Sec. 3. Streamlined refinancing criteria under the program
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In carrying out the Home Affordable Refinance Program, each enterprise shall adopt and adhere to the criteria established under this section. The enterprises shall include as eligible borrowers in the Home Affordable Refinance Program all current borrowers who have an eligible mortgage and meet those underwriting requirements for eligibility for same servicer refinancing in the Program as of January 1, 2013, except that the enterprises may not disqualify or impose varying rules within the Program for borrowers based on LTV, CLTV, employment status or income.
The enterprises shall not require of any qualified lender executing a loan under the Program any representations or warranties— for the value, marketability, condition, or property type of the loan, as such loan characteristics are evidenced by an appraisal or alternative valuation method, provided that the lender complies with the enterprises’ required methods and standards for ordering an appraisal under the Program; or that are not required of same servicers under the Program as of January 1, 2013, whether that loan is manually underwritten or underwritten through an automated system, except that, under no circumstances shall greater representations and warranties be required for a loan that is manually underwritten than for one that is underwritten through an automated system.
In carrying out the Program, the enterprises may not charge the qualified lender any loan level price adjustment, post settlement delivery fee, adverse delivery charge, or other similar up-front fee. The enterprises shall develop and allow alternative streamlined methods to determine the value of the property for which refinancing is sought through the Program that eliminate the costs to the borrower and qualified lender associated with such determination. Until such time as such method is developed, and when the existing automated valuation models of the enterprises are unable to determine the value of a certain property for which refinancing is sought through the Program, the enterprises shall bear the costs associated with the use of manual appraisal of that property, without passing on such costs to the borrower or qualified lender.
Notwithstanding any provision of the Federal National Mortgage Association Charter Act (12 U.S.C. 1716 et seq.) or the Federal Home Loan Mortgage Corporation Act (12 U.S.C. 1451 et seq.), an enterprise may purchase or guarantee any new mortgage resulting from the refinancing of an eligible mortgage pursuant to this section, if at the time of origination of the eligible mortgage, the eligible mortgage complied with the applicable limitation governing the maximum original principal obligation on conventional mortgages that may be purchased or guaranteed by that enterprise.
On each mortgage refinanced under the Program in accordance with this section, the enterprises shall set the average fee required under this Act, as determined by the Director in an amount not less than the average fees charged by the enterprises as of January 1, 2013, for such guarantees. The Director shall prohibit an enterprise from offsetting the cost of the fee to the mortgage originators, borrowers, and investors by decreasing other charges, fees, or premiums, or in any other manner.
The Director shall prohibit an enterprise from consummating any offer for a guarantee to a qualified lender for mortgage-backed securities, if the guarantee is inconsistent with the requirements of this section. The Director shall require each enterprise to provide to the Director, as part of its annual report submitted to Congress, for loans refinanced under the Program— a description of changes made to up-front fees and annual fees as part of the guarantee fees negotiated with qualified lenders; and an assessment of how the changes in the guarantee fees described in subparagraph
(A)met the requirements of paragraph (1). Not later than 30 days after the date of enactment of this Act, the Director shall issue any regulations or guidance necessary to carry out the changes to the Program established under this section, which regulations or guidance shall be put into effect not later than 90 days after the date of enactment of this Act. The Program shall expire on December 31, 2014 and the requirements of this section shall expire concurrent with the expiration of the Program. Notwithstanding the prior sentence, the Director, at his or her discretion, may extend the Program and the requirements established under this section shall apply during any such extension. Nothing in this section shall be construed to supersede, preempt, or otherwise nullify the requirement that a loan refinanced under the Program must benefit the borrower. For purposes of paragraph (1), a loan refinanced under the Program benefits the borrower, if the refinanced loan results in— reduction in payment; reduction in interest rate; movement to a more stable product, such as from an adjustable rate mortgage to a fixed rate mortgage; or reduction in amortization term.
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