Freddie Mac said last week it will extend its foreclosure suspension until May 31, 2006, in 21 counties and parishes in Alabama, Louisiana, Mississippi and Texas that suffered the most severe damage due to hurricanes Katrina and Rita. At the same time, Freddie Mac said it would lift the moratorium on foreclosures in areas that experienced the least damage.

The announcement was made in a February 10 Guide Bulletin sent to Freddie Mac’s seller/servicers.

“We are replacing our one-size-fits all approach with a zone approach,” said Janet Eakes, senior vice president of Freddie Mac’s operations division.

According to the February 10 Guide Bulletin, the zone approach divides the 120 Gulf Coast counties covered by last year’s foreclosure moratorium into three separate zones and applies appropriate policies to each.

Specifically, Freddie Mac is extending its foreclosure moratorium through May 31 in Zone 3, which includes the 21 counties and parishes in federally designated disaster areas where Federal Emergency Management Agency individual assistance is available; Freddie Mac is requiring servicers to obtain Freddie Mac’s prior approval before initiating a foreclosure in Zone 2, which includes 34 counties and parishes with less severe damage; and Freddie Mac is lifting its blanket foreclosure moratorium in Zone 1, the remaining 65 counties where there was no or minimal storm damage.

Freddie Mac, however, is strongly encouraging servicers to extend mortgage relief to borrowers with Freddie Mac loans on a case-by-case basis regardless of Zone. Freddie Mac authorizes servicers to provide a wide range of mortgage relief to storm victims, including forbearance for up to one year from the date of the disaster. (Freddie Mac mortgage relief options are described in the “Owning and Keeping a Home” section on

The February 10 Guide Bulletin instructs servicers to help borrowers strengthen their credit reputations by reporting timely mortgage payments to credit reporting agencies as they bring their mortgages current. Until then, the bulletin reminds servicers not to report storm-related forbearances or bankruptcies to credit bureaus and to waive prepayment premiums for storm victims in some cases.

For more information, lenders can contact their Freddie Mac account representative or review the February 10 Guide Bulletin online.

Freddie Mac is a stockholder-owned company established by Congress in 1970 to support home ownership and rental housing.


Send tips or a Letter to the Editor to or call (510) 658-9252, ext. 133.

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