Freddie Mac will soon tell mortgage servicers to reduce the standard interest rate on its mortgage modifications, according to a senior official.
The government-sponsored enterprise will lower the rate to 4.625% from 5% for loans modified outside the Treasury Department’s Making Home Affordable Program.
Freddie will announce the change Thursday afternoon, according to Bob Kimble, senior director for servicing policy at the GSE.
Kimble, speaking at a SourceMedia mortgage servicing conference in Irving, Texas, said Freddie wants to make the interest rate on its modifications more comparable to the rest of the market. Fannie Mae already reduced its rate on modifications to the same 4.625%, while market-wide rates remain at or near all-time lows.
Freddie will include the standard modification interest rate in its weekly compilation of market rates, Kimble said.