source:
  type: guide
  id: fhlmc-3302.2
  authority: Freddie Mac Single-Family Seller/Servicer Guide Section 3302.2 — Security
    and contingency measures
  description: Freddie Mac Single-Family Seller/Servicer Guide Section 3302.2 — Security
    and contingency measures.
  coverage_tier: operative
obligations:
- id: fhlmc-3302.2-full
  canonical_id: fhlmc-3302.2-full
  section: Freddie Mac Single-Family Seller/Servicer Guide Section 3302.2 — Security
    and contingency measures
  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 3302.2 — Security
      and contingency measures
    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: '3302.2: Security and contingency measures (12/17/25) This section
      contains requirements related to: ■ Damage or loss of Mortgage files ■ Transfer
      of Mortgage files; security of Mortgage file information (a) Damage or loss
      of Mortgage files The Servicer must bear the entire cost of promptly restoring
      Mortgage files and related documents and records damaged or lost for any reason.
      (b) Transfer of Mortgage files; security of Mortgage file information Freddie
      Mac may at any time require the Servicer to deliver the following documents
      to a Document Custodian approved by Freddie Mac or a transferee designated by
      Freddie Mac: ■ Any original Note, Security Instrument, assignment and modifying
      instrument still in the Servicer’s custody ■ Any Mortgage file, document within
      a Mortgage file or other related documents and records in the Servicer’s or
      its Document Custodian’s custody, whether maintained as originals or as copies
      in accordance with Section 3302.1(b) Freddie Mac Single-Family Seller/Servicer
      Guide Chapter 3302 As of 12/17/25 Page 3302-7 The Servicer may, without Freddie
      Mac’s prior approval, entrust custody of all or part of the Mortgage file to
      the Document Custodian holding Notes and assignments under Section 2202.1(b).
      When requested, the Servicer must be able to identify to Freddie Mac those file
      items held by the Document Custodian and document to Freddie Mac the Document
      Custodian’s acknowledgment that such file items: ■ Are Freddie Mac’s property
      ■ Will be maintained by the Document Custodian according to standards at least
      equal to those set in this chapter ■ Will be maintained in such a way as to:
      ❑ Ensure the security and confidentiality of the information, ❑ Protect against
      anticipated threats or hazards to the security or integrity of the information,
      and ❑ Protect against unauthorized access to or use of such information ■ Will
      be surrendered to Freddie Mac at any time Freddie Mac may request them The Servicer
      agrees to indemnify Freddie Mac and hold Freddie Mac harmless for any loss,
      damage or expense (including court costs and reasonable attorney fees) that
      Freddie Mac may incur as a result of the Document Custodian’s holding all or
      part of the Mortgage file. The Servicer must maintain a copy (in a form allowable
      under Section 3302.1(b)) of any original document that has been entrusted to
      the Document Custodian for safekeeping. If all or part of the Mortgage file
      is held by the Servicer’s Document Custodian, the Servicer agrees to recover
      from the Document Custodian (at the Servicer’s expense) and provide to Freddie
      Mac (at the place and within the time frame specified by Freddie Mac) any Document
      Custodian-held original document requested by Freddie Mac for the postfunding
      quality control detailed in Chapter 3301 or in conjunction with a Freddie Mac
      desktop or on- site review of the Servicer’s Servicing operations. Freddie Mac
      Single-Family Seller/Servicer Guide Chapter 3401 As of 03/04/26 Page 3401-1
      Chapter 3401: Freddie Mac’s Postfunding Quality Control Review 3401.1: Postfunding
      quality control processes (12/17/25) This section contains requirements related
      to: ■ Postfunding quality control ■ Credit enhancer postfunding review (a) Postfunding
      quality control (i) Defined terms As used in this Section 3401.1(a), the following
      terms have the meanings ascribed to them below: Defined terms related to postfunding
      quality control C Component Based Review Freddie Mac’s postfunding quality control
      review of certain components of the Mortgage file. A Component Based Review
      does not constitute a Full-File Review. Correction Action taken by the Seller/Servicer,
      typically through delivery of documentation or information to Freddie Mac, that
      demonstrates that the identified Significant Defect: ■ Did not, in fact, exist
      at the time of Mortgage purchase, or ■ Has been corrected in the time frame
      and manner specified in the Purchase Documents such that the Defect is no longer
      considered by Freddie Mac to be a Significant Defect Examples of Corrections
      include, but are not limited to, De Minimis Corrections and the acquisition
      of required insurance. Counterparty Status Freddie Mac’s assessment of a Seller/Servicer’s
      financial capacity that could determine which Remedy Freddie Mac will offer
      to a Seller/Servicer for a Mortgage with a Significant Defect. Freddie Mac Single-Family
      Seller/Servicer Guide Chapter 3401 As of 03/04/26 Page 3401-2 Defined terms
      related to postfunding quality control D Defect A loan-level deficiency that
      breaches a term contained in the Purchase Documents in effect at the time of
      Mortgage purchase. De Minimis Correction Minor amount not to exceed $500 (or
      such higher amount as the Seller/Servicer and Freddie Mac may agree) that, when
      remitted, refunded or otherwise provided, corrects or otherwise resolves an
      identified Significant Defect. A De Minimis Correction cannot be made: ■ In
      connection with any Mortgage where the correction would result in a specific
      required minimum Borrower contribution not being met, or ■ To correct a violation
      of the requirements set forth in the Freddie Mac Charter Act P Price-Adjusted
      Loan (PAL) One or more Defects that, when considered with other Mortgage features
      and based on the facts of the Mortgage as delivered to Freddie Mac, result in
      a Mortgage that was otherwise eligible for delivery to Freddie Mac had the correct
      data been delivered and Credit Fees been paid to Freddie Mac by the Seller/Servicer.
      R Remedy An action to resolve a Significant Defect elected by Freddie Mac pursuant
      to the Purchase Documents in effect at the time of Mortgage purchase. Repurchase
      Alternative Remedies other than repurchase of the identified Mortgage. Repurchase
      Alternatives could include, but are not limited to: ■ Performing loans ❑ Recourse/repurchase
      agreement ❑ Indemnification agreement ❑ Mortgage insurance stand-in agreement
      ❑ Collateralized indemnification agreements (collateral in lieu of repurchase
      or collateralized recourse) ❑ Fee-only agreement ■ Non-performing loans Freddie
      Mac Single-Family Seller/Servicer Guide Chapter 3401 As of 03/04/26 Page 3401-3
      Defined terms related to postfunding quality control ❑ Make-whole payment ❑
      Split loss ❑ Loss reimbursement S Significant Defect One or more Defects that
      either necessitate a change to the price for which the Mortgage was purchased
      or result in the Mortgage being unacceptable for purchase had the true and accurate
      information about the Mortgage been known at time of purchase. Mortgages with
      Findings and PALs are not Mortgages with Significant Defects. In determining
      whether there is a Significant Defect, Freddie Mac must give due consideration
      to the severity of the Defect. In addition, in order to be a Significant Defect,
      the Defect must relate to one of the following: ■ The underwriting of the Borrower’s
      creditworthiness and capacity (e.g., Borrower’s income, Borrower credit/liabilities
      and Borrower assets) or Borrower eligibility and qualification (e.g., Area Median
      Income, First-Time Homebuyer, lawful presence in the United States) ■ The underwriting
      criteria related to property or project eligibility (e.g., residential use and
      condominium eligibility), the property appraisal or the physical condition of
      the Mortgaged Premises ■ Mortgage or product terms and criteria (e.g., products
      that may require special Seller/Servicer approval as a prerequisite for delivery
      and the criteria described in the Purchase Documents such as loan-to-value (LTV)
      ratio, occupancy, Credit Score, Mortgage purpose and Mortgage Product, and terms
      such as ineligible transaction types and limitations on cash out to the Borrower
      that determines the type of refinance) or any terms and criteria set forth in
      any negotiated provision) ■ A life-of-loan representation and warranty (as described
      in Section 1301.6) ■ Requirements applicable at time of Mortgage purchase (e.g.,
      no defaults, all taxes and insurances have been paid or escrows established
      and no modification, encumbrance, subordination or release of Mortgage) ■ The
      warranties and obligations of Seller/Servicer set forth in Section 3101.1 regarding
      the Freddie Mac Exclusionary List, Freddie Mac Single-Family Seller/Servicer
      Guide Chapter 3401 As of 03/04/26 Page 3401-4 Defined terms related to postfunding
      quality control available via Freddie Mac Gateway, or in Section 3101.2 regarding
      the FHFA Suspended Counterparty Program ■ The existence, sufficiency or enforceability
      of any required insurance or guaranty, or ■ The form and/or execution of Freddie
      Mac-required Mortgage documents that without which make the Mortgage ineligible
      for sale or limit the enforceability of the required Mortgage terms (e.g., Uniform
      Residential Loan Application, power of attorney, Texas 50(a)(6) Mortgage documents
      or nonstandard and special purpose documents such as Living Trusts) (ii) General
      quality control policy Freddie Mac reserves the right to conduct a postfunding
      quality control review of any Mortgage sold to Freddie Mac. This review may
      be a Component Based Review or a Full-File Review. Freddie Mac will underwrite
      each Mortgage selected for postfunding quality control review to verify that
      the Mortgage: ■ Is of investment quality (as defined in Section 4201.1), ■ Is
      based on a determination that the Borrower has acceptable credit reputation
      and capacity, ■ Is secured by collateral that is adequate for the transaction,
      and ■ Otherwise complies with Freddie Mac’s underwriting guidelines and other
      requirements set forth in the Purchase Documents, including compliance with
      applicable anti-predatory lending laws Freddie Mac’s determination of whether
      a Mortgage is of investment quality and otherwise complies with all requirements
      of the Purchase Documents is conclusive, unless the IDR Process described in
      Section 3602.4(b) is elected, in which case the decision of the Neutral (as
      such term is defined in the IDR Document) shall be binding. (iii) FICO® scores
      Freddie Mac Single-Family Seller/Servicer Guide Chapter 3401 As of 03/04/26
      Page 3401-5 Freddie Mac obtains FICO scores for Mortgages purchased and uses
      such scores and the accompanying reason codes as one of the sampling criteria
      for postfunding quality control reviews. If the Seller delivers and documents
      an Indicator Score in accordance with the provisions of Section 5202.1, Freddie
      Mac will use the Seller-delivered score. (iv) Reviewing Accept Mortgages For
      Accept Mortgages, the Borrower will be considered creditworthy and no further
      assessment of Borrower creditworthiness will be made in the postfunding review
      if: ■ The Seller has submitted to Loan Product Advisor® all required information
      and has complied with the terms applicable to Accept Mortgages in the Guide
      ■ The information submitted is true, complete, accurate and documented in the
      loan file (v) Mortgage file submission requirements Freddie Mac will notify
      the Seller/Servicer via e-mail that certain Mortgages have been selected for
      postfunding quality control review and will provide a checklist of documents
      that must be submitted to Freddie Mac for each selected Mortgage. Unless otherwise
      instructed by Freddie Mac, the Seller/Servicer must submit: ■ All credit, income,
      employment, collateral and asset documentation used by the Seller to make the
      Mortgage underwriting decision, ■ The documents listed in Sections 3401.2(a)
      through 3401.5(c), as applicable, ■ The source documentation for any Indicator
      Score, ■ Any other documents listed on the checklist, and ■ If requested by
      Freddie Mac, any other Mortgage-related documents that the Seller/Servicer is
      required to maintain in the Mortgage file, including any documents required
      under the Guide or other Purchase Documents In addition, for nonperforming Mortgages
      requested for postfunding quality control review, the checklist includes records
      of all collection efforts. This includes Borrower contacts, property inspections,
      attempts to develop a workout plan and bankruptcy and/or foreclosure tracking
      logs and notes. Freddie Mac Single-Family Seller/Servicer Guide Chapter 3401
      As of 03/04/26 Page 3401-6 The Seller/Servicer must provide all documents indicated
      on the applicable postfunding quality control checklist in an electronic media
      format and file size as specified on the Freddie Mac Quality Control webpage
      located at https://sf.freddiemac.com/general/specifications-for-electronic-file-delivery-for-qc-
      loan-file-reviews. Freddie Mac reserves the right, at its sole discretion, to
      take appropriate action if a Seller/Servicer fails to deliver the required documents
      in the specified media format and file size. Such action may include, but is
      not limited to, assessing a noncompliance fee to cover costs incurred by manually
      processing file deliveries. Although all documentation sent to Freddie Mac may
      be considered in the postfunding quality control review, trended credit data
      (as described in Section 5202.1(c)) will not be considered. The Seller/Servicer
      is responsible for ensuring the accuracy and authenticity of all documentation
      in the Mortgage file. Freddie Mac must receive requested Mortgage files, containing
      all specified documentation, within 30 days after the request for postfunding
      quality control review. If the requested Mortgage file is not received within
      this time frame, Freddie Mac may issue a repurchase request. Failing to submit
      the Mortgage file as requested may result in a Seller’s or Servicer’s suspension
      or disqualification. However, Freddie Mac may, at its discretion, specify a
      shorter or longer period for the receipt of the requested Mortgage files. Finally,
      an offer by the Seller/Servicer to repurchase the Mortgage does not exempt them
      from submitting the required documents for postfunding quality control. (vi)
      Process for remedying selling and origination defects The steps below describe
      the process that Freddie Mac will follow to categorize Defects, allow Corrections
      to Defects and remedy Defects through either a repurchase request or Repurchase
      Alternative. 1. Identification of Defects After a postfunding quality control
      review is completed, Freddie Mac will designate any Defect(s) as resulting in
      one of the following: ■ A Finding ■ A PAL Freddie Mac Single-Family Seller/Servicer
      Guide Chapter 3401 As of 03/04/26 Page 3401-7 ■ A Significant Defect Freddie
      Mac’s Remedy letters will detail the specific Significant Defects found during
      the quality control review. If Freddie Mac designates the Defect as resulting
      in a Finding, Freddie Mac will not require a Correction or a Remedy from the
      Seller/Servicer. However, Freddie Mac may request a data update from the Seller/Servicer.
      If Freddie Mac designates the Defect as resulting in a PAL, the Seller/Servicer
      must pay to Freddie Mac the applicable Credit Fees that should have been paid
      when the Mortgage was purchased by Freddie Mac had the true and accurate facts
      about the Mortgage been known at the time of purchase, which will be paid in
      accordance with Section 6303.2(a). Freddie Mac may not demand repurchase of
      a PAL. Note: The Seller/Servicer may not voluntarily repurchase a PAL. If Freddie
      Mac identifies a Significant Defect, Freddie Mac will require repurchase of
      the Mortgage or may offer the Seller a Repurchase Alternative. Freddie Mac also
      checks for data discrepancies (which could be independent of a Full-File Review)
      that may result in the assessment of or an adjustment to a Credit Fee. 2. Correcting
      certain significant Defects During the Appeal Process described in Section 3602.4(b),
      a Seller/Servicer has the right to provide a Correction of any Significant Defects.
      Any additional documentation or information that the Seller/Servicer provides
      is subject to the same standard of quality control review as the initial Mortgage
      file documentation. The documentation submitted to correct a Significant Defect
      must be based on information or data that either: ■ Was available at the time
      of underwriting (and no later than the Note Date), or ■ Covers the time of underwriting
      so long as such evidence meets the applicable documentation requirements set
      forth in the Purchase Documents During the appeals process, Seller/Servicers
      have the ability to correct Defects related to property, flood or mortgage insurance.
      If a Seller/Servicer does not repurchase the Mortgage or perform any Repurchase
      Alternative in accordance with the Purchase Documents, such Seller/Servicer
      continues to have the obligation to correct any Significant Defect in accordance
      with the Purchase Documents. Freddie Mac Single-Family Seller/Servicer Guide
      Chapter 3401 As of 03/04/26 Page 3401-8 3. Freddie Mac review of Seller response
      and Mortgage reassessment During the Appeal Process described in Section 3602.4(b),
      Freddie Mac reassesses a Mortgage by reviewing any Corrections submitted by
      the Seller/Servicer according to the applicable Purchase Documents to determine
      if a Significant Defect remains. If the Seller/Servicer provides additional
      documentation or information or takes necessary steps that correct all Significant
      Defects per the Purchase Documents, Freddie Mac will rescind the Remedy request.
      However, if after reassessment any Significant Defects have not been corrected
      according to the Purchase Documents, the Seller/Servicer must promptly comply
      with the Remedy request. If the reassessment leads Freddie Mac to classify the
      Mortgage as a PAL, the Seller/Servicer must remit the applicable Credit Fees
      to Freddie Mac per Section 6303.2. These fees reflect what should have been
      paid at the time of Mortgage purchase had the true facts been known. Throughout
      the appeals process, the Seller/Servicer can propose a Repurchase Alternative
      upon identification of a Significant Defect. Freddie Mac will consider this
      proposal in good faith and respond accordingly. Nonetheless, Freddie Mac can
      offer or decline Repurchase Alternatives depending on the Seller/Servicer’s
      Counterparty Status, especially where future obligations are involved. Other
      factors for consideration may include the Seller/Servicer’s quality of loan
      origination and their capacity and willingness to honor other Purchase Document
      provisions. If a Mortgage has multiple Significant Defects and the Seller/Servicer
      manages to correct only some, Freddie Mac may pursue repurchase or other alternatives
      as a Remedy if Significant Defects persist after reassessment. Conversely, if
      all Significant Defects are rectified, yet a defect still classifies the Mortgage
      as a PAL post-reassessment, Freddie Mac will notify the Seller/Servicer of the
      due Credit Fee, which must be paid in alignment with Section 6303.2. 4. Range
      of possible outcomes (A) Finding If the Mortgage has had a Full-File Review
      completed with only Findings discovered, the Seller/Servicer will be relieved
      from Freddie Mac’s enforcement of certain selling representations and warranties
      related to such Mortgage (as described in Section 1301.6(a)), provided all other
      requirements in Section 1301.6 are met. If a Mortgage has not had a Full-File
      Review, the Seller/Servicer may still be relieved from Freddie Mac’s enforcement
      of certain selling representations and Freddie Mac Single-Family Seller/Servicer
      Guide Chapter 3401 As of 03/04/26 Page 3401-9 warranties through other provisions
      under the selling representation and warranty framework described in Section
      1301.6. (B) PAL The appeals process for a PAL will result in one of the following
      outcomes: ■ Rescission of the request for the payment of the Credit Fee, or
      ■ Payment of the Credit Fee If a PAL has undergone a Full-File Review and no
      Significant Defects have been identified, the Seller/Servicer will be relieved
      from Freddie Mac’s enforcement of certain selling representations and warranties
      related to that Mortgage (as outlined in Section 1301.6(a)) once the Seller/Servicer
      pays the Credit Fee and meets all other requirements specified in Section 1301.6.
      Conversely, for a PAL that has not had a Full-File Review, the Seller/Servicer
      will not be relieved from Freddie Mac’s enforcement of the aforementioned selling
      representations and warranties upon payment of the Credit Fee. However, the
      Seller/Servicer may still achieve relief from enforcement of certain selling
      representations and warranties through other provisions within the selling representation
      and warranty framework described in Section 1301.6. (C) Significant Defects
      The appeals process for Mortgages with Significant Defects may result in a range
      of outcomes, including: ■ Rescission of the Remedy request, ■ Agreement on a
      Repurchase Alternative, or ■ Fulfillment of the Remedy request If Freddie Mac
      offers a Repurchase Alternative after a repurchase demand has been issued, the
      Seller/Servicer has the option to repurchase the Mortgage instead of accepting
      the Repurchase Alternative. If a Mortgage with a Significant Defect has had
      a Full-File Review, the Seller/Servicer will be relieved from Freddie Mac’s
      enforcement of certain selling representations and warranties related to such
      Mortgage (as described in Section 1301.6(a)) if: ■ All Significant Defects have
      been corrected, or Freddie Mac Single-Family Seller/Servicer Guide Chapter 3401
      As of 03/04/26 Page 3401-10 ■ A Repurchase Alternative has been offered, accepted
      and fully executed and completed by the Seller/Servicer in compliance with any
      related terms, including the expiration of all applicable time frames, provided
      all other requirements set forth in Section 1301.6 are met At its sole discretion,
      Freddie Mac, in addition to its other contractual and legal remedies, will require
      repurchase of each Mortgage that does not comply with the requirement(s) set
      forth in the Purchase Documents to submit requested Mortgage documentation for
      postfunding quality control review within the allotted time, unless the IDR
      Process is elected, in which case the decision of the Neutral (as such term
      is defined in the IDR Document) shall be binding. (b) Credit enhancer postfunding
      review Freddie Mac may choose to obtain a credit enhancement on some or all
      of the Mortgages it purchases, either concurrently with or after the Mortgage
      purchase. In such cases, the Seller, as the Servicer, or any transferee Servicer
      may receive an electronic request from Freddie Mac to supply the credit enhancer
      with Mortgage files or other Mortgage information or documentation (“Mortgage
      information”) for the credit-enhanced Mortgages. Freddie Mac’s request will:
      1. Identify the credit enhancer requesting the Mortgage information 2. Authorize
      the release of specific Mortgage information 3. Provide the name and contact
      details for the individual at the credit enhancer to whom the Mortgage information
      should be directed The Seller or transferee Servicer must provide the Mortgage
      information by either: ■ 30 days after receiving the request, or ■ The written
      deadline agreed upon between the credit enhancer and the Seller or transferee
      Servicer For each request for Mortgage information: ■ The Seller or transferee
      Servicer will not receive notice regarding any action taken by the credit enhancer
      ■ If the Seller or transferee Servicer fails to cooperate with the credit enhancer
      and this jeopardizes Freddie Mac’s ability to maintain the credit enhancement,
      Freddie Mac may exercise any rights and remedies under the relevant Purchase
      Documents Freddie Mac Single-Family Seller/Servicer Guide Chapter 3401 As of
      03/04/26 Page 3401-11 Requests for Mortgage information by a credit enhancer
      do not alter Freddie Mac’s rights under the Purchase Documents, including the
      right to conduct a future quality control review of the Mortgages and to issue
      remedies for Mortgages Freddie Mac deems ineligible. As outlined in Section
      1301.5(d), the Seller’s representations and warranties remain unaffected by
      investigations carried out by the credit enhancer or subsequent investigations
      by, or on behalf of, Freddie Mac.'
  judgment: false
