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Preparing for the Mortgage Accounting Reporting System

June 27, 2011

Freddie Mac Multifamily is well under way in the development of our new Mortgage Accounting Reporting System (MARS), which will replace certain internal applications we currently use, as well as functionality in MultiSuite® for Investor Reporting (MSIR). MARS will bring new capabilities in 2012 that will offer you automation and process improvements for loan reporting. MARS will also improve the efficiency of Freddie Mac by helping us to process business volume more effectively, and help to reduce the accounting close time.

Implementation Stages for MARS

We’ll be implementing MARS in two stages with the first implementation for cash mortgages, and the second implementation for bonds and Tax Exempt Bond Securitizations (TEBS). Once the first phase implements, Seller/Servicers who have both cash and bond mortgages will need to use two different reporting systems. MARS for cash mortgages and the current system, MSIR for bonds, but just until the second implementation phase of MARS is complete.

Separation of Mortgage and Bond Information by Seller/Servicer Number

Today in MSIR, you are able to manage mortgages and bonds under the same Seller/Servicer number. As MARS will be a phased rollout, in order to accommodate reporting in the different applications, it will be necessary to separate your portfolio by establishing a new Servicer number(s) for your bond portfolio(s). Your current Seller number, which will be used for mortgages once MARS is implemented, will remain intact. The separation of your portfolio into two Servicer numbers will also require you to establish separate bank accounts to remit payments and complete monthly cash statement reconciliations for each Servicer number.

Timeline for Transitioning to Two Servicer Numbers

In recognition of the work that this change will require, we’re making you aware of this need today, and we will start working with you in July to initiate the process for that separation. We will provide you with a three-month period, starting in August, to undergo that transition, which must be completed no later than the end of October 2011.

We will provide updates on our progress with MARS later this year. We will also directly contact all Seller/Servicers who will be impacted by the dual reporting requirement. We will provide you with more detailed information as well as a brief questionnaire to help us determine how to best support and minimize this impact as you move to the dual reporting process.

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