Washington Watch Summer 1997

Freddie Mac Outlines Mortgage Payment Relief for Victims of Floodingin the Midwest

McLean, VA - Freddie Mac has issued a letter to its loan servicers, whomay have borrowers in the flood-damaged counties of North Dakota, SouthDakota and Minnesota, to remind them of the mortgage relief options availableto those eligible homeowners. Due to the severity and extensive nature ofthe flooding this spring, mortgage servicers have been asked to extend paymentrelief to qualified borrowers in the affected areas.

"Thousands of families have had their lives devastated by theflooding in the past few weeks. During this traumatic time, many borrowerswill face the enormous task of rebuilding or repairing their homes, as wellas possible unemployment resulting from the damage to their workplace,"said Paul T. Peterson, senior vice president of Freddie Mac's servicer division."We will work closely

with our loan servicers to help borrowers who have been impacted by thefloods and need help through this crisis."

Freddie Mac's disaster relief guidelines give its servicers the discretionto reduce or suspend mortgage payments for up to 12 months for borrowerswhose mortgages are owned by Freddie Mac. Each case will be individuallyassessed to determine what will help in a home owner's circumstances.

For information on mortgage payment relief, homeowners should contacttheir mortgage servicer, which is the company to which they send their mortgagepayment.

Freddie Mac is a stockholder-owned corporation chartered by Congressin 1970 to create a continuous flow of funds to mortgage lenders in supportof homeownership and rental housing. Freddie Mac purchases mortgages fromlenders and packages them into securities that are sold to investors.

The Officer Next Door Program from HUD

The Officer Next Door program is designed to encourage as many as 2,000city police officers around the country to live in poor communities wherethey work. This would strengthen neighborhoods, reduce crime and make areasmore attractive to homeownership. The program is expected to also makeofficers more sensitive and committed to serving communities where theylive.

The one-year initiative will give police officers a 50 percent discounton the purchase of HUD-owned foreclosed homes in designated inner city areas.For example, in Miami -- where the average price of a home is $112,000 --such a home in an eligible area could be sold to a police officer for $66,000.The downpayment for police buying homes with FHA mortgages will be just$100. Police officers participating in the program must live in the homesfor at least a year.

Five cities have already agreed to participate in the program: Cleveland;Miami/ Dade County; Kansas City, Missouri; Los Angeles; and Springfield,Massachusetts. In all, 24 cities are expected to participate.

Many cities across the country - including: Los Angeles; Portland,Oregon; Fort Wayne, Indiana; and Columbia, South Carolina - have implementedhome loan programs to encourage police to live in communities where theylive.

Police officers interested in participating in the program can call1-800-217-6970.