Last week, Fannie Mae announced it was cutting its benchmark interest rate for standard mortgage modifications for the second time this year, but Freddie Mac didn’t lower its rate, or so it appeared.
Normally, Fannie and Freddie raise or lower the benchmark interest rate at the same time, but when Fannie sent out a notification to mortgage servicers that it was dropping the benchmark rate from 4.125% to 4%, Freddie’s notification was nowhere to be seen.
As it turns out, Freddie is indeed cutting its benchmark rate to the same level as Fannie, but Freddie just took a little extra time to update its website to reflect that change.
So, on Monday, when Fannie Mae’s new benchmark rate of 4% took effect, it took effect for Freddie Mac too.
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.