source:
  type: guide
  id: fhlmc-4703.7
  authority: Freddie Mac Single-Family Seller/Servicer Guide Section 4703.7 — Localized
    perils insurance
  description: Freddie Mac Single-Family Seller/Servicer Guide Section 4703.7 — Localized
    perils insurance.
  coverage_tier: operative
obligations:
- id: fhlmc-4703.7-full
  canonical_id: fhlmc-4703.7-full
  section: Freddie Mac Single-Family Seller/Servicer Guide Section 4703.7 — Localized
    perils insurance
  type: do
  tags:
  - regulator-direct
  - fhlmc
  - freddie-guide
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: Freddie Mac Single-Family Seller/Servicer Guide Section 4703.7 — Localized
      perils insurance
    source_class: fhlmc-guide
    source_url: https://guide.freddiemac.com/ci-guide
    snapshot_id: 5869ee9e606cd4ae
    fetched_at: '2026-05-23T00:27:40Z'
    content_hash: sha256:9a1b23e5024bb369e7a59d36b3702383c11ace68b5d209fdef791bc8f955c637
    paragraph_quote: '4703.7: Localized perils insurance (06/10/20) If the Seller/Servicer
      becomes aware of localized perils (i.e., sinkhole, mine subsidence, volcanic
      eruption, landslides) that are not covered by standard property insurance, then
      the Seller/Servicer must require the Borrower to obtain appropriate insurance
      coverage in accordance with the terms of the Security Instrument and applicable
      law. Freddie Mac Single-Family Seller/Servicer Guide Chapter 5101 As of 02/04/26
      Page 5101-1 Chapter 5101: Using Loan Product Advisor® 5101.1: General information
      for using Loan Product Advisor® (02/04/26) This section contains information
      related to: ■ Loan Product Advisor® overview ■ Note Date references ■ Loan Product
      Advisor Mortgages ■ Non-Loan Product Advisor Mortgages ■ Feedback Certificate
      ■ Documentation requirements ■ Key Number ■ Number of Borrowers ■ Data accuracy
      and compliance with other Loan Product Advisor requirements (a) Loan Product
      Advisor overview Loan Product Advisor is Freddie Mac’s automated loan assessment
      system that indicates whether a Mortgage is eligible for sale to Freddie Mac
      and whether the Seller is eligible for relief from certain representations and
      warranties, subject to the requirements of the Guide and the Seller’s other
      Purchase Documents. (b) Note Date references For purposes of this Chapter 5101,
      all references to the Note Date also refer to the modification date for Seller-Owned
      Modified Mortgages that are Home Possible® Mortgages, or the Effective Date
      of Permanent Financing for Construction to Permanent Mortgages and Renovation
      Mortgages, as applicable. (c) Loan Product Advisor Mortgages A Mortgage qualifies
      as a Loan Product Advisor Mortgage when all of the following requirements are
      met: Freddie Mac Single-Family Seller/Servicer Guide Chapter 5101 As of 02/04/26
      Page 5101-2 ■ The Mortgage was submitted to Loan Product Advisor for the first
      time no later than the Note Date ■ The last submission to Loan Product Advisor
      is no more than 120 days before the Note Date and no later than the Note Date
      except as otherwise permitted in Section 5101.3(c) for resubmissions after the
      Note Date ■ The Mortgage received Risk Class of Accept or Caution on the Feedback
      Certificate based on the last submission to Loan Product Advisor ■ The Mortgage
      complies with all the requirements of this Chapter 5101, including delivery
      of the Key Number in ULDD Data Point Automated Underwriting Case Identifier
      (d) Non-Loan Product Advisor Mortgages A Mortgage is a Non-Loan Product Advisor
      Mortgage if any of the following apply: ■ The Mortgage never was submitted to
      Loan Product Advisor ■ The Mortgage was submitted to Loan Product Advisor and
      did not receive a Risk Class of Accept or Caution ■ The Mortgage was submitted
      to Loan Product Advisor for the first time after the Note Date ■ The Mortgage
      was submitted to Loan Product Advisor but did not comply with this Chapter 5101
      ■ The Mortgage was submitted to Loan Product Advisor but was not eligible to
      be a Loan Product Advisor Mortgage under the Guide or the Seller’s other Purchase
      Documents ■ The Mortgage was submitted to Loan Product Advisor, but was delivered
      without the Key Number (e) Feedback Certificate Loan Product Advisor assesses
      data and returns a Feedback Certificate with the results of the Loan Product
      Advisor submission. The messages reflected on the Feedback Certificate are for
      guidance purposes only. These messages are not part of, and are not a replacement
      or substitute for, the requirements in the Guide and the Seller’s other Purchase
      Documents, unless specifically stated in the Guide or the Seller’s other Purchase
      Documents. Freddie Mac Single-Family Seller/Servicer Guide Chapter 5101 As of
      02/04/26 Page 5101-3 For Loan Product Advisor Mortgages, the Seller must retain
      the Last Feedback Certificate in the Mortgage file. (f) Documentation requirements
      The Documentation Level shown on the Last Feedback Certificate indicates the
      minimum level of documentation acceptable for the Mortgage (i.e., Streamlined
      Accept Documentation or Standard Documentation). Note: Refer to Chapter 5501
      for asset documentation requirements using Streamlined Accept or Standard Documentation.
      The Seller must have processes in place to ensure that the requirements on the
      Feedback Certificate and other applicable requirements of the Guide and the
      Seller’s other Purchase Documents are met. If the Mortgage delivered to Freddie
      Mac does not comply with the requirements of the Last Feedback Certificate,
      the Guide or the Seller’s other Purchase Documents, Freddie Mac may require
      additional documentation. (g) Key Number The Key Number is a unique identifier
      assigned to a Mortgage application by Loan Product Advisor when the application
      is first submitted to Loan Product Advisor. The Key Number is returned to the
      Seller on the Feedback Certificate and is used by the Seller and Freddie Mac
      to identify an individual Mortgage (e.g., a purchase or refinance) from application
      through closing and delivery. A Key Number is only valid for use with one Mortgage.
      The Key Number from a previously closed Mortgage may not be re-used to process
      or originate another Mortgage. Additionally, if the Borrower has more than one
      Mortgage in process, each loan must have a separate application and a different
      Key Number. A Key Number must be delivered for all Loan Product Advisor Mortgages.
      In addition, the following Mortgages must be submitted to Loan Product Advisor
      and a Key Number must be delivered, regardless of whether the Mortgage qualifies
      as a Loan Product Advisor Mortgage: ■ Super conforming Mortgages (see Section
      4603.4 for underwriting requirements) ■ Mortgages secured by Manufactured Homes
      (see Section 5703.7 for underwriting requirements and Section 6302.25 for special
      delivery requirements) (h) Number of Borrowers Loan Product Advisor cannot assess
      more than five Borrowers on a single application. When there are more than five
      Borrowers, the Seller must manually underwrite the Mortgage. Freddie Mac Single-Family
      Seller/Servicer Guide Chapter 5101 As of 02/04/26 Page 5101-4 (i) Data accuracy
      and compliance with Loan Product Advisor requirements The Seller represents
      and warrants that all data and information submitted to Loan Product Advisor
      that results in the Last Feedback Certificate is true, complete and accurate
      and matches the documentation maintained in the Mortgage file, except as otherwise
      permitted in Section 5101.3(b) or Chapter 4602 for Construction to Permanent
      Mortgages and Renovation Mortgages. If the Mortgage and/or the Seller fail to
      comply with all requirements for a Loan Product Advisor Mortgage, the benefits
      and terms associated with the Loan Product Advisor Mortgage will not apply,
      and the Mortgage will be subject to the requirements for a Non- Loan Product
      Advisor Mortgage and/or a Manually Underwritten Mortgage.'
  judgment: false
