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What's New
Mortgage Products
Underwrite and Process with Loan Prospector
Sell & Deliver Loans
Service Loans
Training and Education
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Change in temporary selling and servicing requirements for Hurricane Katrina and Rita mortgages
Our Single-Family Seller/Servicer Guide Bulletin dated December 5, 2007 [PDF 134K] announced important changes to our temporary selling and servicing requirements for eligible Hurricane Katrina and Hurricane Rita impacted mortgages:
- We extended our temporary selling requirements through June 30, 2008.
- We announced that most of our temporary servicing requirements will not be extended and will expire on December 31, 2007. This decision was made after careful review of damage reports for impacted areas and extensive discussions with our Advisory Boards and other industry organizations.
For Sellers
We extended the following temporary selling requirements for eligible mortgages with note dates on or before June 30, 2008 that are delivered on or before September 30, 2008:
- Underwriting relief and flexibility for borrower credit reputation and capacity and the LTV/TLTV/HTLTV ratio limits announced in our September 30, 2005 Bulletin [PDF 143K]
(as amended by subsequent Bulletins)
- The removal of median income limits for borrowers with Home Possible® Mortgages secured by properties in eligible disaster areas
Sellers originating mortgages secured by properties in the eligible Disaster Areas should continue to use
- The three-zone methodology as identified in Exhibit A of the December 5, 2007 Bulletin
- Special Characteristics Code (SCC) 821 in connection with the delivery of each mortgage
- SCC 140 in connection with the delivery of each Home Possible Mortgage
For Servicers
Temporary requirements for credit reporting and borrower-paid mortgage insurance cancellation remain in effect for eligible mortgages until no longer applicable. The remaining temporary servicing requirements will expire on December 31, 2007, including special measures for:
- Temporary requirements for Electronic Default Reporting
- Streamlined underwriting requirements for loan modifications
- Delegation to approve a short payoff
- Documentation requirements for long-term forbearance
- A Servicers' ability to extend forbearance on an individual assessment without prior approval from Freddie Mac
As of January 1, 2008, Servicers must follow our Guide requirements for managing distressed and abandoned properties (Sections 67.27 and 67.28) and for properties impacted by a disaster (Chapter 68).
The December 5, 2007 Bulletin includes detailed reminders about our requirements for temporary credit reporting requirements, borrower-paid mortgage insurance cancellation requirements, and requirements for managing distressed or abandoned properties.
For more information
If you are currently servicing or originating mortgages secured by properties located in Hurricane Katrina or Rita eligible Disaster Areas, it is important that you thoroughly review our December 5 Guide Bulletin [PDF 134K]
for complete details about our recent changes.
For additional information:
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