September 15, 2017
This page is regularly updated; please check back frequently.
Last updated September 22, 2017.
For Hurricanes Irma and Harvey
Servicing Standard Updates
As we all continue to deal with the impacts of the storms, I want to reiterate how much we value our partnership with you and the great assistance you have already provided. Yet we are also keenly aware of the magnitude of the work that lies ahead.
While we continue to work with all of you to assess property damages, we have developed an approach to dealing with impacted Borrowers and their properties and associated loans. The following summarizes our approach, or Servicing Standard, for all such loans.
- For any loan secured by a property located within a county or parish designated by FEMA as a disaster area, Freddie Mac will offer forbearance up to 90 days (3 monthly payments) upon Borrower request. If accepted, Freddie Mac will also waive any associated late charges and default interest.
- The Borrower must repay the total forborne amount, without additional interest or prepayment premiums, over the ensuing 12-month period.
- Freddie Mac is providing its standard form of Forbearance Agreement to Servicers. Its substantive terms will be non-negotiable.
- Freddie Mac is prepared to reimburse Servicers’ counsel fees associated with the preparation and completion of the Forbearance Agreement in an amount not to exceed $750.
- If at the end of the forbearance period the Borrower cannot or does not resume making scheduled monthly payments (including the deferred amounts), then Freddie Mac will refer the loan to its Asset Resolution group for discussion of other workout arrangements or enforcement actions.
- Freddie Mac will apply this Servicing Standard to all its portfolio loans as well as those deals in which it is the named Master Servicer. As such, the loan will remain with us as Master Servicer and will not be transferred to the Special Servicer during the Forbearance period. We are also providing this guidance and support to all other Master Servicers in Freddie Mac securitizations.
- If your Borrowers have any questions, please have them contact their Servicers directly.
We have communicated these and additional details to our servicing community already and are working closely with them to institute these processes. If you have any questions, please don’t hesitate to contact Leanne Spies, Pam Dent or any of your relationship contacts here at Freddie Mac.
To Our Investors
We continue to work with our Servicers to assess the extent of the damage caused by Hurricanes Harvey and Irma. To support our Investors, we will make as much information available as possible via the Multifamily Securities Investor Access (MSIA) website and below under additional resources.
What you can expect as we and our Servicers track and report on the aftermath of Harvey:
- Freddie Mac will provide updated information on the exposure across our securitized products
- Master Servicers will be coming out with their respective Significant Insurance Event Reports (SIER) pursuant to the industry guidelines. Freddie Mac as Master Servicer will provide our SIER reports to investors via the certificate administrator websites and MSIA
- We encourage Investors to allow the Servicers the time needed to gather the information and ability to focus their resources on working with the Borrowers. During this critical assessment period, we are managing the process of gathering the information from the Servicers, so we ask that you reach out to us, rather than to the Servicers, for updates on individual properties in your portfolios.
You can reach out to the following Freddie Mac Multifamily Asset Management contacts:
For Hurricane Irma
To answer questions we’ve heard from Sellers, we’d like to share our approach for loans in the pipeline.
Please note that the following guidance is for Conventional, Seniors and Targeted Affordable Housing Loans. This does not apply to Small Balance Loans, as guidance has already been provided.
Guidance for properties located in the path of Hurricane Irma
- Loans in the quote stage will continue “business as usual.”
- Loans currently under application or in underwriting will continue through the pipeline, although there may be some additional property condition updates, or other requirements, before commitment or rate-lock occurs.
- For loans that have already been committed, locked, or closed, we will reach out to Seller/Servicers after the storm to assess the condition of each property and the path forward.
As part of the mandatory evacuation, our Fort Lauderdale office is closed, but you can continue to reach out to your Freddie Mac Multifamily representative as usual.
Please be assured that we will work closely with you and your Borrowers to create flexible and tangible solutions.
For Hurricane Harvey
To Our Sellers
As many of our Sellers assess the impact of Hurricane Harvey, we at Freddie Mac Multifamily stand ready to address affected properties, including those at all stages of the loan origination pipeline.
We will work with you to evaluate each affected loan on an individual basis and determine the appropriate course of action. We encourage you to raise concerns or provide updated status on individual properties as you learn of them.
If you would like to discuss properties in the origination pipeline that have yet to fund, please contact your Freddie Mac Production Representative. For funded mortgages, please reach out to your Freddie Mac Servicing Representative.
We will provide updates as the situation continues to evolve.
All those who have been impacted are in our thoughts. Please be assured, we are committed to working closely with you and your Borrowers to create flexible and tangible solutions — and to provide stability during this difficult time.