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| Freddie Mac has eased up on some of its requirements for the Home Affordable Refinance program. But rising rates are quickly diminishing the benefit of the program.
An announcement today from the McLean, Va.-based company indicated that it will no longer limit refinances to the current servicer. Instead, borrowers can refinance a Freddie Mac loan under the program at any lender affiliated with the secondary lender. In addition, Freddie is flexing its requirements on financed closing costs. The lesser of 4 percent of the new mortgage or $5,000 in costs or prepaid escrow items can be financed into the loan. “We are responding to consumers’ desires to have more refinancing options,” Freddie executive Don Bisenius said in the statement. The Home Affordable Refinance program, which is part of the Homeowner Affordability and Stability Plan originally unveiled in February, was expected to help between 4 million and 5 million borrowers with loan-to-values from 80 percent to 105 percent refinance at today’s lower mortgage rates. But today’s mortgage rates are quickly climbing. Freddie reported the average 30-year fixed-rate mortgage at 5.29 percent yesterday — the highest it has been since the week ended Dec. 11, 2008, when it was 5.47%. And with the 10-year Treasury yield closing at 3.84 percent today, mortgage rates are likely to increase another quarter percent. The rise in mortgage rates pushed the refinance share of business down to 62 percent in the Mortgage Bankers Association’s latest weekly survey from 74 percent for the week ended May 15. |
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