Bulletin contains temporary requirements for selling Mortgages affected by Hurricane Katrina and Hurricane Rita. With this Bulletin we are:

• Providing temporary relief and flexibility to Sellers in underwriting Borrower credit reputation and capacity for new purchase and refinance Mortgage applications.
• Revising our collateral underwriting requirements for new Mortgages secured by properties located in an eligible Disaster Area.
• Following up our September 26, 2005 announcement of temporary relief to Sellers who have been holding Mortgages originated before Hurricane Katrina because they can no longer make the representations and warranties required for sale to us.

• Flood insurance coverage requirements for Mortgages sold to and serviced changed
• Initial InterestSM Mortgages and Limited Buydown and Extended Buydown Mortgages for sale through the Freddie Mac Selling System (Selling System)
• Postsettlement delivery fee (delivery fee) rates for Mortgages with secondary financing by:
• Reduces the delivery fee rate for Mortgages that are not Initial Interest Mortgages and are not Home PossibleSM Mortgages to:
• 25 basis points for the 75/20/5, 80/15/5 and 90/5/5 financing structures
• 0 basis points for the 80/10/10 financing structures
• Increasing the delivery fee rate for Initial Interest Mortgages to 25 basis points for 75/20/5 financing structures
• Appraisal-related changes to the organization, structure and content of Chapters 22, H33 and 44
• Recommendations on steps Sellers can take to ascertain the condition of properties located in areas that may be impacted by a disaster
• Revised adjustable-rate Mortgage (ARM) Notes and new ARM Riders for use with Initial Interest ARMs more>>

• Changes to encourage use Employer Assisted Homeownership (EAH) Benefits.
• Reiterating the conditions under which a Seller’s relief from creditworthiness and value, condition and marketability representations and warranties is valid for the life of a qualifying Loan Prospector® Mortgage
• Making several changes that will assist Sellers in complying with our First-Time Homebuyer (FTHB) data delivery requirements
• Adding requirements for an attorney’s opinion of title covering material in the American Land Title Association (ALTA) endorsements related to adjustable-rate Mortgages (ARMs) and environmental matters
• Making minor changes to our foreclosure requirements, including extending forbearance from foreclosure (under the Servicemembers Civil Relief Act of 2003 [SCRA]).
• Increasing the dollar amount for delinquent loan charge-offs to $5,000 for conventional Mortgages and $2,000 for FHA, VA and RHS Mortgages, regardless of the Borrower’s equity position in the property
• Revising our requirements for approving a release of or granting an easement on a portion of the Mortgaged Premises
• Making several minor changes to our collection efforts and collection techniques, such as enhancing our collection requirements for delinquent new Borrowers for certain Mortgages. We’re also lengthening the timeframe for mailing the breach letter on delinquent modified Mortgages.

• Revises fidelity and errors and omissions (E&O) insurance requirements
• Provides more information about selling Initial InterestSM Mortgages through the Freddie Mac Selling System (Selling System) as of July 1, 2005
• Provides additional information for adjustable-rate Mortgages (ARMs) eligible under WAC ARM Cash and the WAC ARM Guarantor program through the Selling System
• Updates requirements for special purpose cash-out refinance Mortgages
• Providing additional information on Forms 59 and 59E to assist Servicers in reconciling the Custodial Accounts
• Revises the Bank One address to which Servicers must forward redemption proceeds

• Introduces Home PossibleSM Mortgages for low- to moderate-income Borrowers who need low-downpayment options and credit flexibility
• Expands Initial InterestSM Mortgages to meet the needs of Borrowers and Sellers by adding Initial Interest 3/1, 5/1 and 7/1 adjustable-rate Mortgages (ARMs) with a 10-year Interest Only Period and revising our Initial Interest ARM loan instruments to accommodate these products
• Expands the functionality of the Freddie Mac Selling System (Selling System) by: Adding availability of the WAC ARM Guarantor and MultiLender Swap programs
• Allows the sale of 5- and 7-year Balloon/Reset Mortgages under the fixed-rate Guarantor program
• Allows the sale of Mortgages with single-premium lender-paid mortgage insurance. We are also updating language related to annual- and monthly premium lender-paid mortgage insurance.
• Addresses the enactment of antipredatory lending legislation in Indiana, as announced in our December 15, 2004, Industry Letter

• Increasing the maximum original loan amounts for Home Mortgages eligible for sale to Freddie Mac
• Expanding functionality of the Freddie Mac Selling System (Selling System) by adding fixed-rate Guarantor program capabilities
• Updating the Single-Family Seller/Servicer Guide (Guide) to provide revised income limits for Affordable Gold® Mortgages and to refer to an “Underserved Area” instead of a “Concentrated Area” to describe those limits. We are also providing instructions on how to determine income eligibility.
• Updating Guide language to reflect the retirement of the Gold Cash Xtra® (GCX) software system
• Providing Sellers with direction on how to include title policy endorsements when using an American Land Title Association (ALTA) short form title policy
• Providing Guide replacement pages supporting the revisions to our requirements in response to the passage of antipredatory lending legislation in Massachusetts, as announced in our October 1 Industry Letter
• Revising contact information on the Form 987, Wire Transfer Authorization for a Cash Warehouse Delivery, and the Form 996, Warehouse Lender Release of Security Interest
• Revising Exhibit 57, 1–4 Unit Property Approved Expense Amounts, to increase allowable fees for title work in Utah

• Permits use of the American Land Title Association (ALTA) short form title policy
• Adds a requirement that attorneys' opinions of title are not permitted for Mortgages secured by properties subject to deed restrictions or restrictive agreements
• Removes Freddie Mac Selling System (Selling System) delivery requirements for Biweekly Mortgages sold under the Cash program from the Single-Family Seller/Servicer Guide (Guide) and adding those requirements to Sellers' contracts
• Provides documentation requirements for Seller-Owned Modified Mortgages and additional instructions for Seller-Owned Converted Mortgages
• More >>