We're working with you to support a stable market amidst challenging times

Each day, we're focused on being there for you every step of the way through the homebuying process, in challenging times and beyond.  As we work to address your business needs in a rapidly changing market, with our September 4 Single-Family Seller/Servicer Guide (Guide) Bulletin [PDF 191K], we are reinforcing prudent and responsible lending practices.

With this Guide Bulletin we are updating the Guide text to reflect the changes we announced in our July 13th Bulletin and to incorporate new requirements for the purchase of mortgages secured by properties in Nevada.

Requirement changes for nontraditional mortgages 

On July 13, as directed by our regulator, the Office of Federal Housing Enterprise Oversight, we announced important changes to our requirements for the purchase of nontraditional mortgages, including Initial Interest® Mortgages and other ARMs and fixed-rate mortgages with an interest-only component.  These changes are consistent with the practices referenced in the federal banking agency's Interagency Guidance on Nontraditional Mortgage Product Risk (Guidance). 

With the September 4 Guide Bulletin we are updating applicable Guide chapters to reflect those changes. The Guide changes are effective for all Initial Interest mortgages that have loan application dates on or after September 13, 2007.  However, we strongly encourage you to adopt the changes sooner wherever possible.

Please note that Freddie Mac's delivery requirements have not changed. As required by Guide Section 17.14, please continue to deliver the first interest-only payment specified in the Note and the monthly expense calculated using the interest-only payment.

We encourage you to review our September 4 Guide Bulletin [PDF 191K] , as well as our July 13 Guide Bulletin [PDF 191K] and July 13 Single-Family Advisory e-mail for complete details on the changes in our purchase requirements of nontraditional mortgages and additional information on:

• Negotiated terms of business for nontraditional products covered by the Guidance
• Effective dates and implementation timeframes
• Special requirements for federally- or state-regulated Sellers 
• Changes to Loan Prospector® assessments 
• Changes to requirements for bulk purchase transactions

Requirement changes for Nevada mortgages 

Currently "home loans," as defined under Nevada law until October 1, 2007, are refinance mortgages that exceed the annual percentage rate or points and fees threshold of the Home Ownership and Equity Protection Act of 1994 (HOEPA), and so are ineligible for purchase. Nevada's new law that takes effect on October 1 changes the definition of "home loans" to include all single-family mortgages in Nevada. To ensure that you can continue selling Nevada mortgages to us, we are updating the Guide to delete Section 22.18.9 so that Nevada "home loans" with note dates on or after October 1, 2007 will be eligible for sale to Freddie Mac if they:

• Do not exceed HOEPA's annual percentage rate or points and fees thresholds 
• Were originated and serviced in compliance with all applicable laws, regulations and orders
• Comply with all other applicable requirements in the Guide 

For more information

• Refer to our July 13 and September 4 [PDF 191K] Guide Bulletins
• Review our July 13 Single-Family Advisory e-mail on changes to requirements for nontraditional mortgages
• Read our At-a-Glance article in this issue of the Single-Family News providing an overview of all our recent underwriting and purchase requirements changes