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Relief Refinance Mortgage FAQs

The following answers to frequently asked questions about the Freddie Mac Relief Refinance MortgageSM 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, and Guide Chapter B24 for Relief Refinance Mortgages – Open Access.

General

  1. Are all lenders required to participate in the Home Affordable Refinance Program® (HARP)?

Mortgage and Property Type

  1. Why are Home Possible® Mortgages excluded from the Relief Refinance Mortgage offering?
  2. Are super conforming mortgages eligible for the Relief Refinance Mortgage offering?
  3. Are existing mortgages with prepayment penalities eligible to be refinanced with a Relief Refinance Mortgage?
  4. Is an existing Streamlined Refinance Mortgage eligible for the Relief Refinance Mortgage offerings?
  5. Is an existing Mortgage Revenue Bond (MRB) loan eligible for Relief Refinance Mortgage offerings?
  6. Why are ARMs with loan-to-value (LTV) ratios greater than 105 percent not eligible for Relief Refinance Mortgages?
  7. Why are 1/1 and 3/1 ARMs not eligible under the Relief Refinance Mortgage offering?
  8. Does the Relief Refinance Mortgage have to represent the same occupancy as the mortgage being refinanced?
  9. Can a Relief Refinance Mortgage be amortized for a period other than 15, 20, or 30 years?

General Underwriting Requirements

  1. Is there a maximum debt-to-income ratio requirement for Relief Refinance Mortgages – Open Access?
  2. Is unemployment compensation an eligible source of income for Relief Refinance Mortgages?
  3. Do borrower reserve requirements apply to Relief Refinance Mortgages?
  4. Are escrows required for Relief Refinance Mortgages?
  5. Is a new (or updated) flood certification required for Relief Refinance Mortgages?
  6. Does Freddie Mac have any maximum number of financed property requirement for Relief Refinance Mortgages?
  7. Under what circumstances can a borrower on the mortgage being refinanced be omitted from the Relief Refinance Mortgage?
  8. Can a borrower who is not on the mortgage being refinanced be added to the Relief Refinance Mortgage?
  9. Is a mortgage with a recent history of forbearance or a repayment plan meeting the requirements of Guide Section 68.5, as amended in Guide Bulletin 2012-26, eligible to be refinanced as a Relief Refinance Mortgage?

Indicator Scores

  1. Could a borrower who has a low credit score qualify for a Relief Refinance Mortgage?
  2. Could a borrower who does not have a usable credit score due to insufficient or inaccurate information qualify for a Relief Refinance Mortgage?
  3. Do I have to deliver an Indicator Score for Relief Refinance Mortgages – Same Servicer in instances where I do not have to requalify the borrower?

Closing Costs

  1. How may excess proceeds from a Relief Refinance Mortgage transaction be used?
  2. 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?
  3. Is any documentation required when excess proceeds from a Relief Refinance Mortgage transaction are applied as a principal curtailment at closing?
  4. Do I have to document the source of closing costs paid by the borrower for Relief Refinance Mortgages?
  5. Can a borrower elect a higher interest rate for the Relief Refinance Mortgage and apply the premium financing toward closing costs, financing costs and prepaids/escrows?

Secondary Financing

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

Principal and Interest Payment

  1. 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 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?
  2. 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.

  1. Will Loan Prospector automatically identify mortgages eligible for the Relief Refinance Mortgage – Open Access, or will I need to choose this option?
  2. Are mortgages submitted through Loan Prospector that receive an Ineligible, Incomplete or Invalid eligible for the Relief Refinance Mortgage – Open Access?
  3. For Relief Refinance Mortgages - Open Access submitted to Loan Prospector on or after March 11, 2012, will Loan Prospector automatically calculate the LTV/TLTV/HTLTV based on the HVE value provided in the Loan Prospector Feedback Certificate?

Mortgage Insurance

  1. Is mortgage insurance required on the Relief Refinance Mortgage?
  2. 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?
  3. If an existing mortgage has lender-paid mortgage insurance (LPMI), is it eligible under the Relief Refinance Mortgage offering?

Collateral Assessment

  1. Is obtaining an exterior-only appraisal acceptable for determining property value for Relief Refinance Mortgages?
  2. For the new Relief Refinance Mortgage, will I only be relieved of the representations and warranties for value, condition, and marketability of the property when I obtain a usable HVE point value estimate?
  3. What are Freddie Mac’s property valuation requirements for Relief Refinance Mortgages secured by properties located in areas affected by disasters?

Home Value Explorer®

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

  1. What is Home Value Explorer (HVE®)?
  2. Can I use HVE for all Relief Refinance Mortgages?
  3. Can you explain the HVE data fields?
  4. How do I access HVE to obtain the value of the property for the Relief Refinance Mortgage – Same Servicer?
  5. Do I need a new user ID and password to access the HVE look-up tool?
  6. What information must be submitted to the HVE look-up tool to receive a point value estimate?
  7. 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?
  8. 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?
  9. If a Seller/Servicer has several HVE point value estimates that are dated within 120 days as of the note date, which HVE point value should be used?
  10. Is the Loan Prospector Feedback Certificate for Relief Refinance Mortgages – Open Access or the look-up tool for Relief Refinance Mortgages – Same Servicer the only methods I can use to obtain an HVE value?
  11. If I do not get a HVE value does this mean I can't originate the loan?
  12. How do I access the HVE look-up tool if I am not a Loan Prospector user?

Delivery Fee Cap

  1. 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?
  2. Are all delivery fees included in the delivery fee cap?
  3. Is the cash adjustor included in the delivery fee cap?

Delivery and Execution Requirements

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

Cash Contracts

  1. 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?
  2. How do I identify fixed-rate contracts for Relief Refinance Mortgages with LTV ratios greater than 105 percent?
  3. 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

  1. What is the Cash Adjustor value?

Borrower Solicitation

  1. 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?

Representation and Warranty Framework

  1. How does the representation and warranty framework outlined in Guide Section 6.14 apply to Relief Refinance Mortgages?

General

  1. 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

  1. 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, IFI 583 (mortgage with an Affordable Second) must be delivered with the new Relief Refinance Mortgage.
  2. 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.
  3. Are existing mortgages with prepayment penalities eligible to be refinanced with a Relief Refinance Mortgage?
    The existing mortgage can have a prepayment penalty, but the Relief Refinance Mortgage may not have a prepayment penalty.
  4. 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.
  5. 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.
  6. Why are ARMs with loan-to-value (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.
  7. 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).
  8. Does the Relief Refinance Mortgage have to represent the same occupancy as the mortgage being refinanced?
    No. Effective for Relief Refinance Mortgages – Same Servicer with Application Received Dates on or after November 19, 2012, the mortgage being refinanced and the new Relief Refinance Mortgage do not have to represent the same occupancy. For occupancy requirements for Relief Refinance Mortgage-Same Servicer with LTV ratios less than or equal to 80 percent and Application Received Dates prior to November 19, 2012, refer to Guide Section C24.3.
  9. 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 Chapter A24 or B24 as applicable.

General Underwriting Requirements

  1. 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, provided the mortgage is not a Higher-Priced Covered Transaction  (HPCT) or Higher-Priced Mortgage Loan (HPML) with an Application Received Date on or after January 10, 2014.

    For Accept Mortgages and A-minus Mortgages that are HPCTs or HPMLs with Application Received Dates on or after January 10, 2014, the Seller must ensure that the debt payment-to-income ratio is not greater than 45 percent, regardless of the risk class.

    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.

  2. Is unemployment compensation an eligible source of income for Relief Refinance Mortgages?
    Yes. For Relief Refinance Mortgages, Sellers are not required to make a determination that income, including public assistance, is expected to continue for at least three years. Therefore, unemployment compensation, which is a type of public assistance, is an eligible income source under Guide Sections A24.3 and B24.3.
  3. Do borrower reserve requirements apply to Relief Refinance Mortgages?

    For Relief Refinance Mortgages – Same Servicer, borrower reserve requirements are not applicable. Sellers may opt to verify reserves equal to 12 monthly payments of PITI for the new refinance mortgage in lieu of verifying an income source, provided the mortgage is not a mortgage with a P&I payment increase between the current and new payment of more than 20 percent or an HPCT or HPML with an Application Received Date on or after January 10, 2014.

    For Relief Refinance Mortgages – Open Access, borrower reserve requirements must be met, as applicable.

  4. Are escrows required for Relief Refinance Mortgages?
    Our normal escrow requirements apply to Relief Refinance Mortgages as defined in Guide Section 59.1.
  5. 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.
  6. Does Freddie Mac have any maximum number of financed property requirement for Relief Refinance Mortgages secured by investment properties or second homes?
    No. For the new Relief Refinance Mortgage secured by an investment property or a second home, Sellers are not required to represent and warrant the requirements related to the number of finance properties in Guide Subsections 22.22(b)(2) and 22.22.1(c), respectively.
  7. 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). Effective on November 19, 2012, we no longer require that the omitted borrower be removed from the deed and not have an ownership interest in the mortgaged premises. In all cases, at least one borrower(s) from the mortgage being refinanced must be 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, or
    • The remaining borrower(s) must qualify for the mortgage based on the requirements for mortgages with a P&I payment increase in Guide Section A24.3(h), or
    • In the case of death, the Seller must obtain and retain in the mortgage file documentation of the borrower’s death.
  8. 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.
  9. Is a mortgage with a recent history of forbearance or a repayment plan meeting the requirements of Guide Section 68.5, as amended in Guide Bulletin 2012-26, eligible to be refinanced as a Relief Refinance Mortgage?
    The mortgage may be eligible to be refinanced as a Relief Refinance Mortgage provided it is brought current prior to the note date and all other Relief Refinance Mortgage requirements are met. To bring the loan current, the borrower must remit sufficient funds to pay all outstanding arrearages through reinstatement or completion of a repayment plan. A borrower to whom forbearance or a repayment plan is extended under Guide Section 68.5 because of disaster related circumstances must not be reported to credit repositories.

Indicator Scores

  1. Could a borrower who has a low credit score qualify for a Relief Refinance Mortgage?
    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 or if the Relief Refinance Mortgage is a Higher-Priced Covered Transaction  (HPCT) or Higher-Priced Mortgage Loan (HPML) with an Application Received Date on or after January 10, 2014, in which case a minimum Indicator Score of 620 is required.

    For Relief Refinance Mortgage – Open Access, the loan must be submitted to Loan Prospector. The borrower’s credit reputation is acceptable if the mortgage receives a Risk Class of Accept, or Caution eligible for A-minus, provided the mortgage is not an HPCT or HPML with an Application Received Date on or after January 10, 2014. Refer to Guide Section B24.3(d)(i) for the requirements specific to HPCTs and HPMLs.

    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).
  2. Could a borrower who does not have a usable credit score due to insufficient or inaccurate information qualify for a Relief Refinance Mortgage?

    For Relief Refinance Mortgages – Open Access, if the Seller determines that there is no usable credit score due to insufficient information or inaccurate information, the mortgage is not eligible.

    For Relief Refinance Mortgages – Same Servicer, unless a minimum Indicator Score is required (see Guide Section A24.3(h)), if the Seller determines that there is no usable credit score due to insufficient information or inaccurate information, the mortgage may be eligible for purchase. Refer to Guide Sections 37.5(f) and 17.14 for Indicator Score delivery requirements.

  3. Do I have to deliver an Indicator Score for Relief Refinance Mortgages – Same Servicer in instances where I do not have to requalify the borrower?
    Yes. The Seller must identify and deliver an Indicator Score for all Relief Refinance Mortgages – Same Servicer in accordance with the requirements of Guide Section 37.5(e).

Closing Costs

  1. 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.
  2. 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.
  3. 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.
  4. Do I have to document the source of closing costs paid by the borrower for Relief Refinance Mortgages?
    The Seller must verify borrower funds needed for closing costs according to the applicable requirements in Guide Sections A24.3 for Relief Refinance Mortgages – Same Servicer,  and B24.3 for Relief Refinance Mortgages – Open Access.
  5. Can a borrower elect a higher interest rate for the Relief Refinance Mortgage and apply the funds from premium financing 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 financing toward closing costs, financing costs and prepaids/escrows.

Secondary Financing

  1. When refinancing a junior lien to the Relief Refinance Mortgage, does the home equity line of credit 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.
  2. Can the unpaid principal balance amount of the existing junior lien increase?
    No, the unpaid principal balance of the new junior lien may not be more than the unpaid principal balance, at the time of payoff, of the junior lien being refinanced.

Principal and Interest Payment

  1. 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 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.
  2. 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?
    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.

Loan Prospector®

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

  1. 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.
  2. 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.
  3. For Relief Refinance Mortgages – Open Access submitted to Loan Prospector on or after March 11, 2012, will Loan Prospector automatically calculate the LTV/TLTV/HTLTV based on the HVE value provided in the Loan Prospector Feedback Certificate?
    No. Loan Prospector will calculate the LTV/TLTV/HTLTV using the value that was entered by the user. You will need to input into Loan Prospector the value obtained from the property valuation method used (just as you do today), and resubmit to Loan Prospector.

Mortgage Insurance

  1. 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.
  2. 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.
  3. 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 to determine if the mortgage insurer will permit the transfer of LPMI or have different rules for loans with LPMI.

Collateral Assessment

  1. 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 Seller’s Purchase Documents, including the requirements outlined in Guide Subsection A24.3(d) or B24.2(g), as applicable.
  2. For the new Relief Refinance Mortgage, will I only be relieved of the representations and warranties for value, condition, and marketability of the property when I obtain a usable HVE point value estimate? 
    No. Effective September 14, 2012, Sellers that obtain an appraisal to determine the property valuation are also relieved of these representations and warranties. In addition, if an appraisal is obtained:
    • Freddie Mac will accept an appraisal with a UAD property condition rating of C5 or C6 and/or a UAD quality rating of Q6 completed on an "as is" basis.
    • The Seller is not responsible for the completeness and accuracy of the appraiser’s description of the mortgaged premises, and the accuracy of, and support for, the appraiser’s opinion of market value of the mortgage premise
  3. What are Freddie Mac’s property valuation requirements for Relief Refinance Mortgages secured by properties located in areas affected by disasters?

     In Guide Bulletin 2012-24 Freddie Mac announced revisions to its property valuation requirements for a Relief Refinance Mortgage secured by a property in an area affected by a disaster.

    Notwithstanding the recommended steps listed in Section 44.2(c), for Relief Refinance Mortgages secured by properties in areas affected by disasters:

    • A Seller is not required to obtain a property inspection or new appraisal when a property valuation (either a HVE point value estimate or an appraisal) was relied on prior to a disaster, provided the mortgage meets the requirements of Guide Chapter 58, Property Insurance; and
    • A Seller can use a HVE point value estimate with a high or medium confidence score after a disaster without obtaining a property inspection or appraisal to determine property condition, provided that the mortgage meets the requirements of Guide Chapter 58, Property Insurance.

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.

  1. 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.
  2. Can I use HVE for all Relief Refinance Mortgages?
    Sellers may use HVE data for Relief Refinance Mortgages – Same Servicer and Relief Refinance Mortgages – Open Access to determine property values for certain 1-unit and 2-unit properties. Sellers must review the HVE point value estimate and determine whether it meets the requirements of the program.
  3. 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.
  4. 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.
  5. 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.
  6. 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.
  7. 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.
  8. 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.
  9. If a Seller/Servicer has several HVE point value estimates that are dated within 120 days as of the note date, which HVE point value should be used?
    We do not prescribe which HVE point value estimate must be used in this scenario provided that all applicable requirements are met (e.g., the value used is no more than
    120–days old as of the note date, the Forecast Standard Deviation must not be greater than 0.200, the Seller must maintain the HVE point value estimate and any information necessary to evidence compliance with the HVE requirements, and the Seller must provide a copy of the HVE documentation upon Freddie Mac's request).
  10. Is the Loan Prospector Feedback Certificate for Relief Refinance Mortgages – Open Access or the look-up tool for Relief Refinance Mortgages – Same Servicer the only methods I can use to obtain an HVE value?
    Sellers may use the HVE point value estimate from a distributor provided that the HVE point value estimate meets the applicable requirements of the Relief Refinance Mortgage offering.For Relief Refinance Mortgages – Open Access, Sellers need to make sure the property value used to originate the mortgage is submitted to Loan Prospector.
  11. If I do not get a HVE value does this mean I can't originate the loan?
    No. Our requirements permit two options to determine property value: the use of HVE or a new appraisal.
  12. 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.

Delivery Fee Cap

  1. 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.
  2. 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.
  3. 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

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

    Yes. 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
    • Refer to Guide Section A24.4 for special delivery requirements for Relief Refinance Mortgages – Same Servicer and Guide Section B24.4 for special delivery requirements for Relief Refinance Mortgages – Open Access
  2. 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

  1. 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.
  2. How do I identify fixed-rate contracts for Relief Refinance Mortgages with LTV ratios greater than 105 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: select ">115%"
  3. 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

  1. What is the cash adjustor value?
    The cash adjustor for Relief Refinance Mortgages applies only to loans with LTV ratios greater than 105 percent sold under fixed-rate Cash. The cash adjustor values may change at any time at Freddie Mac’s discretion. The current cash adjustor value matrix, Cash Adjustor for Relief Refinance Mortgages, is available through the selling system welcome page.

Borrower Solicitation

  1. 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. For Relief Refinance Mortgages – Same Servicer with LTV ratios greater than 80 percent, refer to the refinance solicitation and advertising provisions of Guide Subsection A24.2(b)(i).

Representation and Warranty Framework

  1. How does the representation and warranty framework outlined in Guide Section 6.14 apply to Relief Refinance Mortgages?

    Under Version 1 of the framework, we will not exercise our remedies for breaches of certain representation and warranty if the Relief Refinance Mortgage has an acceptable payment history and meets other eligibility requirements.

    Under Version 2, a Relief Refinance Mortgage may obtain relief from certain selling representations and warranties based either on the borrower’s acceptable payment history, or a satisfactory conclusion of a Freddie Mac quality control review.

    Review our side-by-side comparison of Version 1 and Version 2 eligibility requirements for Relief Refinance Mortgages.

Home Affordable Refinance Program® is a registered trademark of the U.S. Department of Treasury.

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