Freddie to Buy Loans on Katrina-Damaged Properties

Freddie Mac has announced an easing of certain policies in order to purchase an estimated $300 million in single-family mortgages that were closed between June 1 and Aug. 29 and are secured by properties in areas heavily damaged by Hurricane Katrina.The government-sponsored enterprise said the announcement is aimed at helping lenders with loans in their pipelines that may no longer be eligible for sale because of potential property damage or income loss caused by the storm, even though the lenders complied with Freddie Mac's seller/servicer origination guidelines. The loans will be purchased for Freddie's retained portfolio "to provide lenders with immediate liquidity relief," although none of the loans will be placed into mortgage pools backing Freddie Mac Mortgage Participation Certificates, the GSE said. The purchase offer expires Oct. 31. "By purchasing these loans we can expedite payments to our lenders, who need additional funds for storm recovery activities, while simultaneously protecting the loan pools backing Freddie Mac PCs from Katrina's impact," said Richard F. Syron, Freddie's chairman and chief executive officer. Mr. Syron thanked the GSE's regulators -- the Department of Housing and Urban Development and the Office of Federal Housing Enterprise Oversight -- for "expeditiously reviewing" the policy.