Connecticut Real Estate Attorney Law Blog


Freddie Mac to Eliminate Streamlined Refinance to 95% LTV?

According to this report Freddie Mac is issuing new underwriting guidelines for loans that close after May 1, 2011 that will among other things eliminate the "streamlined refinance" which allowed existing Freddie Mac borrowers to refinance up to 95% LTV and to roll in closing costs.  I am not sure how much this program was used, but it was one of the few out there that made sense to me.  Freddie Mac already owned a loan on a house that was in the vicinity of the same LTV or even higher, why not allow their current borrower to be able to take advantage of the lower rates?  I may be missing something here, but why not let an existing borrower refinance to a lower rate?  This is one of the many things that mystify me about lenders - you already have a paying borrower at a higher rate, why not let the borrower refinance?  The borrower will get the benefit of a lower payment, which can only increase the chances that the loan will continue to perform. 

It seems to me that if your loan is owned by Freddie Mac now is the time to refinance so you can still go up to 95% LTV.  If any mortgage brokers or loan officers know anything more about this I would appreciate their comments.


About the author:  Attorney Begemann is a member of the Connecticut Bar and practices real estate and business law in Connecticut.  As an experienced real estate attorney he represents individuals and lenders in residential and commercial loan closings across Connecticut, including the purchase, sale and refinance of real estate.

Attorney Paul H. Begemann, 2764 Whitney Avenue, Hamden, CT  06518

Phone 203-230-8739                                       Fax 800-483-1904



3 commentsPaul Begemann • January 20 2011 08:58AM


Thanks for the info and I will check to see if my loan is owned by freddie and maybe move a little more to refinance

Posted by All Mountain Realty 12 months ago

Interesting... Isn't it strange that we allow others to buy a home at the lower rates, but nothing's available to the current owner? Most of these people have made timel payments for years.

Posted by Margo Currie (Exit 1 Stop Realty) 12 months ago

Thanks for the comments, "All Mountain" I agree worth checking out for potentially high LTV (who isn't these days?) and Margo it always strikes me that intitutional lenders can't really see the big picture, if you are making your payments at say 6% wouldn't you be more likely to make them at 5%? 

Posted by Paul Begemann (Attorney Paul H. Begemann) 12 months ago

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