Freddie Mac has issued Hurricane Katrina Relief Guidelines in order to expedite getting hazard insurance funds into the hands of borrowers.

The primary point of interest for our clients is the financial limits on how much money may be released to the borrower and in what manner. This temporary exception differentiates based on the status of the loan (current vs. 30-90 day delinquent).

Servicers are also reminded of a number of items, including;

• Besides for the temporary exceptions listed in the release, servicers are expected to comply with all other provisions of Freddie Mac Single-Family Seller/Servicer Guide, Volume 2 Sections 58.10, 58.11 and 67.29. (Please note that you must be logged in to AllRegs to access the guide documents).
• Insurance proceeds are to be strictly utilized to return the property to it's original condition. Borrowers are to be reminded as such.
• Servicers are encouraged to waive the assessment of penalties or late fees against borrowers with disaster-damaged homes.
• Servicers are encouraged to not report forbearance or delinquencies caused by the disaster to the nation's credit bureaus.
• Impacted borrowers whose mortgages are owned by Freddie Mac may qualify to have their mortgage payments reduced or suspended for up to 12 months
• Servicers are encouraged to review FHLMC policies for Major Disaster Areas at www.freddiemac.com/singlefamily/relief.html.

Please click on the following link to review the full document.

FHLMC Hurricane Katrina Relief Guidelines

Please click on the following link to review the Press Release.

FHLMC Hurricane Katrina Relief Guidelines Press Release

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