Freddie Mac CEO Charles E. 'Ed' Haldeman, Jr. Statement on New Initiative for State and Local Housing Finance Agencies

/PRNewswire/ -- The following statement was released today by Charles E. "Ed" Haldeman, Jr., Chief Executive Officer, Freddie Mac (NYSE:FRE) :

"We are pleased that President Obama and Secretary Geithner are calling on Freddie Mac to play a central role in this new phase of the Homeowner Affordability and Stability Plan. This will give critical credit and liquidity support to our nation's state and local housing finance agencies when they need it most."

"Today's announcement marks a new and important way to reinvigorate the nation's housing markets and underscores Freddie Mac's vital role in the nation's economic recovery."

"We look forward to working with state and local housing finance agencies, the Administration and the Federal Housing Finance Agency over the coming months to implement this crucial initiative to deliver affordable housing credit to local markets across the nation."

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Buy Your First Home-Get $8,000

(NAPSI)-First-time home buyers may find that buying a home-sweet-home is just a little sweeter this year.

They can now claim a tax credit of up to $8,000 through November 30, 2009. The credit is a crucial component of the American Recovery and Reinvestment Act of 2009, signed into law by President Obama earlier this year, designed to entice buyers off the fence and into the neighborhood.

"Homeownership offers immediate benefits and long-term value," said Lawrence Yun, chief economist for the National Association of Realtors®. "Those who qualify can reduce their tax burden and realize their dreams of homeownership."

So just who is eligible to receive this credit? Qualified first-time buyers include those who have never owned a home or haven't owned a home in three years. If you're married and filing joint returns, both you and your spouse must meet the first-time buyer requirements to enjoy the benefit.

Buyers should also keep in mind the home purchased must be their principal residence, where they plan to spend 50 percent or more of their time, and be located in the U.S. Unfortunately, vacation homes and rental properties aren't eligible.

To take full advantage of the credit, the buyer must remain in the home for at least three years. If the buyer sells the home before the end of the three-year period, he or she will have to repay the credit. This is to discourage short-term buying.

Although the $8,000 credit is an incentive for first-time buyers, there are currently several benefits all buyers can enjoy, including:

• Lots of choices-Increased inventory of homes on the market means buyers can negotiate better prices and terms.

• Low interest rates-Mortgage rates remain historically low, making borrowing more affordable for potential homeowners.

• Affordability-Home prices are more affordable now than they have been since 1970, according to NAR research.

"The tax credit, hopefully, will bring buyers into the market to help stabilize prices and reduce inventory," said Yun. "Because the real estate market is cyclical, those who are eligible should take advantage of this window of opportunity before it closes."

For more information, contact a Realtor® in your area or visit www.realtor.org/2009housingtaxcredit.

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Fannie Mae Undertakes 'Making Home Affordable' Refinancing and Modification Initiatives

/PRNewswire-FirstCall/ -- Fannie Mae (NYSE:FNM) today began 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 all they can to make the program a success for homeowners across America and to advance the nation's housing recovery."

Home Affordable Refinance

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(R)
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.

What Borrowers Need to Know:

-- To qualify, your mortgage loan must be owned by Fannie Mae.
-- You must have a solid payment history on your existing mortgage.
-- The expanded refinance flexibility ends in June 2010.

Home Affordable Modification


Through the Home Affordable Modification, Fannie Mae will work with loan servicers across the country to help distressed borrowers modify their current loan into a mortgage that is more affordable and sustainable. Loan servicers participating in the program may reduce interest rates, lengthen the payment time frame or take other steps, such as principal forbearance, to bring the monthly payments down to as low as 31 percent of the borrower's gross (pre-tax) income.

What Borrowers Need to Know:

-- To modify a loan through Home Affordable Modification, it must be for
your primary residence.
-- You need not wait to become delinquent with your payments -- a plan
can be put in place as soon as you think you may have trouble making
your mortgage payment.
-- The amount you owe on your mortgage must be less than or equal to
$729,750.
-- The program is for mortgages originated prior to January 1, 2009.
-- Certain eligibility requirements, including attesting to a financial
hardship, may apply in some cases.



To ensure borrowers currently at risk of a foreclosure have the opportunity to apply for a Home Affordable Modification, Fannie Mae servicers have been directed not to proceed with a foreclosure until a borrower has been evaluated for the program.

Finding Out if a Loan is Owned by Fannie Mae

Borrowers can find out if their loan is owned by Fannie Mae in one of two ways:

-- Call your current mortgage lender or servicer. The phone number
should be on your monthly mortgage statement or monthly coupon book.
-- Contact Fannie Mae. Call 1-800-7FANNIE (8 a.m. - 8 p.m. ET) or visit
http://www.fanniemae.com/homeaffordable.

Fannie Mae also intends to make an online tool available later this month so borrowers can look up their loan and determine if it is owned by the company.

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Freddie Mac Announces Two Initiatives Supporting President Obama's Making Home Affordable Plan

/PRNewswire-FirstCall/ -- Freddie Mac (NYSE:FRE) today announced two new mortgage initiatives under President Obama's Making Home Affordable plan designed to help families with Freddie Mac-owned mortgages who are delinquent, at-risk of default, or struggling to refinance because of declining property values.

The new initiatives include Freddie Mac's Relief Refinance(SM) Mortgage and the implementation of the Obama Administration's new Home Affordable Modification program.

"We are proud to support President Obama's bold initiative to restore stability and affordability to the housing market," said Freddie Mac Chairman of the Board, John Koskinen. "Today's announcement will give Freddie Mac seller/servicers the tools to refinance borrowers into loans with more affordable terms and provide at-risk borrowers with a potent new loan modification alternative."

Refinance Relief for More Borrowers

The new Freddie Mac Relief Refinance Mortgage is designed to assist borrowers who are current on their mortgage payments but who would benefit from refinancing into mortgages with terms that better position them for long-term homeownership. To qualify, borrowers must have mortgages that are owned or guaranteed by Freddie Mac.

Eligible borrowers can use Relief Refinance Mortgages to improve their position for long term homeownership success by reducing their current mortgage interest rate or shortening the amortization term. Similarly, the Relief Refinance Mortgage can be used to replace an adjustable rate mortgage, an Initial Interest(R) Mortgage or balloon/reset mortgage with a 15-, 20- or 30-year fixed-rate mortgage.

The loan-to-value ratio on Relief Refinance Mortgages can be as high as 105 percent of the property's value. There is no maximum TLTV/HTLTV ratio, however Relief Refinance Mortgages cannot be used to payoff or reduce subordinate liens. What's more, existing liens must continue to be subordinate to the Relief Refinance Mortgages.

To reduce borrower costs and simplify the refinance process Freddie Mac is encouraging lenders to use Home Value Explorer (HVE) when applicable, Freddie Mac's sophisticated automated valuation model. In addition, lenders using HVE will not be required to provide the standard representations and warranties on the property's value, condition and marketability.

Lenders will not have to re-underwrite a borrower if the Relief Refinance Mortgage raises their monthly principal and interest payment by 20 percent or less. But, in cases where the change in monthly principal and interest payment is more than 20 percent, borrowers will be underwritten through a simplified process. to increase their success with the new mortgage.

Mortgage insurance (MI) is not required if the existing mortgage does not require MI. Otherwise, MI coverage on the new loan must be the same as on the original mortgage.

Freddie Mac Relief Refinance Mortgages are only available for a limited time. Seller/Servicers must deliver Relief Refinance Mortgages under contracts taken out on or after April 1, 2009 through the company's on-line selling system. In addition, Relief Refinance Mortgages must be originated by June 10, 2010.

National Modification Effort Launched

Freddie Mac also announced support for the new national Home Affordable Modification program which begins on April 1, 2009 and is designed to help more at-risk borrowers achieve successful homeownership by lowering their monthly payments. To qualify, borrowers must have a Freddie Mac-owned or guaranteed mortgage originated on or before January 1, 2009.

To demonstrate its commitment to the Administration's new initiative, Freddie Mac has directed its servicers to ensure that every possible effort is made to achieve a successful workout for delinquent borrowers through the new Home Affordable Modification program or Freddie Mac's other workout options before initiating a foreclosure.

The new Home Affordable Modification program is expected to further reduce payments to more affordable levels, and in some cases assist eligible homeowners before they fall behind on their mortgage payments.

Last year, Freddie Mac approved more than 87,000 workouts on its seriously delinquent loans and launched the Streamlined Modification Program in November 2008 with Fannie Mae, the Federal Housing Finance Agency, and the HOPE Now Alliance.

Next Steps For Borrowers

Borrowers interested in learning more about the Freddie Mac Relief Refinance Mortgage or the Home Affordable Modification program should contact their mortgage servicer. Borrowers should also contact their servicer to find out if Freddie Mac owns or guarantees their mortgage.

Freddie Mac also said that depending on the level of borrower response to the Relief Refinance Mortgage program and the new modification initiative and the number of borrowers who qualify for such refinancings and modifications, the impact of resulting prepayments on certain Freddie Mac Mortgage Participation Certificates, or PCs, could be material.

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Reverse Mortgages Limits Raised to $625,500

/PRNewswire/ -- Lone Star Reverse Mortgage, a Texas-based reverse mortgage provider, has announced that reverse mortgage loan limits have increased as a result of the American Recovery and Reinvestment Act of 2009 (ARRA) and signed into law by President Obama on February 17, 2009.

"This is very important information and may come as a relief to many senior homeowners who are concerned about their ability to obtain or access cash or credit in the current economic climate. This new limit is significant to senior homeowners who have homes with higher values than previous reverse mortgage programs could accommodate," says Bob Worley, owner of Lone Star Reverse Mortgage.

Under ARRA, the national FHA loan limit for Home Equity Conversion Mortgage (HECM), a federally insured reverse mortgage, will increase from $417,000 to $625,500, effective for the remainder of 2009.

The passage of this program allows senior borrowers with higher value homes the ability to potentially receive much more money to use for whatever purpose they need, including retiring higher existing debt. If you have been unsure about a reverse mortgage because your benefit amount would not pay off enough of your existing debt or if you have already received a reverse mortgage but were limited in the amount of funds you could receive because your home was worth more than the HUD limit, you may now want to consider or reconsider a reverse mortgage. Under these new limits, now more than ever, this may be the right time to look at a reverse mortgage. At the very least, you owe it to yourself to be informed about the opportunities and options available to you.

The new legislation will only make the limits available until the end of 2009 and then it would be up to Congress to vote to extend the increased loan limit. So, sooner rather than later is the time to learn about the new limit and how it may benefit you.

If you have questions, seek the help and counsel of a qualified and experienced reverse mortgage specialist. A reverse mortgage is not the same as a traditional forward mortgage and they require the expertise of someone who specializes in reverse mortgage loans. Only work with individuals who are truly experienced in reverse mortgages and have a successful track record in this specialized industry.

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