Relief Refinance Mortgages – Open Access

• The mortgage being refinanced must:
  • Be a first-lien, conventional mortgage currently owned or securitized by Freddie Mac.
  • Have a Freddie Mac settlement date on or before May 31, 2009.
  • Be seasoned for at least three months.
• Seller or an affiliate of the Seller originating the new mortgage may or may not be the Servicer of the mortgage being refinanced.
• If the mortgage being refinanced was sold to Freddie Mac with mortgage insurance, it is eligible for refinancing. See Guide Chapter B24 (h) for requirements.
• If the mortgage being refinanced was sold to Freddie Mac with recourse and indemnification, or other credit enhancements defined in Guide Chapter B24, it is ineligible to be refinanced as a Relief Refinance Mortgage – Open Access.

• No 30-day or more delinquencies in the past 12 months.
• If mortgage is less than 12 months old, then no 30-day or more delinquencies since the note date.

The Relief Refinance Mortgage must result in at least one of the following:

• Reduction in the interest rate of the first lien mortgage,
• Replacement of an ARM, Initial Interest® Mortgage (or any mortgage with an interest-only period) or a balloon/reset mortgage with a fixed-rate, fully amortizing mortgage, or
• Reduction in the amortization term of the first lien mortgage.

Relief Refinance Mortgages – Open Access may be:

• Conventional 15-, 20- or 30-year fixed-rate, fully amortizing mortgages.
• Conventional nonconvertible 5/1, 7/1 or 10/1 fully amortizing adjustable-rate mortgages (ARMs) provided the LTV ratio does not exceed 105 percent.

Notes: 

• Relief Refinance Mortgages – Open Access may be super conforming mortgages.
• If the mortgage being refinanced is a fixed-rate mortgage, the new Relief Refinance Mortgage – Open Access may not be an ARM.

• 1- to 4-unit primary residences.
• 1-unit second homes.
• 1- to 4-unit investment properties.

• The proceeds of the Relief Refinance Mortgage – Open Access must be used only to:
  • Pay off the first mortgage (amount includes the unpaid principal balance and accrued interest through the payoff date). The payoff amount can be rounded up to the nearest thousand.
  • Pay the lesser of 4 percent of the current unpaid principal balance of the mortgage being refinanced or $5,000 in related closing costs, financing costs and prepaids/escrows.
• Funds available as a result of the rounding must be:
  • Applied as a principal curtailment to the refinance mortgage and/or
  • Disbursed as cash to the borrower not to exceed $250.
• The proceeds may not be used to pay off or pay down any secondary financing.

• The maximum LTV ratio must not exceed 125 percent.
• There is no maximum TLTV or HTLTV ratio.

For an LTV ratio greater than 80 percent:

• If the mortgage being refinanced has mortgage insurance coverage, then the same mortgage insurance coverage percentage must be maintained for the Relief Refinance Mortgage – Open Access.
• If the mortgage being refinanced does not have mortgage insurance, then no mortgage insurance coverage is required for the Relief Refinance Mortgage – Open Access.
• Refer to Guide Chapter B24.4 for special delivery requirements related to mortgage insurance for Relief Refinance Mortgages – Open Access.

• Must be fully underwritten and submitted to Loan Prospector.
• Relief Refinance Mortgages – Open Access with a risk class of Caution and no A-minus eligible purchase eligibility message must be manually underwritten in accordance with Guide Chapter 37 and B24.
• Noncredit payment references are prohibited and may not be used to establish an acceptable credit reputation.

• A full interior/exterior appraisal that meets the requirements of Guide Chapter 44 is required.
• Sellers are required to provide certain representation and warranties related to the appraisal, including representations and warranties on the value, condition and marketability of the property for the refinance mortgage.
• For super conforming Relief Refinance Mortgages – Open Access, the special appraisal and collateral documentation requirements in Guide Chapter L 33.6 apply.
• Use of Home Value Explorer® is not permitted.

• Any Freddie Mac-approved Seller/Servicer originating a Relief Refinance Mortgage may refinance existing junior liens simultaneously with the first mortgage provided the junior lien is being refinanced for one of the following purposes:
  • A reduction in the interest rate of the junior lien.
  • To replace an ARM, an interest-only junior lien, or a junior lien with a balloon or call option with a fixed-rate, fully amortizing junior lien.
  • A reduction in the amortization term of the junior lien.
• The unpaid principal balance of the new junior lien cannot be more than the unpaid principal balance, at the time of payoff, of the junior lien being refinanced.
• If the junior lien being refinanced is a fixed-rate junior lien, the new junior lien cannot be an ARM.
• If the junior lien is not being refinanced simultaneously with the first mortgage, the existing junior lien must be subordinate to the Relief Refinance Mortgage – Same Servicer.
  • An increase in the current unpaid principal amount of any junior lien is not permitted and no new secondary financing is permitted

• Must be sold through the selling system.
• Must be delivered to Freddie Mac no more than 120 days after the note date.
• The Seller must deliver all applicable Special Characteristic Codes (SCCs), including:
  • SCC H08 – Relief Refinance Mortgages – Open Access
  • SCC 007 – "No cash-out" refinance mortgage
• If mortgage insurance is being transferred from the mortgage being refinanced, Sellers must enter the existing mortgage insurance certificate or, if applicable, the replacement certificate number and existing percentage of coverage for the mortgage being refinanced for the Relief Refinance Mortgage – Open Access.
• For Relief Refinance Mortgages – Open Access with LTV ratios greater than 80 percent, the Seller should complete the MI Code field on Form 11 or 13SF if the mortgage has mortgage insurance coverage. The Seller must deliver the MI code that identifies the Freddie Mac approved mortgage insurance that is insuring the mortgage in the MI Code field, as well as completing the other mortgage insurance-related fields.
• Seller must deliver the Freddie Mac loan number of the existing mortgage with the new refinance mortgage.

• Applicable postsettlement delivery fees from Guide Exhibit 19 apply.
• The total of all delivery fees is capped at 200 basis points.
• A reduced term incentive of 50 basis points, effectively lowering the delivery fee cap to 150 basis points, is applied for fixed-rate Relief Refinance Mortgages having LTV ratios greater than 105 percent and less than or equal to 125 percent if:
  • The term of the mortgage being refinanced was 30 years or greater
  • The term of the Relief Refinance Mortgage is greater than 15 years and less than or equal to 25 years.

• All Relief Refinance Mortgages may be sold to Freddie Mac through the following executions:
  • Fixed-rate Cash
  • Fixed-rate Guarantor
• Relief Refinance Mortgages with LTV ratios less than or equal to 105 percent may also be sold to Freddie Mac through the following executions:
  • WAC ARM Cash
  • WAC ARM Guarantor
  • MultiLender Swap
• Relief Refinance Mortgages – Open Access with LTV ratios less than or equal to 105 percent may be sold to Freddie Mac through the selling system servicing-released sales process.
• Fixed-rate cash contracts for Relief Refinance Mortgages with LTV ratios greater than 105 percent and less than or equal to 125 percent may only include Relief Refinance Mortgages at these higher LTV ratios.*
  • To identify these fixed-rate cash contracts, enter Over105 with no space in the Contract name field on the Take Out a Cash Contract screen in the selling system.
  • A cash adjustor applies to all Relief Refinance Mortgages with LTV ratios greater than 105 percent that are sold to Freddie Mac for cash. This cash adjustor amount will change from time to time at Freddie Mac's discretion; the cash adjustor applicable to a particular mortgage will be determined as of the commitment date and will be reflected in the cash pricing shown in the selling system once the Seller allocates mortgages to the contract.
  • Please call 800-FREDDIE to obtain the most current cash adjustor value for these mortgages. After entering your Seller/Servicer number, select "option one" for system status and then "option three" for the cash adjustor value.

• All current pooling requirements apply including the specific requirements for super conforming mortgages.
• Fixed-rate and adjustable-rate Relief Refinance Mortgages with LTV ratios less than or equal to 105 percent may be pooled with other mortgages without additional pooling requirements.
• Fixed-rate Relief Refinance Mortgages with LTV ratios greater than 105 percent must be pooled separately in PC pools comprised entirely of Relief Refinance Mortgages with LTV ratios greater than 105 percent. These PC pools are not eligible for sale in the TBA market.*

• For complete Relief Refinance Mortgage – Open Access requirements see Guide Chapter B24.

• Relief Refinance Mortgages – Open Access must:
  • Be submitted to Loan Prospector on and after October 1, 2009.
  • Have a note date before June 10, 2010.
  • Have a Freddie Mac settlement date on or after October 1, 2009.
  • Be delivered not more than 120 days after the note date.