Revised Guidelines Issued for Mortgages Secured by Properties Impacted by Disasters
November 2, 2012
If you have originated mortgages secured by properties that may have been impacted by Hurricane Sandy, it is important that you read today's Single-Family Seller/Servicer Guide (Guide) Bulletin 2012-24. With this Guide Bulletin, we are announcing revised selling requirements, including revised property valuation requirements for Freddie Mac Relief Refinance MortgagesSM secured by properties that were damaged as a result of a disaster, and revised age of documentation requirements for mortgages secured by properties impacted by Hurricane Sandy.
Originate & Underwrite and Sell & Deliver
Property valuation requirements for Relief Refinance Mortgages
Effective immediately, you may apply the following revised requirements for loans secured by properties damaged by natural disasters:
Notwithstanding the recommended steps in Guide Section 44.2(c) for properties affected by natural disasters, Sellers are not required to determine if an additional property inspection or a new appraisal is necessary after the initial property valuation has been relied on, provided that the mortgage meets our property insurance requirements outlined in the Guide Chapter 58.
Age of documentation requirements for mortgages impacted by Hurricane Sandy only
Effective for mortgages that are secured by properties located in eligible Disaster Areas affected by Hurricane Sandy, the maximum age of property valuation documentation and underwriting documentation has been extended from 120 days to 180 days before the note date. This temporary flexibility is effective only for:
- Mortgages that are secured by properties located in areas that have been declared as Major Disaster Areas by the President of the United States as a result of Hurricane Sandy and where federal aid in the form of individual assistance is being made available. These areas are listed on the Federal Emergency Management Agency website, and
- Mortgages with Application Received Dates on or before November 1, 2012, and note dates after November 1, 2012.
Please note that our requirements for age of verbal verifications of employment and existence of business have not changed.
Updates announced with today's Guide Bulletin do not impact our servicing requirements. If you service Freddie Mac loans, you must review and comply with our current servicing requirements related to properties affected by disasters outlined in Guide Chapter 68, Servicing Mortgages Impacted by a Disaster.
If a borrower resides in an area devastated by Hurricane Sandy and requests help with their mortgage payments, but the destruction is not severe enough for the President of the United States to issue a Major Disaster Declaration with federal Individual Assistance, you should provide mortgage relief using our standard mortgage relief options, as described in our Guide Chapters A65, B65, and C65.
Please review our October 30, 2012, article on our general mortgage relief and disaster relief policies for borrowers impacted by Hurricane Sandy.