1st Metropolitan Mortgage CEO, Daniel Jacobs and others are still assessing the details of the Homeowner Affordability & Stability plan to determine our next steps, but in the mean time we are trying to provide a summary of its major points so that it might help other to better understandable it.
So here we go:
The second part of the plan is a refinance program for existing Fannie Mae or Freddie Mac loans. Fannie Mae is offering two different programs:
- The Refi Plus Program that requires the servicer of the loan to be the originating lender.
- The DU Refi Plus Program (DU is the Automated Underwriting System for Fannie Mae) that allows any lender using DU to originate the loan as long as the existing loan is a Fannie Mae loan.
Freddie Mac requires the servicer of the loan to be the originating lender. Some specifics of the program are:
- Existing mortgage must currently be a Fannie or Freddie loan.
- Existing loan may not be considered ineligible (must get an Approved/Eligible from DU).
- Ineligible loans include existing mortgage loans that received a DU Expanded approval (EA).
- Maximum LTV for 1-2 unit properties is 105% and require an appraisal.
- Maximum LTV for 3-4 unit properties is 80% and also require an appraisal.
- No maximum CLTV.
- Existing mortgage must be current and have acceptable mortgage payment history. No minimum FICO score is required although borrower must meet bankruptcy and foreclosure requirements. In addition, borrower must demonstrate credit worthiness.
- Rate and term refinance only (No Cash Out) - purchase money seconds MAY Not be included.
- Loan level price adjustments (points) will apply (determined by credit score on credit report)
- MI required (same coverage factor of existing loan) for mortgage loans that had original LTV’s greater than 80%.
- DU Refi Plus must receive Approve/Eligible and will not be available until April 4. Income and employment verification is required.
- Refi Plus is a manual underwrite and requires verbal verification of employment. Lender must determine that the borrower has a reasonable ability to repay the mortgage based on current information provided by borrower.