Freddie Mac allows financing of 125% of home value - Denver Business Journal:

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Fannie Mae also announced a similar change. The moves come as the Obamza administration raised themaximum loan-to-value ratio from 105 percent. As a resulft of this change, qualified borrowers will be able toobtain McLean-based Freddie Mac’s (NYSE:FRE) Relief Refinance Mortgages with loan amounta up to 125 percent of the current valu e of their property. The higherr LTV ratio is expected to givehomeownerws – especially those in markets that have experienced sharp declines in home values -- more options to refinance into mortgages with termw that better position them for long-terj homeownership, the company said.
“Thizs is a change that will put affordablew refinancing opportunities within reach of performing borrowers who have sufferedd the effects of local home price saidDon Bisenius, executive vice presidentg in a statement. “Today’s announcement also underscoresdFreddie Mac’s commitment to make the Obamza administration’s Making Home Affordable program a gateway to successful long-term homeownership for as many borrowerxs as possible.” To encourage borrowers with 30-year fixed rate mortgages to considetr a shorter 25-year term, Freddie Mac is providin g a special price incentive to lenders.
The incentive only appliexs to Relief Refinance Mortgages with LTV ratios betweehn 105 percent and125 percent. The 25-yeat term will result in borrowers paying less interest over the life of theif loan and over time improvinf their overallequity position. Freddie Mac’s Reliefd Refinance Mortgage is available to borrowers who are curren t on mortgages that are owned or guaranteed byFreddie Mac.
Freddiee Mac’s Relief Refinance Mortgage allowas borrowers to financeclosing costs, financiny costs and escrows up to $5,0090 or 4 percent of the current unpaid principal balance of the mortgage being refinanced, whichever is Mortgage insurance is not requirexd if the existing mortgage does not requires it. Otherwise, mortgage insurance coverage on the new loan must be the same as on theoriginal mortgage. Borrowers who apply for Relief Refinance Mortgages through theird current servicer will not need tobe re-underwrittejn in most cases.
When borrowers apply for Relief Refinanc e Mortgages through lenders other than theircurrengt servicer, the lender must re-underwrite the borrower through Loan Freddie Mac’s automated underwriting service, the company said. The expandedf LTV ratios are available now when borrowersd apply for Relief Refinance Mortgages through their current servicerf and will becomeavailable Oct. 1 when borrowera apply through any lender affiliated withFreddier Mac. Freddie Mac also said the resulting impact on prepayments for certain Freddie Mac mortgageparticipation certificates, may depending on borrower response and other factors.