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 over the summer 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. In January of this year, 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 standard modification program is “designed to help those borrowers who are ineligible for the Home Affordable Modification Program.”
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