source:
  type: guide
  id: fhlmc-9501.2
  authority: Freddie Mac Single-Family Seller/Servicer Guide Section 9501.2 — Firm
    minimum requirements
  description: Freddie Mac Single-Family Seller/Servicer Guide Section 9501.2 — Firm
    minimum requirements.
  coverage_tier: operative
obligations:
- id: fhlmc-9501.2-full
  canonical_id: fhlmc-9501.2-full
  section: Freddie Mac Single-Family Seller/Servicer Guide Section 9501.2 — Firm minimum
    requirements
  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 9501.2 — Firm
      minimum requirements
    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: '9501.2: Firm minimum requirements (09/10/25) This section contains
      information related to: ■ Standards and practices ■ Firm structure and resources
      ■ Experience and expertise ■ Compliance and ethics ■ Management and oversight
      ■ Technology and reporting ■ Diversity and communication The Servicer must ensure
      that all firms selected and retained to handle Freddie Mac Default Legal Matters
      meet the firm minimum requirements specified in this section (“Firm Minimum
      Requirements”) and all other applicable Freddie Mac requirements. The Firm Minimum
      Requirements are as follows. Freddie Mac Single-Family Seller/Servicer Guide
      Chapter 9501 As of 09/10/25 Page 9501-3 (a) Standards and practices (i) Firm
      practice The firm’s practice areas must include end-to-end: ■ Default-related
      legal services: foreclosure, bankruptcy, loss mitigation (e.g., deeds-in- lieu
      of foreclosure), default-related litigation and ■ REO-related legal services:
      eviction, REO closing and related litigation. The firm must: ■ Be familiar with
      industry standards in the jurisdiction in which it practices ■ Understand the
      jurisdiction legal processes and requirements in default-related and REO-related
      legal services; and ■ Understand the substantive legal issues in the jurisdiction
      (e.g., standing) Additionally, the Servicer must consider firm experience in
      the following areas: foreclosure mediation, the Fair Debt Collection Practices
      Act, title curative issues and general housing-related issues (e.g., rent control,
      Section 8, lead paint liability, health code violations, foreclosure redemption,
      confirmation and ratification, condominium associations, homeowners associations
      (HOAs), mobile home matters or Cooperative Share Loans (see Chapter 8801 for
      special Servicing requirements for Cooperative Share Loans)). The firm should
      also have some experience with delegation for loss mitigation. The Servicer
      must also consider the firm’s membership in default-related and REO- related
      trade and industry groups, attendance or participation in State bar associations,
      seminar and lecture participation and attendance and any other activities relevant
      to default-related and REO-related law practice. (ii) Timelines The Servicer
      must review the firm’s completion timelines and confirm that the firm is able
      to track, monitor and complete foreclosure and bankruptcy matters in compliance
      with applicable law and Freddie Mac timeline requirements, taking into consideration
      outside factors that impact compliance with Freddie Mac timelines such as new
      foreclosure requirements and court delays. (iii) Information privacy The firm
      must maintain physical, technical and procedural controls and effective information
      security and data management to: Freddie Mac Single-Family Seller/Servicer Guide
      Chapter 9501 As of 09/10/25 Page 9501-4 ■ Ensure the security and confidentiality
      of personally identifiable information (PII) and confidential information, whether
      in paper, electronic or other form ■ Protect against any threats or hazards
      to the security or integrity of such information; and ■ Protect against unauthorized
      access to or use of such information The firm must implement controls meeting
      or exceeding industry standards, including, as applicable, standards promulgated
      by the International Office for Standardization or National Institute for Standards
      and Technology. Specifically: ■ The firm must ensure that PII that is stored
      on the firm’s systems and workstations is encrypted at rest at all times ■ The
      firm must have secured storage for promissory notes and other original documents
      to prevent theft and to ensure protection against fire, flood or other damage
      ■ The firm may not perform, outsource or send to any affiliate outside of the
      United States or its territories any legal work on Freddie Mac-owned or guaranteed
      Mortgages, including any storage of Freddie Mac data ■ The firm may not send
      any PII underlying Freddie Mac-owned or guaranteed Mortgages outside the United
      States The firm must have written policies, procedures and processes in place
      by the date of the submission of the Servicer Selection Form related to protection
      of PII and fraud prevention, including policies, procedures and processes related
      to: ■ Background checks of all employees ■ Protection of PII ■ Fraud prevention
      and identification; and ■ Incident response and notification protocols for data
      breaches and other security incidents The Servicer must review and confirm that
      the firm meets these requirements for information security, data management,
      protection of PII and fraud prevention. (b) Firm structure and resources (i)
      One staffed office with physical presence in jurisdiction Freddie Mac Single-Family
      Seller/Servicer Guide Chapter 9501 As of 09/10/25 Page 9501-5 The Servicer must
      confirm that the law firm has at least one appropriately staffed office physically
      located in a jurisdiction in which the firm is retained for Freddie Mac Default
      Legal Matters. An appropriately staffed office means a physical brick and mortar
      office at which law firm employees regularly work that is not a place of residence
      and that contains the usual equipment and facilities necessary to operate a
      law practice. A law firm must be registered, licensed and/or permitted, as necessary,
      with the appropriate jurisdictional authorities for all jurisdictions in which
      it practices. (ii) Jurisdiction-wide coverage and use of local counsel The Servicer
      must ensure that the firm has the ability to cover foreclosure, bankruptcy,
      eviction, REO closing matters and default-related litigation throughout the
      jurisdiction. If the firm has partnerships or relationships with third parties
      (e.g., local counsel, trustee companies or title companies) that will perform
      or complete some aspect of the default- related and REO-related work, the Servicer
      must require the firm to: ■ Obtain disclosure from the firm regarding such relationships
      and the extent to which third parties will be relied upon, and ■ Determine whether
      the firm has a reasonable contingency plan for the loss of any of those relationships
      or operational processes In evaluating any such third-party relationship, the
      Servicer must consider the length of time the relationship has existed and the
      adequacy of the firm’s written policies to mitigate third-party risk. If a firm
      uses local counsel to handle matters within the jurisdiction, the Servicer must
      ensure that the firm has a process to select, manage and review the local counsel
      and their work product. The process must be designed to ensure that local attorneys
      are qualified and adequately trained and have a satisfactory history with respect
      to bar complaints, sanctions and similar matters. For a firm’s contested caseload
      (e.g., contested foreclosures and litigated cases), the firm’s reliance on local
      counsel must be minimal. Any use of local counsel for these matters must be
      structured so that the retained firm will direct and manage the local counsel
      on those matters. (iii) Firm capacity As of the date of the submission of the
      Servicer Selection Form via https://www.freddiemacsats.com/Security/Login, the
      Servicer must: ■ Confirm that the firm has the ability to accept additional
      referrals Freddie Mac Single-Family Seller/Servicer Guide Chapter 9501 As of
      09/10/25 Page 9501-6 ■ Confirm that the firm is not operating at full capacity,
      given the existing facilities, personnel and technology. Alternatively, the
      firm must outline to the Servicer’s satisfaction the steps and time frame necessary
      to be in a position to handle additional referrals while still maintaining appropriate
      firm-to-file and staff-to-file ratios. ■ Confirm that the firm has contingency
      plans to deal with a contraction in the market (iv) Insurance requirements The
      Servicer must confirm that the firm has an appropriate level of malpractice
      and errors and omissions insurance coverage in place or be able to obtain an
      appropriate amount of insurance by the date of the submission of the Servicer
      Selection Form. The appropriate level of insurance coverage will depend upon
      the total number of Freddie Mac and Fannie Mae files the firm is managing or
      expects to manage when being evaluated by the Servicer. The firm must have the
      ability to obtain the appropriate amount of insurance coverage under the requirements
      as follows: ■ Tier I: Volume of 0–4,499 foreclosure matters, coverage of not
      less than $1 million per occurrence with an aggregate of not less than $3 million
      ■ Tier II: Volume of 4,500–19,999 foreclosure matters, coverage of not less
      than $5 million per occurrence with an aggregate of not less than $5 million;
      and ■ Tier III: Volume of 20,000 or more foreclosure matters, coverage of not
      less than $8 million per occurrence with an aggregate of not less than $8 million
      The required level of insurance is determined by the higher of the Freddie Mac
      or Fannie Mae pending foreclosure volume. Example: If a firm had 2,000 Freddie
      Mac foreclosure matters and 4,501 Fannie Mae foreclosure matters, the firm would
      fall within Tier II, and the required coverage would be not less than $5 million
      per occurrence with an aggregate of not less than $5 million. Beginning in 2014,
      Servicers must conduct an updated coverage analysis annually, with the appropriate
      level of insurance to be determined by the number of matters being handled as
      of June 1 of each year. When an annual review reveals a need to increase a firm’s
      coverage, firms will have until December 31 of each year to obtain any required
      increased coverage. Servicers may grant firms additional time to obtain increased
      coverage, if necessary, to reach the routine renewal date for the firm’s policy
      but may not grant extensions beyond June 1 of the following year. (v) Financial
      resources The Servicer must confirm that the firm has adequate financial resources
      and the financial ability to make required advances in connection with filing
      fees and costs necessary to process default-related and REO-related matters.
      Freddie Mac Single-Family Seller/Servicer Guide Chapter 9501 As of 09/10/25
      Page 9501-7 The Servicer must review the firm’s financial statements and/or
      other firm financial documents in order to confirm that the firm has sufficient
      reserves or credit lines to manage operating expenses. (vi) Business continuity
      The Servicer must confirm that the firm has business continuity and/or disaster
      recovery plans in place to recover critical business functions. The firm must
      have a documented succession/continuity plan in the event of loss of the firm
      owners/partners. (c) Experience and expertise (i) Firm has adequate, relevant
      jurisdiction-specific experience The Servicer must confirm that a law firm has
      at least two full-time attorneys dedicated to default Mortgage practice in each
      jurisdiction in which the law firm has been selected and retained for default-related
      legal services (the “Qualifying Attorneys”), with special rules applicable to
      select jurisdictions. The law firm must have at least two Qualifying Attorneys
      in each jurisdiction in which the law firm has been selected and retained for
      default-related legal services, one with at least eight years and a second with
      at least five years of jurisdiction-specific experience in: ■ Foreclosure (including,
      where applicable, confirmation, redemption and ratification matters) ■ Bankruptcy
      ■ Loss mitigation ■ Eviction ■ REO closing and related litigation (collectively,
      “default Mortgage practice”) Each Qualifying Attorney must be an owner, partner
      or full-time employee of the firm. The law firm can meet the requirement that
      the Qualifying Attorneys are “in each jurisdiction” in one of two ways: ■ If
      the law firm does not have an appropriately staffed and equipped office in the
      jurisdiction, the two Qualifying Attorneys must: ❑ Reside in the relevant jurisdiction
      ❑ Be licensed and in good standing to practice law in the relevant jurisdiction
      Freddie Mac Single-Family Seller/Servicer Guide Chapter 9501 As of 09/10/25
      Page 9501-8 ❑ Practice law on a full-time basis, and ❑ Devote more than fifty
      percent (50%) of their working time to default Mortgage practice in the relevant
      jurisdiction ■ If the law firm has an appropriately staffed and equipped office
      in the jurisdiction, one or both of the two Qualifying Attorneys may reside
      outside of the jurisdiction, provided the Qualifying Attorneys not residing
      in the relevant jurisdiction ordinarily work out of the firm’s office(s) in
      the relevant jurisdiction (except during situations involving national or regional
      emergencies such as natural disasters, health-related pandemics or epidemics
      and other situations making it appropriate and reasonable for the firm to not
      require employees to report for work at the firm’s office(s)) The Servicer must
      obtain a list of the names of the firm’s managing attorneys, partners and associates
      with the years of experience in each area (foreclosure, bankruptcy, eviction,
      REO closing and related litigation). Special rules apply to the following jurisdictions:
      ■ The States of Alaska, Idaho, Montana, New Hampshire, North Dakota, Rhode Island,
      South Dakota, West Virginia and Wyoming ■ The U.S. territories of Guam, Puerto
      Rico, Samoa and the U.S. Virgin Islands ■ The District of Columbia In these
      jurisdictions, the two Qualifying Attorneys must: ■ Be licensed and in good
      standing to practice law in the relevant jurisdiction, and ■ Practice law on
      a full-time basis While Freddie Mac expects that Servicers will give preference
      to firms that employ at least two attorneys who reside in the relevant jurisdiction
      and devote more than fifty percent (50%) of their working time to default Mortgage
      practice in the relevant jurisdiction, Servicers may use a firm that does not
      meet these two standards if the firm otherwise meets the Firm Minimum Requirements.
      When submitting the Servicer Selection Form pursuant to Section 9501.3(a)(i),
      the Servicer must identify the Qualifying Attorneys for each relevant jurisdiction.
      At a minimum, the Servicer must: ■ Identify where the attorneys reside by city
      or county Freddie Mac Single-Family Seller/Servicer Guide Chapter 9501 As of
      09/10/25 Page 9501-9 ■ Identify the jurisdictions in which the attorneys are
      licensed and are in good standing to practice law ■ State whether the attorneys
      practice law on a full-time basis ■ Describe the employment relationship between
      the firm and the attorneys, such as whether the attorneys are owners, principals,
      members, shareholders, partners, associates or other employees (ii) Prior volume
      experience Servicers must confirm the firm and/or managing attorney(s) has completed
      a sufficient number of foreclosure, bankruptcy, loss mitigation, eviction and
      REO matters within the past 24 months to demonstrate that the firm has experience
      in representing creditors in default-related matters. For the 24-month period,
      the Servicer must review the total number of matters referred, the total number
      of matters completed and the number of matters currently pending for each of
      the following areas: foreclosure, bankruptcy, loss mitigation, eviction and
      REO closing. What constitutes a sufficient number of completed default-related
      and REO-related legal services will vary depending upon the jurisdiction at
      issue, the volume the Servicer expects to refer to the firm and the relative
      size of the firm. Servicers must consider these factors when making this determination.
      (iii) Jurisdiction-specific industry references The Servicer must obtain from
      the firm at least two jurisdiction-specific Mortgage Servicers or default-related
      references, or, if the firm has been in existence less than one year, the partners
      or shareholders of the firm must provide at least two Servicer or default-related
      references in connection with work performed in the particular jurisdiction.
      (iv) Staff experience The Servicer must determine whether the firm’s non-attorney
      staff has reasonable experience. In determining what constitutes reasonable
      experience, the Servicer must consider the average years of experience, education,
      qualifications and demonstrated ability of the non-attorney staff in relation
      to their respective levels of responsibility. (d) Compliance and ethics (i)
      Attorney licensing The Servicer must confirm that the firm’s attorneys who will
      handle Freddie Mac Default Legal Matters are licensed to practice and in good
      standing in the jurisdiction in which Freddie Mac Single-Family Seller/Servicer
      Guide Chapter 9501 As of 09/10/25 Page 9501-10 the firm is being retained. Legal
      work must be performed by attorneys licensed in the jurisdiction. (ii) Ethics
      and professional standards The firm must demonstrate a history of legal practice
      that comports with applicable legal and ethical standards and reflects high
      professional standards. The Servicer must conclude that the firm does not, in
      the totality of the circumstances, pose a legal and/or reputational risk or
      exhibit systematic issues that may lead to reputational and/or legal risk to
      Freddie Mac. The Servicer must obtain the following information from the firm
      in order to evaluate the sufficiency of the firm’s professional standards: ■
      Any sanctions against the firm or any of its present or former attorneys in
      the past five years, including the nature of the sanctions and if they relate
      to a loan-level matter or systemic firm practice, and, if related to firm practice,
      any corrective actions taken by the firm ■ Any bar complaints/reprimands against
      present and former firm attorneys in the past 10 years and whether the complaints
      were closed, are pending or resulted in some form of adverse action ■ Any government
      investigations involving firm practices in the past 10 years and whether the
      investigations involved firm practices or are related to client investigations
      ■ Any damages or settlement of claims as a result of an allegation of professional
      negligence against the firm or its attorneys in the past five years (i) in excess
      of $20,000 in any single occurrence and $50,000 in the aggregate, or (ii) reflect
      a possible pattern of professional negligence, regardless of amount; and ■ Any
      significant litigation asserting systemic issues with firm processes or legal
      work, such as any class-action lawsuit against the firm If the Servicer is aware
      of any of the above items that involve the firm’s professional standards but
      which were not disclosed by the firm, the Servicer must disclose them to Freddie
      Mac in the Servicer Selection Form. The Servicer must obtain a disclosure from
      the firm regarding whether the firm (or any of its partners, shareholders or
      employees while acting as a partner, shareholder or principal at another firm)
      has been previously terminated by Freddie Mac or Fannie Mae or had referrals
      suspended by Freddie Mac or Fannie Mae. Freddie Mac Single-Family Seller/Servicer
      Guide Chapter 9501 As of 09/10/25 Page 9501-11 The Servicer must obtain a certification
      from the firm that, to the best of the firm’s knowledge, the firm’s documents
      have been and continue to be prepared, executed and/or notarized in compliance
      with applicable law. If the firm reports that the firm, its attorneys, notaries
      or third parties that the firm relies on to perform any aspect of default-related
      or REO-related services have previously prepared, executed or notarized documents
      that have not been in compliance with applicable law, the Servicer must conclude
      that the firm has instituted controls, procedures and processes to address the
      contributing cause(s) of the firm’s failure to comply with applicable law in
      order to execute the Servicer Selection Form. Freddie Mac expects Servicers
      to exercise sound judgment and consider the totality of the circumstances in
      evaluating the potential legal and reputational risks posed by a firm to Freddie
      Mac. The items for consideration outlined above are not intended to be exhaustive
      or to disqualify a firm from retention if the Servicer concludes that the firm
      is acceptable considering the totality of the circumstances. (iii) Conflicts
      of interest Attorneys must not be affected by a conflict of interest or a potential
      conflict of interest when handling Freddie Mac Default Legal Matters. The Servicer
      must retain the most qualified attorneys in compliance with Freddie Mac requirements
      to assist with processing Freddie Mac Default Legal Matters without regard to
      arrangements that could provide a financial or personal benefit directly or
      indirectly to the Servicer, its employees, outsource companies or third-party
      vendors used by the Servicer to assist in Servicing defaulted Mortgages. On
      the Servicer Selection Form, the Servicer must disclose to Freddie Mac any current,
      past (within the last five years) or pending personal and/or financial relationships
      between: ■ The Servicer and the firm, including its partners and shareholders
      (as applicable) and ■ The firm, including its partners and shareholders (as
      applicable), and any outsourcing company or other third-party vendor used by
      the Servicer to assist in Servicing defaulted Mortgages (iv) Adverse matters
      No substantial part of the firm’s practice can include matters that are adverse
      to financial institutions, including Freddie Mac or Fannie Mae. Adverse matters
      to financial institutions include: ■ Condominium association, HOA or Cooperative
      Corporation foreclosures ■ Consumer debtor or mortgagor representation Freddie
      Mac Single-Family Seller/Servicer Guide Chapter 9501 As of 09/10/25 Page 9501-12
      ■ Bankruptcy trustee representation; or ■ Any other client(s) that may create
      a potential conflict of interest (v) Disclosure of third-party service providers
      The Servicer must require the firm to disclose the identity of and relationship
      with any entities the firm relies upon to provide third-party support functions
      performed on the Servicer’s behalf, including, but not limited to, title searches,
      title insurance, posting, publication and process services. The Servicer must
      also require the firm to disclose whether the firm has a process to select and
      regularly review costs and performance of vendors of related sources to ensure
      competitive pricing and high quality. (e) Management and oversight (i) Staff
      oversight The Servicer must confirm that the firm has appropriate attorney-to-staff
      ratios to ensure appropriate staff oversight given the size of the firm and
      the firm’s operational structure. The Servicer must consider whether the firm
      practices in a judicial or a non-judicial jurisdiction, the firm’s case management
      practices, the jurisdiction-specific process, attorney and staff experience,
      firm technology and firm infrastructure. (ii) File oversight The Servicer must
      confirm that the firm has appropriate (i) attorney-to-file and (ii) staff- to-file
      ratios, given the size of the firm and the firm’s operational structure. The
      Servicer must take into consideration whether the firm practices in a judicial
      or a non-judicial foreclosure jurisdiction, the firm’s case management practices,
      the jurisdiction-specific processes, attorney and staff experience, firm technology
      and firm infrastructure. (iii)Employee training The Servicer must confirm that
      the firm has written policies for employee training, including privacy training.
      When determining whether a firm’s employee training is adequate, the Servicer
      must review the frequency of training, the presence of policies and procedures
      and firm handbooks, manuals and job aids. (iv) Quality control The Servicer
      must confirm that the firm has written policies, procedures and/or processes
      in place by the date of the submission of the Servicer Selection Form, to ensure
      the proper management and supervision of staff and the proper preparation, review,
      execution and notarization of default-related documents and REO-related documents.
      The Freddie Mac Single-Family Seller/Servicer Guide Chapter 9501 As of 09/10/25
      Page 9501-13 Servicer must also confirm the firm has an escalation process for
      employees to raise document execution and other quality control issues to firm
      management. The Servicer must obtain documentation and information related to
      the firm’s process for ensuring compliance with its policies, procedures, processes
      and training, such as an internal compliance program and/or quality control
      reviews. (f) Technology and reporting (i) Technology The Servicer must confirm
      that the firm has adequate technology in place or technological capabilities
      to provide reporting, communication and tracking of key events and milestones,
      including access to PACER/ECF or other similar systems to obtain case and docket
      information from federal appellate, district and bankruptcy court records. Additionally,
      the Servicer must confirm that the firm is able to provide status reports and
      track significant dates and events for foreclosure, bankruptcy, evictions and
      REO closings and has the capability to measure the duration between various
      process stages, to identify process impediments (e.g., holds) and to parse holds
      into different categories. If a firm is multi-jurisdictional or has partnerships
      or relationships with third parties (e.g., local counsel, trustee companies
      or title companies) that will perform or complete some aspect of the default-related
      or REO-related work or if the firm relies on other offices to perform some aspect
      of the work or provide operational support, the Servicer must confirm that the
      firm maintains a reliable and secure means of exchanging matter information
      between each office and any third party the firm relies upon. The Servicer must
      require the firm to describe whether the firm currently uses a universal translation
      technology to communicate information between their technological system and
      the various Servicers’ systems, or the firm must explain its method for transmitting
      information efficiently, accurately and securely to Servicers. (ii) Technology
      staffing The Servicer must confirm that the firm has adequate in-house technical
      expertise or readily available vendor support to ensure compliance with Freddie
      Mac’s automated reporting requirements. (iii)Capability to report via the Attorney
      Data Reporting (ADR) System The Servicer must confirm that the firm has the
      capability to provide daily reporting to Freddie Mac of key metrics (i.e., volume,
      milestones, delays, loss mitigation successes, litigation detail, etc.) via
      the ADR System (see Exhibit 88, Servicing Tools), pursuant to Section 9501.5(b).
      The Servicer must also ensure that the firm has staff responsible for reporting
      data directly to Freddie Mac using the ADR System. Freddie Mac Single-Family
      Seller/Servicer Guide Chapter 9501 As of 09/10/25 Page 9501-14 (g) Diversity
      and communication (i) Diversity data The Servicer must confirm that the firm
      has the capability to report diversity data to the Servicer and Freddie Mac,
      if necessary. (ii) Referrals The Servicer is responsible for ensuring that the
      firm complies with Freddie Mac requirements and applicable laws regarding referrals
      and payment of related fees and benefits, as further described in Sections 9501.4(b)
      and 9501.4(c). The Servicer must not require the firm to use vendors, outsource
      companies or other third-parties specified by the Servicer as a condition of
      receiving a referral of a Freddie Mac Default Legal Matter.'
  judgment: false
