Relief Refinance Mortgages – Open Access

• The mortgage being refinanced must:
  • Be a first-lien, conventional mortgage currently owned or securitized by Freddie Mac.
  • Have a Freddie Mac settlement date on or before May 31, 2009.
  • Be seasoned for at least three months.
• The Servicer of the mortgage being refinanced may be any Freddie Mac-approved Servicer.
• If the mortgage being refinanced has mortgage insurance or mortgage pool insurance, it is eligible for refinancing. See Guide Chapter B24.3 (h) for requirements.
• If the mortgage being refinanced has recourse, indemnification, or other credit enhancements defined in Guide Chapter B24, it is ineligible to be refinanced as a Relief Refinance Mortgage – Open Access.

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, or
• Reduction in the amortization term of the first lien mortgage.
• Reduction in the monthly principal and interest payment of the first lien.

Relief Refinance Mortgages – Open Access must be:

• Conventional 15-, 20- or 30-year fixed-rate, fully amortizing mortgages.
• Conventional nonconvertible 5/1, 7/1 or 10/1 fully amortizing adjustable-rate mortgages (ARMs)  
• The Relief Refinance Mortgages – Open Access may be super conforming mortgages.
• If the mortgage being refinanced is a fixed-rate mortgage, the new Relief Refinance Mortgage – Open Access may not be an ARM.

• 1- to 4-unit primary residences.
• 1-unit second homes.
• 1- to 4-unit investment properties.

• Flexibility in the use of refinance proceeds depending on the LTV ratio of the Relief Refinance Mortgage – Open Access
• In the event there are remaining proceeds from the Relief Refinance Mortgage – Open Access after the proceeds are applied as described in section B24.3(b):
  • The mortgage amount must be reduced, or
  • The excess amount must be applied as a principal curtailment to the new refinance mortgage at closing and must be clearly reflected on the HUD-1 form or other equivalent closing statement.
• The proceeds may not be used to pay off or pay down any junior liens.
• Under no circumstances may cash disbursed to the borrower (or any other payee) exceed the maximum permitted.

• There is no maximum LTV ratio for fixed-rate mortgages.
• The maximum LTV ratio for ARMs is 105 percent.
• There are no maximum TLTV/HTLTV ratios.

See "Eligible Executions" for Cash and Guarantor executions and the effective dates. 

For an LTV ratio greater than 80 percent:

• If the mortgage being refinanced has mortgage insurance coverage, then the same mortgage insurance coverage percentage must be maintained for the Relief Refinance Mortgage – Open Access.
• If the mortgage being refinanced does not have mortgage insurance, then no mortgage insurance coverage is required for the Relief Refinance Mortgage – Open Access.
• Refer to Guide Chapter B24.4 for special delivery requirements related to mortgage insurance for Relief Refinance Mortgages – Open Access.

• Must be fully underwritten and submitted to Loan Prospector.
• Relief Refinance Mortgages – Open Access with a risk class of Caution and no A-minus eligible purchase eligibility message must be manually underwritten in accordance with Guide Chapter 37 and B24.
• Noncredit payment references are prohibited and may not be used to establish an acceptable credit reputation.
• A borrower on the mortgage being refinanced may be omitted from the Relief Refinance Mortgage for any reason, provided that the omitted borrower is removed from the deed and does not retain any ownership interest in the mortgaged premises.
• A borrower who is not on the mortgage being refinanced may be added, provided at least one of the existing borrower(s) is retained. A non-occupying borrower may not be added to a mortgage secured by a primary residence.

• The Seller may use Home Value Explorer® (HVE) or a new appraisal to determine property value
• HVE may be used for certain 1- to 2-unit properties for Loan Prospector submissions on or after March 15, 2012. See Guide Section B24.3(g) for detailed requirements on the use of HVE. In connection with the use of HVE:
  • The Seller is relieved of representations and warranties for the value, condition and marketability of the mortgaged premises provided that, as of the settlement date, the Seller is not aware of any circumstances or conditions that would adversely affect the value, condition or marketability of the mortgaged premises.
  • The date of the HVE estimate (HVE Value Date) must be no more than 120 days as of the note date.
• If a new appraisal is obtained, the Seller must obtain a full interior/exterior appraisal that meets the requirements of Guide Chapter 44.
  • Sellers are required to provide certain representation and warranties related to the appraisal, including representations and warranties on the value, condition and marketability of the property for the refinance mortgage.
  • For super conforming Relief Refinance Mortgages – Open Access, the special appraisal and collateral documentation requirements in Guide Chapter L 33.6 apply.

• Existing junior liens may be refinanced simultaneously with the first mortgage provided the junior lien is being refinanced for one of the following purposes:
  • A reduction in the interest rate of the junior lien.
  • To replace an ARM, an interest-only junior lien, or a junior lien with a balloon or call option with a fixed-rate, fully amortizing junior lien.
  • A reduction in the amortization term of the junior lien.
  • A reduction in the monthly payment of the junior lien.
• The unpaid principal balance of the new junior lien cannot be more than the unpaid principal balance, at the time of payoff, of the junior lien being refinanced.
• If the junior lien being refinanced is a fixed-rate junior lien, the new junior lien cannot be an ARM.
• An existing junior lien must be subordinate to the Relief Refinance Mortgage – Open Access, regardless of whether the junior lien is refinanced simultaneously with the first mortgage.
  • An increase in the current unpaid principal amount of any junior lien is permitted for any reason not related to the Relief Refinance Mortgage transaction.
  • No new secondary financing is permitted.

• Must be sold through the selling system.
• Must be delivered to Freddie Mac no more than 120 days after the note date.
• The Seller must deliver all applicable Special Characteristic Codes (SCCs), including:
  • SCC H08 – Relief Refinance Mortgages – Open Access
  • SCC 007 – "No cash-out" refinance mortgage
  • SCC H03 – HVE point value estimate to determine value, if applicable
• If mortgage insurance is being transferred from the mortgage being refinanced, Sellers must enter the existing mortgage insurance certificate or, if applicable, the replacement certificate number and existing percentage of coverage for the mortgage being refinanced for the Relief Refinance Mortgage – Open Access.
• For Relief Refinance Mortgages – Open Access with LTV ratios greater than 80 percent, the Seller must complete the MI Code field on Form 11 or 13SF if the mortgage has mortgage insurance coverage. The Seller must deliver the MI code that identifies the Freddie Mac approved mortgage insurer that is insuring the mortgage in the MI Code field, as well as completing the other mortgage insurance-related fields.
• Seller must deliver the Freddie Mac loan number of the existing mortgage with the new refinance mortgage.

• Applicable postsettlement delivery fees from Guide Exhibit 19 apply.
• For mortgages with LTV ratios less than or equal to 80 percent, the total of all delivery fees is capped at 200 basis points.
• For mortgages with LTV ratios greater than 80 percent, the following delivery caps must be applied:
  • Zero basis points for non-investment property fixed-rate mortgages with amortization terms of less than or equal to 20 years.
  • 75 basis points for non-investment property fixed-rate mortgages with amortization terms of greater than 20 years.
  • 75 basis points for non-investment property mortgages that are adjustable-rate mortgages (ARMs)
  • 200 basis points for investment properties

• All Relief Refinance Mortgages may be sold to Freddie Mac through the following executions:
  • Fixed-rate Cash
  • Fixed-rate Guarantor
• Relief Refinance Mortgages with LTV ratios less than or equal to 105 percent may also be sold to Freddie Mac through the following executions:
  • WAC ARM Cash
  • WAC ARM Guarantor
  • MultiLender Swap
• Relief Refinance Mortgages – Open Access with LTV ratios less than or equal to 105 percent may be sold to Freddie Mac through the selling system servicing-released sales process.
• Fixed-rate mortgages with LTV ratios greater than 125 percent must have application dates on or after December 1, 2011 and the following Freddie Mac settlement dates:
  • On or after March 15, 2012 for fixed-rate Cash
  • On or after June 1, 2012 for fixed-rate Guarantor
• Sellers must take out separate fixed-rate contracts based on the specific LTV range for the contract.
  • To identify these fixed-rate cash contracts, choose the appropriate range using the "LTV Range for the Contract" field located on the "Take Out Cash Contract" screen in the selling system. Select:
    • ">105% - <=115%" for LTV ratios greater than 105 percent and less than or equal to 115 percent.
    • ">115%" for LTV ratios greater than 115 percent and less than or equal to 125 percent.
  • A cash adjustor applies to all Relief Refinance Mortgages with LTV ratios greater than 105 percent that are sold to Freddie Mac for cash. This cash adjustor amount will change from time to time at Freddie Mac's discretion; the cash adjustor applicable to a particular mortgage will be determined as of the commitment date and will be reflected in the cash pricing shown in the selling system once the Seller allocates mortgages to the contract.
  • To obtain the cash adjustor value, prior to taking out a commitment in the selling system, please call 800-FREDDIE, enter your Seller/Servicer number, and select "delivery." The delivery agent will provide the day’s cash adjustor value.

• All current pooling requirements apply including the specific requirements for super conforming mortgages.
• Fixed-rate and adjustable-rate Relief Refinance Mortgages with LTV ratios less than or equal to 105 percent may be pooled with other mortgages without additional pooling requirements.
• Fixed-rate Relief Refinance Mortgages with LTV ratios greater than 105 percent must be pooled separately in PC pools comprised entirely of Relief Refinance Mortgages with LTV ratios greater than 105 percent. These PC pools are not eligible for sale in the TBA market.*

• For complete Relief Refinance Mortgage – Open Access requirements see Guide Chapter B24.

• Relief Refinance Mortgages – Open Access must:
  • Have a note date on or before December 31, 2013.
  • Be delivered not more than 120 days after the note date.
  • Refer to Timeline of Changes for Freddie Mac Relief Refinance Mortgages on FreddieMac.com.