4304.1: General eligibility requirements for Enhanced Relief Refinance® Mortgages (11/05/18)

(a) The Mortgage being refinanced

(i) Eligibility of the Mortgage being refinanced

The Mortgage being refinanced must:

Have a Note Date on or after October 1, 2017
Be a First Lien, conventional Mortgage currently owned by Freddie Mac, in whole or in part, or securitized by Freddie Mac
Be seasoned for at least 15 months (that is, at least 15 months must have passed between the Note Date of the Mortgage being refinanced to the Note Date of the Enhanced Relief Refinance® Mortgage)

The Mortgage being refinanced must have a Mortgage payment history that indicates the following:

The Mortgage has not been 30 days delinquent in the most recent six months; and
The Mortgage has not been 30 days delinquent more than once in the most recent 12 months, and
The Mortgage has not been 60 or more days delinquent in the most recent 12 months

The Mortgage being refinanced must not be:

A Freddie Mac Relief Refinance MortgageSM
A Mortgage subject to an outstanding repurchase request
A Mortgage subject to recourse, indemnification or another negotiated credit enhancement, except as described in Section 4304.8

(ii) Representations and warranties related to the eligibility of the Mortgage being refinanced

For Loan Product Advisor® Mortgages that receive Eligible "Purchase Eligibility" on the Feedback Certificate, the Seller is not required to represent and warrant that the Mortgage being refinanced meets the eligibility requirements in Section (a)(i) above, with the following exceptions:

The Seller is required to represent and warrant that the Mortgage is seasoned at least 15 months by the Note Date of the Enhanced Relief Refinance Mortgage; and
The Seller remains responsible for determining whether the payment history requirements are met after the date of the last Loan Product Advisor submission

(iii) Modified Mortgages

If the Mortgage being refinanced was considered for and/or received a Freddie Mac modification, the Mortgage is eligible to be refinanced as an Enhanced Relief Refinance Mortgage, provided the requirements of this chapter are met, including the Mortgage payment history requirements above.The current contractually-obligated payment terms under the Note, including the most recent modification of the Note, if any, must be used for the purpose of determining whether the Enhanced Relief Refinance Mortgage meets the Borrower benefit requirements in Section 4304.1(b)(vi) below.

(b) The Enhanced Relief Refinance Mortgage

(i) Eligibility date

Enhanced Relief Refinance Mortgages must have Application Received Dates on or after November 1, 2018.

(ii) Negotiated provisions

Negotiated underwriting provisions, and special negotiated Mortgage products or offerings stated in the Purchase Documents may be used in conjunction with this offering unless the provisions, products or offerings conflict with the requirements of this chapter, in which case the requirements of this chapter will apply.

(iii) Eligible Mortgage products

The Enhanced Relief Refinance Mortgage must be:

A conventional 15-, 20-, or 30-year fixed-rate Mortgage
A conventional 5/5, 5/1, 7/1 or 10/1 ARM, provided that the Mortgage being refinanced is an ARM, except that a Mortgage secured by a Manufactured Home must not be a 5/5 or a 5/1 ARM

The Enhanced Relief Refinance Mortgage may be a super conforming Mortgage.

The Enhanced Relief Refinance Mortgage must not be:

A Mortgage with a temporary subsidy buydown plan
Originated pursuant to Section 50(a)(6) of Article XVI of the Texas Constitution. Refer to Section 4301.7 for additional information regarding Texas Equity Section 50(a)(6) Mortgages.
A Community Land Trust Mortgage. Refer to Chapter 4502 for additional information regarding Community Land Trust Mortgages
Secured by a property subject to income-based resale restrictions that terminate upon foreclosure (or expiration of any applicable redemption period) or recordation of a deed-in-lieu of foreclosure, where the property value must be determined in accordance with Section 4406.1(g)(ii)

(iv) Use of Mortgage proceeds

The proceeds of the Enhanced Relief Refinance Mortgage must be used only to:

Pay off the first Mortgage (amount including only the UPB and interest accrued through the date the Mortgage being refinanced is paid off)
Pay related Closing Costs not to exceed $5,000
Disburse cash to the Borrower not to exceed $250

In the event there are remaining proceeds from the Enhanced Relief Refinance Mortgage after the proceeds are applied as described above:

The Mortgage amount must be reduced, or
The excess amount must be applied as a principal curtailment to the Enhanced Relief Refinance Mortgage at closing and must be clearly reflected on the Settlement/Closing Disclosure Statement

Under no circumstances may cash disbursed to the Borrower exceed $250.

(v) Secondary financing

An existing junior lien:

Must be subordinate to the Enhanced Relief Refinance Mortgage and must meet requirements for secondary financing set forth in Chapter 4204. An increase in the current unpaid principal amount of any junior lien is prohibited to curtail the Enhanced Relief Refinance Mortgage or to pay related Closing Costs, and no new secondary financing is permitted.
May be an Affordable Second® meeting the requirements of the Seller's Purchase Documents. The Affordable Second must be subordinate to the Enhanced Relief Refinance Mortgage. Refer to Section 6302.38 for special delivery requirements for Enhanced Relief Refinance Mortgages with an Affordable Second.
May be refinanced simultaneously with the existing First Lien if the junior lien is being refinanced for one of the following purposes:
- A reduction in the interest rate of the junior lien
- To replace an ARM, an interest-only junior lien, or a junior lien with a balloon or call option with a fixed-rate, fully amortizing junior lien
- A reduction in the amortization term of the junior lien
- A reduction in the monthly payment of the junior lien

The UPB of the new junior lien may not be more than the UPB, at the time of payoff, of the junior lien being refinanced.

If the junior lien being refinanced is a fixed-rate junior lien, the new junior lien may not be an ARM.

(vi) Borrower benefit

The Enhanced Relief Refinance Mortgage must be originated for one of the following purposes:

A reduction in the interest rate of the First Lien Mortgage
To replace an ARM with a fixed-rate Mortgage
A reduction in the amortization term of the First Lien Mortgage
A reduction in the monthly principal and interest payment of the First Lien Mortgage

(vii) Required use of Form 65, Uniform Residential Loan Application
Form 65 must be completed for all Enhanced Relief Refinance Mortgages. Form 65A, Statement of Assets and Liabilities, may be used to supplement Form 65, if needed. The final Form 65 and Form 65A, if used, must be complete, legible, dated and signed by all Borrowers signing the Note.
Refer to Section 4101.1 for requirements regarding Form 65.

(c) Delivery requirements

See Section 6302.40 for delivery requirements and Exhibit 17S for available Mortgage products and associated Gold PC pools for Enhanced Relief Refinance Mortgages.