FHLMC Guide Bulletin 2017-21: Extension of Certain Hurricane-Related Requirements and Property Inspection Reimbursement for Eligible Disaster Areas
Investor Update
September 25, 2017
As the 2017 hurricane season continues with strong storms that cause damage and hardship to millions of people, we’re working hard to respond quickly and help our Seller/Servicers in their efforts to assist borrowers facing hardships.
As part of our ongoing efforts, we’re announcing updates to our temporary Selling and Servicing requirements in Single-Family Seller/Servicer Guide Bulletin 2017-21.
New Temporary Requirements
- For mortgages you recently originated (Sellers)
We’ll reimburse you through September 2018, for property inspections completed prior to the sale or securitization of mortgages on properties in Eligible Disaster Areas associated with 2017 hurricanes. We will reimburse actual inspection costs not to exceed $75 for each loan.
In subsequent communications, we’ll provide further details on the reimbursement process.
- For mortgages you are servicing (Servicers)
We’re putting a temporary process in place for Servicers to be reimbursed for the actual property inspection costs, subject to applicable expense limits, for conducting inspections according to Guide Sections 8404.2 and 8202.11.
The temporary process is effective for inspections you conduct on and after August 29, 2017 on mortgaged premises in an Eligible Disaster Area. This flexibility covers properties affected by disasters other than hurricanes, as long they are located in areas subject to a Federal Emergency Management Agency (FEMA) disaster declaration where individual assistance is available.
This process includes reimbursing expenses beyond the normal reimbursable amounts if a “FEMA inspection” is obtained prior to the date of the Bulletin.
Review the Guide Bulletin for details on requesting a Servicer reimbursement under this temporary process and important reminders on reporting loans impacted by disasters and forbearance through the EDR process.
Updates to Extend the Scope of Previously Announced Temporary Requirements
We’re extending our temporary selling and Servicing requirements related to Hurricane Harvey and Hurricane Irma in Bulletins 2017-14 [PDF], 2017-16 [PDF] and 2017-19 [PDF] to mortgages and borrowers whose mortgaged premises or places of employment are located in Eligible Disaster Areas impacted by all hurricanes on and after August 25, 2017 and through the 2017 hurricane season.
However, for Servicers, the temporary suspension of foreclosure sales and evictions will only apply to mortgaged premises located in an Eligible Disaster Area as a result of Hurricane Harvey, Hurricane Irma and now Hurricane Maria.
FYI: Servicer Success Scorecard Metrics Impacted by Loans in Eligible Disaster Areas
The following metrics currently include (but should exclude) mortgages that were impacted by an eligible disaster and reported on forbearance in your August Scorecard (available at month-end in September):
- Transition from 30 to 60+
- Transition from Current to 30+
- Transition from 60 to 90+
- Transition from 120+ to Worse
We’re working to address this issue and your September Scorecard will exclude these mortgages. No other Scorecard metrics or calculations are impacted.
Please remember that to receive the proper Scorecard exclusion, you must accurately report all Mortgages impacted by an Eligible Disaster (mortgaged premises or place of employment) through EDR using Default Reason code 034 (Eligible Disaster Area). Additionally, you must accurately report all mortgages that are also placed on forbearance using code 09 (Forbearance).
For More Information
- Guide Bulletin 2017-21 [PDF]
- Single-Family Disaster Relief webpage
- Contact your Freddie Mac representative
Source: Freddie Mac
Additional Resources:
Safeguard Properties (Hurricane Maria All Client Alert summary page)
Safeguard Properties (Hurricane Irma All Client Alert summary page)
Safeguard Properties (Hurricane Harvey All Client Alert summary page)
