Fannie Mae ( FNMA ) and Freddie Mac ( FHLMC ) are the government agencies that created and designed the rule book by which all applications for mortgages conform to. The exception to this is for mortgages that are not sold or securitized, typically bank “portfolio loans”. When mortgages meet Fannie / Freddie guidelines, they are considered homogenized. This process makes the mortgage more valuable for several reasons – 1) their risk level has been identified and reduced, and 2) they can be bundled and sold. Even if you’re making payments to a small bank, it is likely the mortgage has been sold off to clear funds for future mortgages by that bank. It’s just that the small bank has retained the servicing aspect of that mortgage.
My point being is that even though you may make payments to a small bank, your mortgage may be securitized by Fannie or Freddie. In fact it is probable that it is. Click on www.MakingHomeAffordable.com to verify if your mortgage is owned by Fannie or Freddie. If it is, you may be eligible for relief from loan-to-value criteria on a mortgage application. These relief programs are a work in progress. GoldCoast Mortgage has had success (and some failures) in attempting to complete mortgage applications on behalf of clients wishing to refinance using the Refi Plus and Refi Relief programs.