The Veridian Blog

Today, the Obama administration launched what it calls the “Making Home Affordable” initiative.  Borrowers will have to provide their most recent tax return and two pay stubs, as well as an “affidavit of financial hardship” to qualify for the $75 billion loan modification program, which runs through 2012.
Borrowers are only allowed to have their loans modified once, and the program only applies for loans made on Jan. 1 2009 or earlier. Up to 4 million borrowers are expected to qualify. Mortgages for single-family properties that have balances that exceed $729,750 are excluded.

The new Freddie Mac Relief Refinance Mortgage is designed to assist borrowers who are current on their mortgage payments but who would benefit from refinancing into mortgages with terms that better position them for long-term homeownership.  To qualify, borrowers must have mortgages that are owned or guaranteed by Freddie Mac.

Eligible borrowers can use Relief Refinance Mortgages to improve their position for long term homeownership success by reducing their current mortgage interest rate or shortening the amortization term.  Similarly, the Relief Refinance Mortgage can be used to replace an adjustable rate mortgage, an interest-only mortgage or balloon/reset mortgage with a 15-, 20- or 30-year fixed-rate mortgage. 

The loan-to-value ratio on Relief Refinance Mortgages can be as high as 105 percent of the property's value.  There is no maximum combined LTV ratio, however Relief Refinance Mortgages cannot be used to payoff or reduce subordinate liens.  What's more, existing liens must continue to be subordinate to the Relief Refinance Mortgages.

Borrowers interested in learning more about the Freddie Mac Relief Refinance Mortgage or the Home Affordable Modification program should contact their mortgage servicer.  Borrowers should also contact their servicer to find out if Freddie Mac owns or guarantees their mortgage.