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Industry Letter Provides Guidance on Mortgages Subject to City of Chicago Vacant Property Ordinance

December 12, 2011

The Federal Housing Finance Agency (FHFA) directed Freddie Mac and Fannie Mae (the GSEs) on December 8, 2011, to take specific actions regarding mortgages owned or guaranteed by the GSEs subject to the City of Chicago, IL, Vacant Property Ordinance (Ordinance). The Ordinance imposes registration fees, taxes, fines, penalties and maintenance obligations associated with "vacant" properties located within the City of Chicago that go beyond the guidance provided in the Freddie Mac Single-Family Seller/Servicer Guide (Guide).

Servicing

As a first step in implementing the requirements outlined in the FHFA directive, today we issued an Industry Letter that provides Freddie Mac Servicers with guidance and additional actions they must begin taking for Freddie Mac mortgages that are impacted by the Ordinance. This guidance includes reinforcing that Freddie Mac Servicers must continue to meet the requirements of the Ordinance and provides instructions for:

• Separately recording and tracking all expenses Servicers or their vendors incur for registration, inspection, maintenance and other items required by the Ordinance from the effective date, September 18, 2011, and going forward.
• Not submitting any Ordinance related registration, inspection, maintenance, and other expenses to Freddie Mac at this time and until further notice.

Today's Industry Letter includes as an Exhibit the FHFA directive to Freddie Mac and Fannie Mae. We encourage all Freddie Mac Servicers to review this directive carefully for more information on the Ordinance.

We will be providing Servicers with specific requirements on how to report expenses and submit them for reimbursement in a future Guide Bulletin, in addition to any other necessary changes to our requirements.

Get More Information

• Read the December 12, 2011, Industry Letter.