Freddie Mac CEO Charles E. 'Ed' Haldeman, Jr. Statement on New Initiative for State and Local Housing Finance Agencies

/PRNewswire/ -- The following statement was released today by Charles E. "Ed" Haldeman, Jr., Chief Executive Officer, Freddie Mac (NYSE:FRE) :

"We are pleased that President Obama and Secretary Geithner are calling on Freddie Mac to play a central role in this new phase of the Homeowner Affordability and Stability Plan. This will give critical credit and liquidity support to our nation's state and local housing finance agencies when they need it most."

"Today's announcement marks a new and important way to reinvigorate the nation's housing markets and underscores Freddie Mac's vital role in the nation's economic recovery."

"We look forward to working with state and local housing finance agencies, the Administration and the Federal Housing Finance Agency over the coming months to implement this crucial initiative to deliver affordable housing credit to local markets across the nation."

-----
www.fayettefrontpage.com
Fayette Front Page
www.georgiafrontpage.com
Georgia Front Page

Freddie Mac Officially Launches REO Rental Initiative for Tenants, Owner-Occupants After Foreclosure

/PRNewswire-FirstCall/ -- Freddie Mac (NYSE:FRE) today announced the official launch of its new REO Rental Initiative giving qualified tenants and former owners the option to lease their recently foreclosed properties on a month-to-month basis. The REO Rental Initiative will be managed by HomeSteps(R), Freddie Mac's national real estate unit, and implemented through several national property management firms.

Freddie Mac also announced it will continue to suspend all eviction actions until April 1 2009 to ensure there is ample time for current occupants to learn about the options available to them under the new initiative.

"Freddie Mac's REO Rental Initiative can help ease a foreclosure's impact by giving renters and former owners more time to determine what options are best for them and their families. At the same time, the REO Rental Initiative helps stabilize property values and local communities by keeping homes occupied and less vulnerable to vandalism," said Ingrid Beckles, Senior Vice President, Default Asset Management at Freddie Mac.

Starting today the property management firms will begin the process of contacting occupants of foreclosed properties to determine their interest in staying in the home and their eligibility for a month-to-month lease. Occupants will be contacted only after the foreclosure gives Freddie Mac the legal authority to offer a lease.

To qualify for a lease, the tenant or former owner must occupy the property and show they have adequate income to pay the monthly rental amount established by the property management company based on market rents for the area in which the home is located. Occupants must agree to allow HomeSteps to show the home to potential buyers as it will be marketed for sale during the lease period.

Additionally the home must be in safe, habitable condition and meet all local codes for rental properties to qualify for the REO Rental Initiative.

If an occupant does not wish to lease the property, Freddie Mac will continue its current practice of offering relocation assistance. In addition, Freddie Mac will also explore available workout options with owner-occupants after Freddie Mac gains title to the property through foreclosure.

-----
www.fayettefrontpage.com
Fayette Front Page
Community News You Can Use
Fayetteville, Peachtree City, Tyrone
www.georgiafrontpage.com
Georgia Front Page

Freddie Mac Announces Two Initiatives Supporting President Obama's Making Home Affordable Plan

/PRNewswire-FirstCall/ -- Freddie Mac (NYSE:FRE) today announced two new mortgage initiatives under President Obama's Making Home Affordable plan designed to help families with Freddie Mac-owned mortgages who are delinquent, at-risk of default, or struggling to refinance because of declining property values.

The new initiatives include Freddie Mac's Relief Refinance(SM) Mortgage and the implementation of the Obama Administration's new Home Affordable Modification program.

"We are proud to support President Obama's bold initiative to restore stability and affordability to the housing market," said Freddie Mac Chairman of the Board, John Koskinen. "Today's announcement will give Freddie Mac seller/servicers the tools to refinance borrowers into loans with more affordable terms and provide at-risk borrowers with a potent new loan modification alternative."

Refinance Relief for More Borrowers

The new Freddie Mac Relief Refinance Mortgage is designed to assist borrowers who are current on their mortgage payments but who would benefit from refinancing into mortgages with terms that better position them for long-term homeownership. To qualify, borrowers must have mortgages that are owned or guaranteed by Freddie Mac.

Eligible borrowers can use Relief Refinance Mortgages to improve their position for long term homeownership success by reducing their current mortgage interest rate or shortening the amortization term. Similarly, the Relief Refinance Mortgage can be used to replace an adjustable rate mortgage, an Initial Interest(R) Mortgage or balloon/reset mortgage with a 15-, 20- or 30-year fixed-rate mortgage.

The loan-to-value ratio on Relief Refinance Mortgages can be as high as 105 percent of the property's value. There is no maximum TLTV/HTLTV ratio, however Relief Refinance Mortgages cannot be used to payoff or reduce subordinate liens. What's more, existing liens must continue to be subordinate to the Relief Refinance Mortgages.

To reduce borrower costs and simplify the refinance process Freddie Mac is encouraging lenders to use Home Value Explorer (HVE) when applicable, Freddie Mac's sophisticated automated valuation model. In addition, lenders using HVE will not be required to provide the standard representations and warranties on the property's value, condition and marketability.

Lenders will not have to re-underwrite a borrower if the Relief Refinance Mortgage raises their monthly principal and interest payment by 20 percent or less. But, in cases where the change in monthly principal and interest payment is more than 20 percent, borrowers will be underwritten through a simplified process. to increase their success with the new mortgage.

Mortgage insurance (MI) is not required if the existing mortgage does not require MI. Otherwise, MI coverage on the new loan must be the same as on the original mortgage.

Freddie Mac Relief Refinance Mortgages are only available for a limited time. Seller/Servicers must deliver Relief Refinance Mortgages under contracts taken out on or after April 1, 2009 through the company's on-line selling system. In addition, Relief Refinance Mortgages must be originated by June 10, 2010.

National Modification Effort Launched

Freddie Mac also announced support for the new national Home Affordable Modification program which begins on April 1, 2009 and is designed to help more at-risk borrowers achieve successful homeownership by lowering their monthly payments. To qualify, borrowers must have a Freddie Mac-owned or guaranteed mortgage originated on or before January 1, 2009.

To demonstrate its commitment to the Administration's new initiative, Freddie Mac has directed its servicers to ensure that every possible effort is made to achieve a successful workout for delinquent borrowers through the new Home Affordable Modification program or Freddie Mac's other workout options before initiating a foreclosure.

The new Home Affordable Modification program is expected to further reduce payments to more affordable levels, and in some cases assist eligible homeowners before they fall behind on their mortgage payments.

Last year, Freddie Mac approved more than 87,000 workouts on its seriously delinquent loans and launched the Streamlined Modification Program in November 2008 with Fannie Mae, the Federal Housing Finance Agency, and the HOPE Now Alliance.

Next Steps For Borrowers

Borrowers interested in learning more about the Freddie Mac Relief Refinance Mortgage or the Home Affordable Modification program should contact their mortgage servicer. Borrowers should also contact their servicer to find out if Freddie Mac owns or guarantees their mortgage.

Freddie Mac also said that depending on the level of borrower response to the Relief Refinance Mortgage program and the new modification initiative and the number of borrowers who qualify for such refinancings and modifications, the impact of resulting prepayments on certain Freddie Mac Mortgage Participation Certificates, or PCs, could be material.

-----
www.fayettefrontpage.com
Fayette Front Page
www.georgiafrontpage.com
Georgia Front Page

Freddie Mac Extends Moratorium on Foreclosure Sales

/PRNewswire-FirstCall/ -- Freddie Mac (NYSE:FRE) today announced it is immediately suspending all foreclosure sales involving occupied single family and 2-4 unit properties with Freddie Mac-owned mortgages through March 6, 2009. The suspension does not apply to vacant properties.

The extension will provide servicers with more time to help troubled borrowers find an alternative to foreclosure.

Freddie Mac gives lenders servicing its mortgages broad authority to provide forbearance to borrowers who are not yet delinquent, and permanent rate reductions, mortgage term extensions, forbearance of principal or other modifications to borrowers who are already delinquent. (For more about Freddie Mac workout options, see freddiemac.com.)

-----
www.fayettefrontpage.com
Fayette Front Page
www.georgiafrontpage.com
Georgia Front Page

Freddie Mac Launches New Workout Plan for High Risk Loans

/PRNewswire-FirstCall/ -- Freddie Mac (NYSE:FRE) said today it is piloting a new Workout Strategy For High Risk Loans designed to keep more at-risk borrowers in their homes by employing third party servicers that specialize in servicing Alt A and other types of higher risk mortgages.

"A workout strategy is only as successful as the number of knowledgeable counselors available to answer the phone. Our strategy for high risk loans is designed to help servicers cope with today's unprecedented call volume by directing calls to a specialist with the specific staff and technical resources for handling a high volume of borrowers with these types of mortgages," said Ingrid Beckles, Freddie Mac's senior vice president of default asset management.

Under the new pilot, a selected portfolio of higher risk mortgages that are at least 60 days delinquent will be given to a specialty servicer for intensive attention using the full range of Freddie Mac workout opportunities, including the Streamlined Modification Program developed with the Federal Housing Finance Agency, Fannie Mae and the HOPE Now Alliance.

Ocwen Financial Corporation (NYSE:OCN) is one of the servicers Freddie Mac has selected for the pilot. Ocwen will deploy teams of specially trained counselors to handle Freddie Mac's delinquent high risk mortgages in order to minimize telephone wait times, put borrowers in touch with live counselors faster, and implement the latest Freddie Mac foreclosure reduction policies more quickly.

"We applaud Freddie Mac's leadership in foreclosure prevention and are delighted to support this innovative initiative," said William Erbey, Ocwen's Chairman and CEO. "We bring the technology and processes that now achieve successful workouts in the overwhelming majority of delinquent loans in our servicing portfolio. Our goal is and will continue to be to engineer workouts that keep homeowners in their homes and return greater cash flow to the loan owner than the proceeds from a foreclosure - a win/win situation for American homeowners and taxpayers alike."

Initially, the pilot will target an estimated 5000 reduced documentation loans from California, Nevada and other states with high delinquent rates. Although Alt-A loans were made to borrowers with strong profiles and represent a fraction of Freddie Mac's single family portfolio, they account for half of its seriously delinquent mortgages.

Freddie Mac plans to determine whether to broaden or modify the strategy after reviewing the pilot's June results.

-----
www.fayettefrontpage.com
Fayette Front Page
www.georgiafrontpage.com
Georgia Front Page

Freddie Mac Extends Eviction Suspension Until March, Launches Rental Option for Foreclosed Borrowers, Tenants

/PRNewswire-FirstCall/ -- Freddie Mac (NYSE:FRE) today announced it is extending its suspension of evictions triggered by foreclosures on single family properties with Freddie Mac-owned mortgages through February 28, 2009. Freddie Mac is simultaneously launching a new strategy to offer qualified owner-occupants and tenants leases so they can rent the properties on a month-to-month basis after foreclosure.

"First and foremost, Freddie Mac's REO Rental Option is intended to help cushion the impact of foreclosure on families who own or rent homes with Freddie Mac-owned mortgages," said David M. Moffett, Chief Executive Officer of Freddie Mac. "At the same time keeping foreclosed properties occupied and in better repair will support local property values and promote a faster recovery in the housing market."

Under the REO Rental Option, leases will be offered to current renters on a month-to-month basis at market rents or the rent amount they were paying prior to foreclosure, whichever is less. The rent for former owner-occupants will be the market rent, which will determined by the property management firm Freddie Mac contracted to manage the program.

To qualify, current tenants and former owner-occupants must be able to demonstrate they have adequate income to pay the monthly rental amount. The home must also meet applicable building codes, or can be affordably brought into compliance, to be eligible.

Freddie Mac will also explore loan modification options that may enable owner-occupants to retain ownership of their homes by reinstating their mortgage with modified terms.

"In about half of all foreclosure sales there is no conversation between the borrower and the mortgage servicer about workouts. Before starting the eviction process, we want to ensure there is one last effort to achieve a workout," explained Ingrid Beckles, Senior Vice President of Default Asset Management at Freddie Mac.

In 2008 Freddie Mac approved more than 87,485 workouts, enabling three out of five of its seriously delinquent borrowers to avoid foreclosure.

Freddie Mac gives lenders servicing its mortgages broad authority to help troubled borrowers before they miss a payment through forbearance as well as provide permanent rate reductions, mortgage term extensions or other modifications to borrowers who are already delinquent. Freddie Mac workout options include the Streamlined Modification Program developed with Fannie Mae, the Federal Housing Finance Agency (FHFA), HOPE Now and 27 mortgage servicers to expedite loan modifications for eligible borrowers who have missed three or more mortgage payments. (For more about Freddie Mac workout options, see freddiemac.com/avoiding_foreclosure.)

Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation's residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Over the years, Freddie Mac has made home possible for one in six homebuyers and more than five million renters.

-----
www.fayettefrontpage.com
Fayette Front Page
www.georgiafrontpage.com
Georgia Front Page

Freddie Mac Extends Suspension of Single Family Foreclosure Sales, Evictions Until January 31, 2009

/PRNewswire-FirstCall/ -- Freddie Mac (NYSE:FRE) today announced it is extending its suspension of all foreclosure sales and evictions involving occupied single family and 2-4 unit properties with Freddie Mac-owned mortgages through January 31, 2009. The suspension does not apply to vacant single family properties.

"Freddie Mac is committed to pursuing every responsible opportunity to reduce foreclosures and accelerate the return of stability to the U.S. housing market," said Freddie Mac Chief Executive Officer David M. Moffett. "Today's announcement will provide Freddie Mac and its servicers additional opportunities to help put more families on the path to stable homeownership."

The extension will also provide servicers with more time to help troubled borrowers find an alternative to foreclosure and implement the Streamlined Modification Program that went into operation on December 15, 2008. Developed by Freddie Mac, Fannie Mae, the Federal Housing Finance Agency (FHFA), HOPE Now and 27 mortgage servicers, the Streamlined Modification Program was designed to expedite loan modifications for eligible borrowers who have missed three or more mortgage payments.

Freddie Mac gives lenders servicing its mortgages broad authority to help troubled borrowers before they miss a payment through forbearance as well as provide permanent rate reductions, mortgage term extensions or other modifications to borrowers who are already delinquent. In 2008 Freddie Mac enabled three out of five of its delinquent borrowers avoid foreclosure. (For more about Freddie Mac workout options, see freddiemac.com)

-----
www.fayettefrontpage.com
Fayette Front Page
www.georgiafrontpage.com
Georgia Front Page

The Industry Responds - Fannie Mae and Freddie Mac, New Guidelines

RISMEDIA - With Fannie and Freddie’s financial troubles sending shockwaves through the country, leaders in the industry have stepped up to the plate, offering their take on what the latest developments mean for those effected most-the consumers.

“The National Association of Realtors® welcomes the strong response this weekend by the Treasury Department and the Federal Reserve Board in response to the market turmoil and apparent overreactions that began last week affecting Fannie Mae and Freddie Mac,” said National Association of Realtors® President Richard F. Gaylord. “The health of the American economy depends on Fannie Mae and Freddie Mac and the steps taken by the U.S. government make clear that the role of Fannie and Freddie, in making fair and affordable mortgage loans available for home owners and home buyers, must not and cannot be interrupted.

“We support the federal government’s actions and authorization to help ensure the ability of Fannie Mae and Freddie Mac to promote the availability of home mortgage credit during a period of stress in the financial markets. Fannie and Freddie play a central role in our housing finance system, and we agree that they must continue to do so as we work through the current housing correction,” he said.

Speaker Nancy Pelosi also commented on the Bush Administration’s proposals on Fannie Mae and Freddie Mac.

“Fannie Mae and Freddie Mac have historically played a vital role in the supply of home mortgages for lower- and middle-income Americans, and particularly in the current economic downturn,” she said in a statement. “This weekend, Treasury Secretary Henry Paulson proposed additional measures to restore confidence in the strength of Fannie Mae and Freddie Mac, which we must do. It is essential that this legislation become the law of the land.

“Under the leadership of Chairman Barney Frank, in April 2007 and in May of this year, the House passed significant reform of Fannie Mae and Freddie Mac as part of comprehensive housing legislation that helps homeowners and renters and stabilizes the housing market. With Chairman Frank and Chairman Charlie Rangel again leading the way, Congress will soon pass comprehensive housing legislation that will include the Administration’s proposals on Fannie Mae and Freddie Mac and provide additional affordable mortgage loan options, offer new refinancing opportunities for families at risk of foreclosure, increase the nation’s stock of affordable rental housing, and expand homeownership opportunities for veterans living in high-cost areas.

“The legislation also strengthens and streamlines the low-income housing tax credit, ensuring that even more hardworking Americans will be able to access affordable housing,” she said.

What’s more, the Federal Reserve’s Board of Governors approved the Board’s final rules under the Home Ownership and Equity Protection Act (HOEPA). The rule prohibits unfair, abusive or deceptive home mortgage lending practices and restricts certain other mortgage practices. The final rule also establishes advertising standards and requires certain mortgage disclosures to be given to consumers earlier in the transaction.

Kieran P. Quinn, CMB, chairman of the Mortgage Bankers said, “These rules are a thoughtful effort to tackle difficult concerns and attempt to balance the need for new standards against the need for available, relatively low cost mortgage credit. MBA is carefully reviewing aspects of the rules including the new standards for determining which loans are treated as subprime thus demanding further protection. MBA strongly believes that it is essential for credit not to be unduly restricted.

“Notably the Board withdrew, for further consideration, its proposal to improve disclosure of mortgage broker compensation. We encourage the Board to work with the Department of Housing and Urban Development (HUD), which has also been working on this issue, so that the Government’s approach to this problem is coordinated in order to better protect American consumers.”

In other housing news, NAR announced their pledge to support finalizing the housing stimulus bill. The U.S. Senate has passed a bipartisan housing stimulus bill that “is a big step toward helping people buy and keep their homes,” said National Association of Realtors® President Dick Gaylord. The Senate action moves a housing stimulus package closer to law, which would help bring stability to the housing market and stop the rising rate of foreclosures.

“We are eager for the House and Senate to come together to finalize an aggressive bill that will ensure that every American who can afford to own a home and wants to do so will have the opportunity, and that every American who responsibly owns a home is able to keep it,” said Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif.

NAR has expressed ongoing support for many of the provisions in the legislation, including Federal Housing Administration Modernization that will simplify and make FHA-backed mortgages more available, a tax credit for first-time home buyers, reform of government-sponsored enterprises Fannie Mae and Freddie Mac, permanent increases to both GSE and FHA loan limits, and a program to expand FHA that would allow more mortgages to be refinanced.

“The tax credit for first-time home buyers would be a strong stimulus to a weak housing market, and FHA stabilization should help thousands of families refinance existing mortgages and in many cases keep their homes,” said Gaylord.