Fannie Mae Undertakes 'Making Home Affordable' Refinancing and
Modification Initiatives
Fannie Mae (FNM/NYSE) has begun making two new initiatives -- Home
Affordable Refinance and Home Affordable Modification -- available to its servicers and borrowers as part of
the Obama Administration's Making Home Affordable program. The two initiatives are designed to
significantly expand the numbers of borrowers who can refinance or modify their mortgages to a payment that
is affordable now and into the future.
"Making Home Affordable provides crucial tools to mortgage lenders and homeowners coping with financial
hardship and declining home prices," said Herb Allison, president and chief executive officer. "Potentially
millions of homeowners could qualify for and benefit from these initiatives. The people of Fannie Mae will do
Home Affordable Refinance includes new refinancing flexibilities for homeowners whose loans are owned by
Fannie Mae. Key features include:
- Additional Flexibilities: Most borrowers refinancing an existing Fannie Mae loan will not be required
to buy new or additional mortgage insurance if the loan at the time of the refinance is more than 80 percent
of a home's value. Any existing mortgage insurance may be carried forward to the new loan. In addition,
Fannie Mae can refinance loans up to 105 percent of a home's value with this new flexibility, so even
borrowers who are "underwater" -- who owe more than their home is worth -- may be able to refinance. This
will expand the number of borrowers able to take advantage of lower interest rates that reduce monthly
payments, or refinance into a more sustainable mortgage.
- Streamlined Processing: Beginning in April, all 1,600 lenders and 29,000 mortgage brokers using
Fannie Mae's Desktop Underwriter platform will be able to process an application to refinance any existing
Fannie Mae loan, allowing for greater lender origination capacity and easier refinancing for
borrowers.
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