector submissions and Freddie Mac settlements on or after March 15, 2012, Sellers will now be able use HVE to determine property values for certain 2-unit properties in addition to 1-unit properties.
    
    Relief Refinance Mortgages – Open Access: Sellers will now be able to use HVE to determine property values for Relief Refinance Mortgages – Open Access. This flexibility was not available in the old program offering. Effective for Loan Prospector submissions and Freddie Mac settlements on or after March 15, 2012, Sellers will be able to use HVE to determine property values for certain 1- to 2-unit properties.
51. Can you explain the HVE data fields?
    
    
    HVE Point Value: provides the estimated value of the property.
    
    HVE Forecast Standard Deviation: provides the accuracy of the estimated value. HVE standard deviations between 0 and .20 are acceptable and correspond to high or medium Confidence Score levels. HVE standard deviations greater than .20 represent low confidence levels.
    
    HVE Value Date: is the date that the point value estimate for the property was obtained.
52. Where do I obtain the HVE point value estimate to use with a Relief Refinance Mortgage – Open Access in Loan Prospector?
    
    
    The HVE point value estimate will be provided as part of the Loan Prospector feedback messages as it is today. As of March 15, 2012, Sellers will be able to use this value to determine the LTV ratio and sell the loan to Freddie Mac. Sellers must review the HVE point value estimate and determine whether it meets the requirements of the program. This includes an HVE point value estimate that has a confidence score of high or medium and is no more than 120 days old as of the note date.
53. How do I access HVE to obtain the value of the property for the Relief Refinance Mortgage?
    
    
    If you are a Freddie Mac Seller/Servicer and current Loan Prospector user, you may use your existing Loan Prospector user ID and password to access our free HVE look-up tool located on a separate tab on the secure pages of the Loan Prospector Web application. Alternatively, you can sign up to purchase HVE through one of Freddie Mac's approved distributors. Third-party originators may only have access to the HVE look-up tool through Freddie Mac-approved Seller/Servicers under the terms and conditions defined in Guide Exhibit 32.
54. Do I need a new user ID and password to access the HVE look-up tool?
    
    
    No. You may use your existing Loan Prospector user ID and password to access the HVE look-up tool on the secure pages of the Loan Prospector Web application. You will need to enter your user ID and password twice: once to log in to Loan Prospector and a second time to access the HVE look-up tool.
55. What information must be submitted to the HVE look-up tool to receive a point value estimate?
    
    
    You must submit the 9-digit Freddie Mac loan number to request a point value estimate.
56. For Relief Refinance Mortgage – Same Servicer, if the HVE point value does not support the value needed, may the Seller/Servicer obtain a new appraisal?
    
    
    If a Seller/Servicer uses HVE and receives a medium or high confidence level, they should use that value unless they have knowledge that the subject property may not have been properly evaluated by HVE. In this case, a new appraisal is recommended to determine value.
57. Can I use the high or low HVE value estimates instead of the HVE point value estimate for determining property value for Relief Refinance Mortgages – Same Servicer?
    
    
    No. Seller/Servicers must use the HVE point value estimate. Additionally, the HVE point value estimate must receive a medium or high confidence score to be eligible for use with the Relief Refinance Mortgage – Same Servicer or Relief Refinance Mortgage – Open Access.
58. What documentation are Seller/Servicers required to include in the mortgage file when they use an HVE point value estimate they receive from the look-up tool?
    
    
    A copy of the results page of the HVE point value estimate look-up tool is required for the mortgage file. As outlined in Chapter A24.3, the Seller/Servicer must retain a written copy of the HVE point value estimate in the Relief Refinance Mortgage – Same Servicer mortgage file. If HVE point value estimates are received for a group of mortgages in one report, a copy must be made of the applicable point value estimate, Forecast Standard Deviation, confidence score, and date of the estimate for each mortgage, and retained in the appropriate mortgage file.
59. Can I use HVE to estimate property values for Relief Refinance Mortgages regardless of LTV ratios?
    
    
    Yes. HVE point value estimates may be used to estimate property values for all Relief Refinance Mortgage – Same Servicer secured by 1-unit properties. Effective March 15, 2012, HVE point value estimates may be used for certain 1- to 2-unit properties for both Relief Refinances Mortgages – Same Servicer and Relief Refinances Mortgages – Open Access.
60. How do I access the HVE look-up tool if I am not a Loan Prospector user?
    
    
    You may sign up to become a Loan Prospector user. Alternatively, you can sign up to purchase HVE through one of Freddie Mac's approved distributors listed on FreddieMac.com.
61. Does the HVE look-up tool support batch requests?
    
    
    Yes. You may obtain HVE point value estimates for up to 500 loans in a single request. You must submit batch requests in an .XML file format, along with a valid email address. Batch requests are processed overnight.
62. How will I be notified when my HVE batch request is ready?
    
    
    Batch requests are processed overnight and are usually available within 24 hours. An email with the results is sent to the email address you provide with your batch request.

Delivery Fee Cap

63. On Exhibit 19 for Relief Refinance Mortgages with settlement dates on or after January 3, 2012, there is a 0.00 percent delivery fee cap for loans with LTV ratios over 80 percent and amortization terms less than or equal to 20 years. Does this mean there will be no Exhibit 19 fees assessed on those loans?
    
    
    Yes. For such loans, the cumulative total postsettlement delivery fees, including the Market Condition delivery fee, will be zero to encourage shorter amortization terms, allowing borrowers to build equity in their homes more quickly.
64. Are all delivery fees included in the delivery fee cap?
    
    
    Yes. Total delivery fees, including the Market Condition fee, will not exceed the applicable delivery fee cap for all Relief Refinance Mortgages.
65. Is the cash adjustor included in the delivery fee cap?
    
    
    No. The cash adjustor is not a delivery fee so it is not included in the delivery fee cap and must be accounted for separately.

Delivery and Execution Requirements

66. Are there any special delivery requirements for Relief Refinance Mortgages?
    
    

    When delivering Relief Refinance Mortgages you must:

    • Deliver the exact 9-digit Freddie Mac loan number for the mortgage being refinanced
    • Complete all required mortgage insurance fields
    • Deliver all required special characteristic codes (SCCs)
67. How do I deliver Relief Refinance Mortgages with LTV ratios greater than 105 percent under the Guarantor execution?
    
    
    These mortgages must be pooled separately and you must select specific security products in the selling system as follows: from the "Create Guarantor Contract" screen choose the following from the "Security Product" drop-down menu: 30 (20, 15) year Gold PC High LTV >105 - <= 125%. See Guide Exhibit 17S for additional information.

Cash Contracts

68. Can I commingle in the same Cash commitment Relief Refinance Mortgages with LTV ratios less than 105 percent and Relief Refinance Mortgages with LTV ratios greater than 105 percent?
    
    
    No. You must take out a separate Cash commitment for Relief Refinance Mortgages with LTV ratios greater than 105 percent.
69. How do I identify fixed-rate contracts for Relief Refinance Mortgages with LTV ratios greater than 105 percent and less than or equal to 125 percent?
    
    

    These mortgages must be identified by selecting one of the following options for the "LTV Range for the contract" field on the "Take Out Cash Contract" screen in the selling system:

    • LTV ratios greater than 105 percent and less than or equal to 115 percent: select ">105% - <=115%"
    • LTV ratios greater than 115 percent and less than or equal to 125 percent: select ">115%"
70. If I took out a contract for Relief Refinance Mortgages with LTV ratios greater than 105 percent, and the mortgages end up having LTV ratios less than 105 percent when I close them, do I need to pair out of the contract?
    
    
    Yes. You will need to pair out of the contract or substitute the mortgage with another loan(s).

Cash Adjustor

Note: The cash adjustor only applies to Relief Refinance Mortgages with LTV ratios greater than 105 percent that are sold to Freddie Mac for Cash.

71. Where can I find the Cash Adjustor?
    
    
    The Cash Adjustor value may change from time to time at Freddie Mac's discretion. Sellers can obtain the value of the Cash Adjustor by calling 800-FREDDIE, entering their customer number and select "delivery". The delivery agent will provide that day's Cash Adjustor value.
72. How will I know what the Cash Adjustor value is and when it will be applied?
    
    
    The Cash Adjustor amount for a particular mortgage will be determined as of the commitment "accept" date in the selling system. Freddie Mac will net that amount against the cash proceeds paid for the mortgage. It is the Seller’s responsibility to factor in the Cash Adjustor amount and any applicable delivery fees when making commitment decisions. At delivery, the net price will reflect all of the applicable delivery fees and the Cash Adjustor. Please note that the cash adjustor is not included in the delivery fee cap for Relief Refinance mortgages and must be accounted for separately.

Borrower Solicitation

73. I thought Guide Section 8.10 prohibited borrower solicitation. Under which circumstances can I solicit borrowers for a Relief Refinance Mortgage with an LTV ratio less than or equal to 80 percent?
    
    
    Sellers must comply with the broad-based refinance practices described in Guide Section 8.10 and may not intentionally target Freddie Mac-owned mortgages in advertising or implementing refinance terms.