Fannie Mae previously announced that it will support the Obama Administration's initiative to help borrowers who have mortgages with current loan-to-value ratios up to 105 percent to refinance their mortgages without obtaining new mortgage insurance in excess of what was already in place, if Fannie Mae already owned or guaranteed the mortgage. On July 1, 2009, the Obama Administration announced an expansion of this initiative by allowing borrowers who have a current loan-to-value ratio up to 125 percent to apply for refinancing. Loans that are delivered to Fannie Mae with a current loan-to-value ratio up to 105 percent are eligible for TBA delivery, while loans delivered with a current loan-to-value ratio greater than 105 percent and up to 125 percent are eligible for delivery in to the CQ prefix.
On March 11, 2011, the Federal Housing Finance Agency ("FHFA") announced the extension of this initiative until June 30, 2012. In addition, FHFA has provided that mortgages acquired by Fannie Mae on or before May 31, 2009 or mortgages in an MBS pool with an issue date prior to June 1, 2009 shall be eligible to participate in such initiative. Newly originated mortgages that utilize the HARP flexibilities must (i) have a note date on or before June 30, 2012 and must (ii) be acquired by Fannie Mae on or before October 31, 2012 or be in an MBS pool with an issue date on or before October 1, 2012.
Market participants should consult our June 1, 2009 MBS Prospectus for information regarding the impact of refinancing on MBS investors.
Investors may contact our Fixed-Income Securities Helpline at 1-888-BOND HLP (1-888-266-3457) if they have additional questions.
Originally Published: March 14, 2011