In Texas, many people have been trying to take advantage of the new Making Home Affordable refinance plan and have been frustrated because they have been “forced” to use their current lender because their loan is owned by Freddie Mac.
When the Making Home Affordable refinance plan details were announced in April, anyone who wanted to refinance their home in Texas had to first discover who owned their loan first — Fannie Mae or Freddie Mac. If Fannie Mae owned their loan, they were free to use any Fannie Mae approved lender to refinance their home and take advantage of lower rates. If Freddie Mac owned their loan, they were required by Freddie Mac to use their current lender to refinance.
As a result of being required to use their current servicer, many people have experienced sub-par levels of customer service.
Not any more.
The recent announcement from Freddie Mac opened it up so that if you live in Texas and have a loan that is owned by Freddie Mac, you are free to use any Freddie Mac approved lender that you would like. Although it will be a little more difficult to actually get your loan done if you go outside of your current servicer, it is at least possible.
According to Freddie Mac Executive Vice President Don Bisenius:
“We are responding to consumers’ desires to have more refinancing options. As an added benefit, we are expanding the program and providing greater flexibility in financing closing costs. Freddie Mac is committed to doing everything we can to bring the benefits of the Administration’s Making Home Affordable program to as many borrowers as possible.”
There are some key elements to the Freddie Mac statement — where it outlines the “conditions” that need to be present in order to go with someone other than your current lender:
- Borrowers can continue to work with their existing servicer to refinance their mortgage. In the vast majority of these cases, the current servicer will not have to re-underwrite the borrower.
- If the borrower chooses to work with another Freddie Mac-affiliated lender, the mortgage will need to be re-underwritten.
- Freddie Mac will allow the lesser of 4 percent of the new refinance mortgage amount or $5,000 of closing costs, financing costs and prepaids/escrows to be rolled into the new refinance mortgage.
- Freddie Mac’s standard post settlement delivery fees, up to a maximum of 2 percent, will apply to the Relief Refinance Program.
No matter where you live in Texas, if you have a loan that is owned by Freddie Mac, you can now participate in the Obama refinance program with any Freddie Mac approved lender.
