FHLMC has released its May 1st Bulletin titled "Revised Selling and Servicing Requirements for Mortgages Affected by Hurricane Katrina and Hurricane Rita."

With this Bulletin, Freddie Mac is amending temporary Selling and Servicing requirements to:

 * Expand the application of the three-zone methodology (February 10th Bulletin) to the temporary Selling requirements announced in our Sept. 30, 2005, Guide Bulletin, for Mortgages secured by properties located in eligible Disaster Areas

 * Move seven counties/parishes to zones more commensurate with property damage in those areas (Updated Excel Spreadsheets below)

 * Require Servicers to use the charge-off path in Workout Prospector to process short payoffs when 95% or more of the debt is being paid off with insurance proceeds

 * Extend previously announced temporary Servicing requirements effective for the period from June 1, 2006, through Aug. 31, 2006

Included in this Bulletin are a number of Selling and Servicing Requirements and updates.
Selling Requirements

• Removing the LTV/TLTV/HTLTV ratio limit restrictions announced in the Sept. 30, 2005, Guide Bulletin for all Mortgages secured by properties located in Zone One
• Removing the special collateral requirements announced in the Sept. 30, 2005, Guide Bulletin for properties located in Zone One that are not damaged and announcing that, where applicable, those requirements will not expire on Oct. 3, 2006, but will remain in effect until further notice

• The counties/parishes and their assigned zone numbers identified on Attachment 1 of this Bulletin are effective immediately for Selling requirements 

  As previously announced and except as modified in this Bulletin with respect to the special collateral requirements, the temporary Selling requirements in the Sept. 30, 2005, Guide Bulletin, as amended, apply to Mortgages with:

1) Note dates on or after Aug. 30, 2005, through Oct. 3, 2006, for Mortgages affected by Hurricane Katrina, and
2)  Note dates on or after Sept. 25, 2005, through Oct. 3, 2006, for Mortgages affected by Hurricane Rita

In any of the following circumstances:
1) The Mortgaged premises is located within an eligible Disaster Area 
2)  The Borrower resided within an eligible Disaster Area prior to Hurricane Katrina or Hurricane Rita, but has since relocated 
3)  The Borrower’s employer is located within an eligible Disaster Area and the employer’s records have been damaged, destroyed or are inaccessible

All temporary Selling requirements previously announced in FHLMC's Sept. 30, 2005, Guide Bulletin as amended in our Oct. 7 and Nov. 8, 2005, Guide Bulletins remain in effect, except as amended by this Bulletin.

Servicing Requirements
With this Bulletin, Freddie Mac announces that effective for the period from June 1 through Aug. 31, 2006, for Mortgages secured by properties located in eligible Disaster Areas:

• Moving four counties/parishes (Choctaw and Marengo Counties in Alabama and Ascension and St. Martin Parish in Louisiana) from Zone Two to Zone One, and three counties/parishes (Baldwin, Clarke and Washington Counties in Alabama) from Zone Three to Zone Two
• Instructing Servicers to process short payoff transactions through the charge-off path in WP II when 95% or more of the debt is being paid off with insurance proceeds
• Extending the previously announced credit reporting requirements announced in the Feb. 10, 2006, Guide Bulletin through Aug. 31, 2006.
• Extending the requirement to obtain prior Freddie Mac approval to resume or initiate foreclosure or eviction proceedings in Zone Two
•  Extending the requirement to obtain prior Freddie Mac approval for lender-initiated property preservation activities in Zone Two and Zone Three other than decisions on accessing an abandoned property for insurance claims
• Extending the suspension period on foreclosure and eviction proceedings in Zone Three through Aug. 31

In addition:

• Streamlined underwriting requirements for loan modifications ends Aug. 31, 2006 -  The Oct. 7, 2005, Guide Bulletin,(re-iterated in the Feb. 10, 2006, Guide Bulletin) announced a temporary streamlined loan modification process for Mortgages secured by properties located in eligible Disaster Areas which expires Aug. 31, 2006. Beginning Sept. 1, 2006, Servicers must follow existing Guide requirements for submitting and approving workout loan modifications (see Guide Chapter B65).

• Individual assessment reminder - Servicers are reminded that regardless of the zone designation assigned to the county/parish in which the property securing a Mortgage is located, they should perform an individual assessment of each Mortgage to determine if forbearance in the form of a suspension or reduction of payments should be extended.

UPDATED Zip Code Spreadsheets

Zone 1 -  FHLMC Combined State List Zone 1.xls

Zone 2 -  FHLMC Combined State List Zone 2.xls

Zone 3 -  FHLMC Combined State List Zone 3.xls 

To run Property Reports for properties housed in the Safeguard Database please click on the following links:
***Please note: Log-in required

Zone 1

Zone 2

Zone 3

To view the Bulletin in its entirety please click on the following link.

FHLMC May 1st Bulletin - Revised Selling and Servicing Requirements for Mortgages Affected by Hurricane Katrina and Hurricane Rita