Freddie Changes PC Delinquent Loan Policy

Freddie Mac has announced a change in its policy regarding the purchase of delinquent mortgage loans from pools underlying Mortgage Participation Certificates.Freddie said it will now generally purchase mortgages that are 120 days or more delinquent when they have been modified, the subject of a foreclosure sale, or delinquent for 24 months, or when the cost of guarantee payments to securityholders exceeds the cost of holding the nonperforming loans in its mortgage portfolio. "Freddie Mac believes that the historical practice of purchasing loans from PC pools at 120 days does not reflect the pattern of recovery for most delinquent loans, which more often cure or prepay rather than result in foreclosure," the company said. "Allowing the loans to remain in PC pools will provide a presentation of its financial results that better reflects Freddie Mac's expectations for future credit losses." Freddie can be found online at http://www.freddiemac.com.