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Cash Adjustor No Longer Applied for Certain Relief Refinance Mortgages

March 30, 2012

To assist you in your efforts to reach more qualified borrowers using the Freddie Mac Relief Refinance MortgageSM, a portion of which is our business implementation of the Home Affordable Refinance program (HARP), today we are announcing a change in the cash adjustor.

Sell & Deliver

For Relief Refinance Mortgages sold under Fixed-Rate Cash commitments dated on or after April 1, 2012, we no longer will apply the cash adjustor for loan-to-value (LTV) ratios greater than 105 percent and less than or equal to 125 percent. The current cash adjustor applies to Relief Refinance Mortgages sold under Fixed-Rate Cash with LTV ratios greater than 105 percent. As part of your support of the HARP program, you are encouraged to pass on the benefit of this change to your borrowers.

The Single-Family Seller/Servicer Guide (Guide) will be updated to reflect this change with a future Guide Bulletin.

In addition, until further notice, the cash adjustor for Relief Refinance Mortgages sold under Fixed-Rate Cash with LTV ratios greater than 125 percent will remain at the current 50 basis points (bps). You will be provided written notification in advance of any future changes to the cash adjustor value.

Reminder: Current Cash Adjustor

The current cash adjustor for Relief Refinance Mortgages is 50 bps. This fee applies to Relief Refinance Mortgages sold under Fixed-Rate Cash commitments dated on or after April 1, 2012, with LTV ratios greater than 125 percent. (For Relief Refinance Mortgages sold under Fixed-Rate Cash commitments dated January 3 - March 31, 2012, the cash adjustor applies to LTV ratios greater than 105 percent.)

The cash adjustor will be reflected in the cash pricing shown in the selling system once the Seller allocates the mortgage to the contract. As a reminder, since the cash adjustor is not a delivery fee, it is not subject to the Relief Refinance Mortgage delivery fee cap.

In addition to being provided written communication in advance of any future changes to the current 50 bps cash adjustor, the option to contact 800-FREDDIE to check the most current value still is available to you. The process to obtain the current cash adjustor is as follows:

  • Call 800-FREDDIE.
  • Select “1” for Freddie Mac Seller/Servicers.
  • Select “3” for selling system or loan delivery scenarios.
  • Select "2" for all other delivery or selling system assistance (enter 6-digit Seller/Servicer number).

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