For the second time in 2017, Fannie Mae is lowering the benchmark interest rate for standard mortgage modifications.

Typically, Fannie Mae and Freddie Mac increase or decrease the benchmark interest rate simultaneously, but that doesn’t appear to be the case this time.

Fannie Mae announced Wednesday that it is cutting the benchmark rate from 4.125% to 4%, but Freddie Mac posted no such notice nor did it make a similar announcement.

HousingWire contacted Freddie Mac to see if it planned to cut its benchmark interest rate as well, but as of publication, the government-sponsored enterprise has not responded.

In January, Fannie and Freddie increased the standard mortgage modification benchmark rate from 3.875% to 4.25%. That was the highest the benchmark rate had been since July 2015.

But in May, Fannie and Freddie cut the benchmark rate from 4.25% to 4.125%, which came after four months of leaving the benchmark rate at that 18-month high.

And now, Fannie is cutting the benchmark rate again, from 4.125% to 4%.

The benchmark rate tracks with prevailing market rates, so the GSEs change the benchmark intermittently to match the market rates.

The January hike marked the second straight month of an increase, after Fannie and Freddie decreased the benchmark rate throughout 2016, dropping it below 4% as interest rates fell.

Those increases came after the GSEs dropped the standard mortgage modification benchmark interest rate to the lowest level ever, 3.5%, in August 2016. Then, the GSEs increased the benchmark rate from 3.5% to 3.875% in December, before hiking it well above 4% in January.

And now, Fannie is cutting it back to 4%. It remains to be seen if Freddie will be cutting its rate as well. For now, Freddie’s modification rate remains at 4.125%.

The standard modification program is “designed to help those borrowers who are ineligible for the Home Affordable Modification Program.”

According to the GSEs, the standard modification program is “designed to help those borrowers who are ineligible for the Home Affordable Modification Program.

Therefore, the new rate does not extend to HAMP borrowers.

Fannie Mae’s new 4% benchmark rate takes effect on July 17, 2017.

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