MC LEAN, Va. – Saying "Freddie Mac's action will go a long way toward bringing critically needed capital into the Gulf Region," HUD Secretary Alphonso Jackson commended Freddie Mac's decision to purchase an estimated $300 million worth of single-family mortgages that were closed between June 1 and August 20 and secured by properties in areas that were heavily impacted by Hurricane Katrina. Freddie Mac said it's short-term policy decision is intended to help some Freddie Mac lenders with closed loans in their pipelines . These loans, the company said, may no longer be eligible for sale because of potential property damage or income loss caused by Hurricane Katrina, even though they complied with Freddie Mac's Seller/Servicer Guide requirements when they were originated. Typically such loans are unacceptable to Freddie Mac, the company said, even with lifetime recourse. But given the special circumstances surrounding these mortgages, Freddie Mac said it would purchase the loans for its retained portfolio to provide lenders with immediate liquidity relief. None of the loans will go into mortgsage pools backing Freddie Mortgage Participation Certificates (PCs). The purchase offer expires on Oct. 31, 2005. It applies specifically to mortgages that met Freddie Mac's Seller/Servicer Guide requirements when they were originated and are backed by properties in federally declared major disaster areas where FEMA's Individual Assistance program is available for Katrina victims. All purchases of Katrina pipeline mortgages will be made under a special negotiated contract. Freddie Mac Chairman and CEO Richard Syron said, "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." -

[email protected]