Confessions of a Contract Processor: Freddie Mac Relief Refi-Can't Touch This!
Mary’s True Confessions: Remember when M.C. Hammer sang: “You Can’t Touch This”?…..was he talking about “Freddie Mac backed upside down mortgages”???
Let’s travel back in time (no, not to the 80’s and working our parachute pants) to Spring of 2009. There was a waft of new optimism in the air when Fannie Mae’s DU Refi Plus arrived (sound familiar? if not, check out my last blog!).
Despite the onset of HVCC and sharp decline in home values, Fannie’s new program immediately allowed brokers the opportunity to streamline refinance Fannie Mae owned mortgages, regardless of which lender owned the borrowers current mortgage, to a new lender of the broker’s choice. Within a few weeks I noticed that many brokers had rediscovered that portion of their database that they had long ago given up on…..you know, that part of your database that you never thought you would be able to refinance again??? It was the black hole portion of your database. The chasm filled with those purchase deals you did during the height of the real estate market. That portion of 80/20 loans or perhaps the guy you helped get a large 2nd mortgageon his property shortly after the purchase of his new home and prior to the needle bursting the housing balloon.
Well, Wahh-Lah! DU-Refi Plus was your new government program designed to help off-set the crappy earlier government regulation. So more than likely over the past serveral months, you have turned and burned and closed alot of deals. Most brokers considered it a mini refi-boom-if you can believe that! But, the excitement and earnings kept them from noticing the numerous deals that did not qualify for DU Refi-Plus. So, up until now, MC Hammer was right. You couldn’t touch Freddie Mac backed mortgages in upside down scenarios.
Well Hammer, “times have changed”! Now, Freddie is out with their streamline program and it rivals Fannie’s DU Refi Plus. Before now, those upside down mortgages backed by Freddie but owned by lenders that no longer have wholesale departments (such as Chase, Citi, GMAC or IndyMac) were not able to refinance to a new lender. Now those tasty little nuts that have been hiding inside your database are ready to be cooked over an open fire this Christmas. So, get with the program and review these Freddie Relief highlights:
- max LTV is 105%
- CLTV is UNLIMITED!! This should help that customer above with the enormous 2nd mortgage!
- Debt ratios up to 60%
- minimum credit score is 620
A.E. Lowdown: Lia Webster of Plaza Home Mortgage, Inc. comments_”My office just started doing these and they are a huge hit! One little helpful tidbit, the subject property can also be recently listed. It needs to be off the market prior to application date but it can be as little as 1 day off!” That is huge!!
If you have any other questions or need direction on where to go to take advantage of this program, give me a shout. Quick Close Processing loves to help you close more loans!
Got any successs stories, processing tips or questions?? Send them my way, I would love to share with our readers!