Back to Hurricanes Katrina and Rita Main

Information for Sellers Holding Closed Mortgages in Areas Affected by Hurricane Katrina
(Revised as of August 4, 2006)

Closed loans with Note Dates on or after June 1, 2005 through August 29, 2005 - Removing Recourse

Freddie Mac provided Sellers with closed single-family mortgages secured by properties located in eligible Disaster Areas the opportunity to sell those mortgages through our selling system on or before October 21, 2005.  One of the conditions precedent to that sale was that the mortgages be sold with recourse.

For mortgages that are sold under these negotiated terms, you can remove the recourse within three years of the Freddie Mac funding date when you make the value, condition and marketability representations and warranties required by Guide Chapter 44, the representation and warranty regarding no uninsured flood damage, and the representation and warranty that the LTV ratio is not less than the LTV ratio used as of the Note Date. To remove the recourse, you'll need to contact your Freddie Mac Account Manager, Credit Manager or (800) FREDDIE representative. Your Freddie Mac representative will work with you on options to support your making the representations and warranties, which may include:

• A final inspection with a recertification of value using the original appraisal, performed by either the original appraiser or appraisal firm, or a new appraiser if the original appraiser is not available.

• A new appraisal.

• Other options that support your ability to make the representations and warranties.

Note that after three years from the Freddie Mac funding date, if you have not made the representations and warranties, the recourse will remain in place for the life of the loan.