source:
  type: regulation
  id: fhlmc-9402.1
  authority: Freddie Mac Single-Family Seller/Servicer Guide §9402.1 — Freddie Mac rights and litigation types (12/17/25)
  description: "Freddie Mac Guide §9402.1 (Freddie Mac rights and litigation types). Gap-fill (verbatim, ID-diff).\
    \ \n"
obligations:
- id: fhlmc-9402.1-0
  canonical_id: fhlmc-9402.1-0
  section: Freddie Mac Guide 9402.1
  description: '9402.1 Freddie Mac rights and litigation types: (12/17/25) This section contains requirements related
    to: ■ Freddie Mac rights ■ Routine and non-routine litigation (a) Freddie Mac rights Freddie Mac reserves the
    right to direct and control all litigation involving a Freddie Mac- owned or guaranteed Mortgage, regardless
    of whet…'
  type: do
  tags:
  - regulator-direct
  - gap-fill
  - fhlmc-guide
  - section-complete
  primary_source:
    tier: 1
    authority: Freddie Mac Single-Family Seller/Servicer Guide §9402.1 — Freddie Mac rights and litigation types
      (12/17/25)
    source_class: gse-guide
    source_url: https://guide.freddiemac.com/
    snapshot_id: 5869ee9e606cd4ae
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:9a1b23e5024bb369e7a59d36b3702383c11ace68b5d209fdef791bc8f955c637
    paragraph_quote: '(12/17/25) This section contains requirements related to: ■ Freddie Mac rights ■ Routine and
      non-routine litigation (a) Freddie Mac rights Freddie Mac reserves the right to direct and control all litigation
      involving a Freddie Mac- owned or guaranteed Mortgage, regardless of whether Freddie Mac is a named party.
      The Servicer and all law firms handling the litigation, whether selected and engaged pursuant to Chapter 9501
      or Section 8601.5(g) or 9402.2(b), must cooperate fully with Freddie Mac in the prosecution, defense and handling
      of the matter. Note: Refer to Section 9401.1(b) for Freddie Mac rights when the requirements of this section
      regarding Servicer and law firm cooperation with Freddie Mac in the prosecution, defense and handling of litigation
      involving Freddie Mac-owned or guaranteed Mortgages are not met. (b) Routine and non-routine litigation (i)
      Definition of routine and non-routine litigation The Servicer should be familiar with the following definitions:
      Definitions of routine and non-routine litigation N Non-routine litigation A contested action in which the
      Borrower alleges case-specific defenses or issues that, if successful, would create negative legal precedent
      beyond the immediate case'
    drafter_attestation: Verbatim from Freddie Guide §9402.1 body (max-gap occurrence), snapshot 5869ee9e606cd4ae;
      substring-verified.
  judgment: false
- id: fhlmc-9402.1-1
  canonical_id: fhlmc-9402.1-1
  section: Freddie Mac Guide 9402.1
  description: '9402.1 Freddie Mac rights and litigation types: 402-2 Definitions of routine and non-routine litigation
    R Routine litigation A contested action in which the Borrower alleges case-specific defenses or issues that,
    if successful, would not create negative legal precedent beyond the immediate case Examples of non-routine litigati…'
  type: do
  tags:
  - regulator-direct
  - gap-fill
  - fhlmc-guide
  - section-complete
  primary_source:
    tier: 1
    authority: Freddie Mac Single-Family Seller/Servicer Guide §9402.1 — Freddie Mac rights and litigation types
      (12/17/25)
    source_class: gse-guide
    source_url: https://guide.freddiemac.com/
    snapshot_id: 5869ee9e606cd4ae
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:9a1b23e5024bb369e7a59d36b3702383c11ace68b5d209fdef791bc8f955c637
    paragraph_quote: '402-2 Definitions of routine and non-routine litigation R Routine litigation A contested action
      in which the Borrower alleges case-specific defenses or issues that, if successful, would not create negative
      legal precedent beyond the immediate case Examples of non-routine litigation that must be reported to Freddie
      Mac as non-routine litigation include, but are not limited to, the following: ■ Actions that name Freddie
      Mac as a party ■ Actions that seek monetary relief against Freddie Mac, including any claim (including counterclaims,
      cross-claims or third-party claims in foreclosure or bankruptcy actions) for damages against Freddie Mac or
      its officers, directors or employees ■ Actions that challenge the validity, priority or enforceability of
      a Freddie Mac-owned or guaranteed Mortgage or seek to impair Freddie Mac’s interest in an REO, including,
      by way of example: ❑ An action seeking to demolish a structure on the property or the property as a result
      of a code violation ❑ An action seeking to avoid a lien based on a failure to comply with a law or regulation
      ❑ An attempt by a junior lienholder to assert priority over a Freddie Mac-owned or guaranteed Mortgage or
      extinguish Freddie Mac’s interests ❑ A quiet title action seeking to declare Freddie Mac’s lien void; and
      ❑ An attempt by a Borrower to effect a cramdown of a Mortgage in bankruptcy as to which Freddie Mac has not
      delegated authority to the Servicer or law firm to address ■ Actions that present an issue that may pose significant
      legal or reputational risk to Freddie Mac include, by way of example: ❑ Any issue involving Freddie Mac’s
      conservatorship; its conservator, FHFA; Freddie Mac’s status as a federal instrumentality; or an interpretation
      of Freddie Mac’s charter ❑ Any assertion that Freddie Mac is a federal agency or otherwise part of the U.S.
      government'
    drafter_attestation: Verbatim from Freddie Guide §9402.1 body (max-gap occurrence), snapshot 5869ee9e606cd4ae;
      substring-verified.
  judgment: false
- id: fhlmc-9402.1-2
  canonical_id: fhlmc-9402.1-2
  section: Freddie Mac Guide 9402.1
  description: '9402.1 Freddie Mac rights and litigation types: 402-3 ❑ Any “due process” or other constitutional
    challenge ❑ Any challenge to the methods by which Freddie Mac does business ❑ Any putative class actions involving
    a Freddie Mac-owned or guaranteed Mortgage ❑ Challenges to the standing of the Servicer to conduct foreclosures
    or …'
  type: do
  tags:
  - regulator-direct
  - gap-fill
  - fhlmc-guide
  - section-complete
  primary_source:
    tier: 1
    authority: Freddie Mac Single-Family Seller/Servicer Guide §9402.1 — Freddie Mac rights and litigation types
      (12/17/25)
    source_class: gse-guide
    source_url: https://guide.freddiemac.com/
    snapshot_id: 5869ee9e606cd4ae
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:9a1b23e5024bb369e7a59d36b3702383c11ace68b5d209fdef791bc8f955c637
    paragraph_quote: 402-3 ❑ Any “due process” or other constitutional challenge ❑ Any challenge to the methods
      by which Freddie Mac does business ❑ Any putative class actions involving a Freddie Mac-owned or guaranteed
      Mortgage ❑ Challenges to the standing of the Servicer to conduct foreclosures or bankruptcies that, if successful,
      could create negative legal precedent with an impact beyond the immediate case ❑ Challenges to the methods
      by which MERS® does business or its ability to act as nominee under a Mortgage ❑ Any “show cause orders” or
      motions for sanctions relating to a Freddie Mac- owned or guaranteed Mortgage, whether against Freddie Mac,
      the Servicer, a law firm or a vendor of the Servicer or law firm ❑ Any appellate or other action for post-judgment
      relief in any foreclosure, bankruptcy or legal action in which Freddie Mac is a named party ❑ Foreclosures
      on HUD-Guaranteed Section 184 Native American Mortgages ❑ Any environmental litigation relating to a Freddie
      Mac-owned or guaranteed Mortgage ❑ A need to foreclose judicially in a State where non-judicial foreclosures
      predominate ❑ Any claim brought by a governmental body ❑ Cross-border insolvency proceedings under Chapter
      15 of the Bankruptcy Code ❑ Any claim of predatory lending or discrimination in Mortgage origination or Servicing;
      and ❑ Any claim implicating the interpretation of the terms of the Fannie Mae/Freddie Mac Uniform Instruments
      ■ Actions involving an eNote or eMortgage (as those terms are defined in Section 1402.1(b)) Given the evolving
      nature of default-related litigation, it is not possible to provide an exhaustive list of non-routine litigation.
      Each contested action presents unique circumstances, and the Servicer should evaluate each action on a case-by-case
      basis to determine whether a contested action is routine or non-routine.
    drafter_attestation: Verbatim from Freddie Guide §9402.1 body (max-gap occurrence), snapshot 5869ee9e606cd4ae;
      substring-verified.
  judgment: false
- id: fhlmc-9402.1-3
  canonical_id: fhlmc-9402.1-3
  section: Freddie Mac Guide 9402.1
  description: '9402.1 Freddie Mac rights and litigation types: 402-4 (ii) Legal actions and strategies initiated
    by the Servicer A Servicer must obtain written approval (see Directory 5) from the Freddie Mac Legal Division
    prior to initiating the following legal actions and strategies: ■ Filing a new legal action, other than a Freddie
    Mac De…'
  type: do
  tags:
  - regulator-direct
  - gap-fill
  - fhlmc-guide
  - section-complete
  primary_source:
    tier: 1
    authority: Freddie Mac Single-Family Seller/Servicer Guide §9402.1 — Freddie Mac rights and litigation types
      (12/17/25)
    source_class: gse-guide
    source_url: https://guide.freddiemac.com/
    snapshot_id: 5869ee9e606cd4ae
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:9a1b23e5024bb369e7a59d36b3702383c11ace68b5d209fdef791bc8f955c637
    paragraph_quote: '402-4 (ii) Legal actions and strategies initiated by the Servicer A Servicer must obtain written
      approval (see Directory 5) from the Freddie Mac Legal Division prior to initiating the following legal actions
      and strategies: ■ Filing a new legal action, other than a Freddie Mac Default Legal Matter, on behalf of Freddie
      Mac ■ Filing a motion to intervene in a pending legal action on behalf of Freddie Mac ■ Appealing or otherwise
      challenging a judgment in any foreclosure or bankruptcy proceeding or any legal action in which Freddie Mac
      is a named party ■ Filing a notice of removal to federal district court for any legal action in which Freddie
      Mac is a named party ■ Asserting any position in a legal action that relates to Freddie Mac’s status as a
      government-sponsored enterprise, its conservatorship, or its conservator, FHFA ■ Propounding discovery requests
      or otherwise serving or providing any discovery responses on behalf of Freddie Mac (iii)Referring to Freddie
      Mac in litigation Freddie Mac must be described in legal proceedings as “Federal Home Loan Mortgage Corporation
      (“Freddie Mac”), a corporation organized and existing under the laws of the United States of America.” Freddie
      Mac may not be referred to as a “government agency.” (iv) MERS-registered Mortgages See Section 8101.5(b)
      for additional requirements relating to notices from MERS and MERS-registered Mortgages.'
    drafter_attestation: Verbatim from Freddie Guide §9402.1 body (max-gap occurrence), snapshot 5869ee9e606cd4ae;
      substring-verified.
  judgment: false
- id: fhlmc-9402.1-4
  canonical_id: fhlmc-9402.1-4
  section: Freddie Mac Guide 9402.1
  description: '9402.1 Freddie Mac rights and litigation types: Litigation reporting, notification and legal representation
    (09/10/25) This section contains information related to: ■ Reporting and notification requirements for litigation
    ■ Counsel retained by Servicers pursuant to Servicer’s duty to indemnify Freddie Mac'
  type: do
  tags:
  - regulator-direct
  - gap-fill
  - fhlmc-guide
  - section-complete
  primary_source:
    tier: 1
    authority: Freddie Mac Single-Family Seller/Servicer Guide §9402.1 — Freddie Mac rights and litigation types
      (12/17/25)
    source_class: gse-guide
    source_url: https://guide.freddiemac.com/
    snapshot_id: 5869ee9e606cd4ae
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:9a1b23e5024bb369e7a59d36b3702383c11ace68b5d209fdef791bc8f955c637
    paragraph_quote: 'Litigation reporting, notification and legal representation (09/10/25) This section contains
      information related to: ■ Reporting and notification requirements for litigation ■ Counsel retained by Servicers
      pursuant to Servicer’s duty to indemnify Freddie Mac'
    drafter_attestation: Verbatim from Freddie Guide §9402.1 body (max-gap occurrence), snapshot 5869ee9e606cd4ae;
      substring-verified.
  judgment: false
- id: fhlmc-9402.1-5
  canonical_id: fhlmc-9402.1-5
  section: Freddie Mac Guide 9402.1
  description: '9402.1 Freddie Mac rights and litigation types: 402-5 (a) Reporting and notification requirements
    for litigation (i) EDR requirements The Servicer must monitor all Freddie Mac Default Legal Matters and act
    without delay and in accordance with applicable law when responding to any litigation matter. If litigation
    involves a Mor…'
  type: do
  tags:
  - regulator-direct
  - gap-fill
  - fhlmc-guide
  - section-complete
  primary_source:
    tier: 1
    authority: Freddie Mac Single-Family Seller/Servicer Guide §9402.1 — Freddie Mac rights and litigation types
      (12/17/25)
    source_class: gse-guide
    source_url: https://guide.freddiemac.com/
    snapshot_id: 5869ee9e606cd4ae
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:9a1b23e5024bb369e7a59d36b3702383c11ace68b5d209fdef791bc8f955c637
    paragraph_quote: '402-5 (a) Reporting and notification requirements for litigation (i) EDR requirements The
      Servicer must monitor all Freddie Mac Default Legal Matters and act without delay and in accordance with applicable
      law when responding to any litigation matter. If litigation involves a Mortgage that is 30 or more days delinquent,
      the Servicer must report the litigation matter to Freddie Mac via EDR within the first three Business Days
      of the month following the month in which the Servicer became aware of the litigation using default action
      code 33 (Contested Foreclosure and Litigation). (ii) Legal reporting requirements for non-routine litigation
      (A) Notifying Freddie Mac of non-routine litigation The Servicer must act without delay and notify Freddie
      Mac within two Business Days of determining that the Freddie Mac Default Legal Matter involves or evolves
      into non-routine litigation. All notifications must be sent via e-mail (see Directory 5). If the Servicer
      retains counsel not selected and engaged pursuant to Chapter 9501 to handle the non-routine litigation matter
      (see Sections 8601.5(g) and 9402.2(b)), the notification to Freddie Mac must include the name, address, phone
      number and e- mail address of the Servicer’s counsel and a brief summary, including but not limited to: ■
      The issues presented, ■ The Freddie Mac loan number, ■ The docket number, ■ The case caption and court, and
      ■ Any relevant pleadings Once Freddie Mac has been notified accordingly, the Servicer and the law firm(s)
      handling the non-routine litigation matter must periodically update Freddie Mac on the progress of the litigation.
      Freddie Mac must be provided sufficient opportunity, but no less than five Business Days before the filing
      deadline, to review and comment upon any substantive pleadings, including, but not limited to: ■ Motions,
      ■ Replies, ■ Briefs, and'
    drafter_attestation: Verbatim from Freddie Guide §9402.1 body (max-gap occurrence), snapshot 5869ee9e606cd4ae;
      substring-verified.
  judgment: false
- id: fhlmc-9402.1-6
  canonical_id: fhlmc-9402.1-6
  section: Freddie Mac Guide 9402.1
  description: '9402.1 Freddie Mac rights and litigation types: 402-6 ■ ■ Proposed orders (B) Notification of a
    modification of a Mortgage subject to active non-routine litigation If the Mortgage is subject to active non-routine
    litigation, and the Servicer determines the Borrower is eligible for a Freddie Mac Flex Modification®, the Servicer…'
  type: do
  tags:
  - regulator-direct
  - gap-fill
  - fhlmc-guide
  - section-complete
  primary_source:
    tier: 1
    authority: Freddie Mac Single-Family Seller/Servicer Guide §9402.1 — Freddie Mac rights and litigation types
      (12/17/25)
    source_class: gse-guide
    source_url: https://guide.freddiemac.com/
    snapshot_id: 5869ee9e606cd4ae
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:9a1b23e5024bb369e7a59d36b3702383c11ace68b5d209fdef791bc8f955c637
    paragraph_quote: '402-6 ■ ■ Proposed orders (B) Notification of a modification of a Mortgage subject to active
      non-routine litigation If the Mortgage is subject to active non-routine litigation, and the Servicer determines
      the Borrower is eligible for a Freddie Mac Flex Modification®, the Servicer must: ■ Conduct a review through
      its in-house or outside counsel to determine that it is appropriate to send the Trial Period Plan offer per
      applicable laws ■ Ensure that any active litigation and settlement negotiations by Servicer’s counsel are
      not undermined and that Freddie Mac’s interests are not adversely impacted If it is deemed appropriate to
      send based upon the aforementioned review, the Servicer or the Servicer’s counsel must send the Trial Period
      Plan offer to an eligible Borrower’s counsel or, if not represented, to the Borrower directly when that Borrower’s
      Mortgage is subject to active non-routine litigation. (iii)Legal expenses for non-routine litigation The Servicer
      must obtain Freddie Mac’s prior written approval before incurring any expenses in the Servicing of a non-routine
      litigation matter. To obtain Freddie Mac’s approval, the Servicer must: ■ Contact Freddie Mac with details
      of the non-routine litigation matter (see Directory 5) according to the reporting requirements in Section
      9402.2(a)(ii) ■ Submit a request for pre-approval (RPA) in PAID (Payments Automated Intelligent and Dynamic)
      (see Exhibit 88, Servicing Tools) for all non-routine litigation legal expenses that are reimbursable to the
      Servicer. The RPA submission must include an estimate of the attorney’s fees and litigation costs and the
      attorney’s hourly rate. When a delay in taking protective action might result in the impairment of the property
      or jeopardize Freddie Mac’s lien position, the Servicer must immediately submit an RPA. If unusual or emergency
      circumstances do not allow the Servicer to request Freddie Mac’s prior written approval, then the Servicer
      must notify Freddie Mac via PAID by the next Business Day after the Servicer incurred the expense. If the
      Servicer’s determination to incur the expense was reasonable, as determined in Freddie Mac’s sole discretion,
      Freddie Mac will reimburse the Servicer. (b) Counsel retained by Servicers pursuant to Servicer’s duty to
      indemnify Freddie Mac (i) Servicer responsibilities for retaining counsel in litigation'
    drafter_attestation: Verbatim from Freddie Guide §9402.1 body (max-gap occurrence), snapshot 5869ee9e606cd4ae;
      substring-verified.
  judgment: false
- id: fhlmc-9402.1-7
  canonical_id: fhlmc-9402.1-7
  section: Freddie Mac Guide 9402.1
  description: '9402.1 Freddie Mac rights and litigation types: 402-7 From time to time, the Servicer may retain
    counsel to represent Freddie Mac and/or the Servicer in litigation involving allegations that, if true, could
    subject the Servicer to liability to Freddie Mac for a failure to comply with any selling or Servicing representation
    or …'
  type: do
  tags:
  - regulator-direct
  - gap-fill
  - fhlmc-guide
  - section-complete
  primary_source:
    tier: 1
    authority: Freddie Mac Single-Family Seller/Servicer Guide §9402.1 — Freddie Mac rights and litigation types
      (12/17/25)
    source_class: gse-guide
    source_url: https://guide.freddiemac.com/
    snapshot_id: 5869ee9e606cd4ae
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:9a1b23e5024bb369e7a59d36b3702383c11ace68b5d209fdef791bc8f955c637
    paragraph_quote: '402-7 From time to time, the Servicer may retain counsel to represent Freddie Mac and/or the
      Servicer in litigation involving allegations that, if true, could subject the Servicer to liability to Freddie
      Mac for a failure to comply with any selling or Servicing representation or warranty or requirement of the
      Guide or other Purchase Documents. In these cases: ■ When the Servicer retains counsel for this purpose, the
      Servicer remains liable for legal fees and costs incurred in the defense of any litigation, as well as any
      and all losses, judgments, damages and expenses, including fees and costs entered against and incurred on
      behalf of Freddie Mac ■ Freddie Mac will reimburse the Servicer for Freddie Mac’s proportionate share of expenses
      for responding to Borrower defenses (ii) Counsel selection and notification requirements Counsel retained
      and paid by Servicers pursuant to Section 9402.1(b) and this section do not need to be selected and engaged
      pursuant to Chapter 9501. For all other Freddie Mac Default Legal Matters, the Servicer must use counsel selected
      and engaged pursuant to Chapter 9501. Servicers must notify Freddie Mac (see Directory 5) of its retention
      of counsel not selected and engaged pursuant to Chapter 9501 and are required to comply with the reporting
      requirements in Section 9402.2(a)(ii). (iii)Litigation management and transitioning legal matters The Servicer
      must ensure that the law firm to which the Freddie Mac Default Legal Matter was originally referred is updated
      on the current status of the litigation either by the Servicer or its new counsel. Unless the entire legal
      matter or action is resolved, the Servicer is responsible for transitioning the Freddie Mac Default Legal
      Matter back to the law firm for further proceedings. This transition must occur no later than one Business
      Day after the resolution of the litigation matter. (iv) Borrower responsibility for legal fees When the Security
      Instrument provides for the Borrower to reimburse the Servicer for any legal fees and costs incurred, the
      Servicer should: ■ Instruct its counsel to notify the Borrower about his or her responsibility for such expenses
      ■ Ensure its counsel resolve such matters through stipulation or any other expeditious manner that will minimize
      fees and costs to the Borrower'
    drafter_attestation: Verbatim from Freddie Guide §9402.1 body (max-gap occurrence), snapshot 5869ee9e606cd4ae;
      substring-verified.
  judgment: false
- id: fhlmc-9402.1-8
  canonical_id: fhlmc-9402.1-8
  section: Freddie Mac Guide 9402.1
  description: '9402.1 Freddie Mac rights and litigation types: 501-1 Chapter 9501: Selection, Retention and Management
    of Law Firms for Freddie Mac Default Legal Matters'
  type: do
  tags:
  - regulator-direct
  - gap-fill
  - fhlmc-guide
  - section-complete
  primary_source:
    tier: 1
    authority: Freddie Mac Single-Family Seller/Servicer Guide §9402.1 — Freddie Mac rights and litigation types
      (12/17/25)
    source_class: gse-guide
    source_url: https://guide.freddiemac.com/
    snapshot_id: 5869ee9e606cd4ae
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:9a1b23e5024bb369e7a59d36b3702383c11ace68b5d209fdef791bc8f955c637
    paragraph_quote: '501-1 Chapter 9501: Selection, Retention and Management of Law Firms for Freddie Mac Default
      Legal Matters'
    drafter_attestation: Verbatim from Freddie Guide §9402.1 body (max-gap occurrence), snapshot 5869ee9e606cd4ae;
      substring-verified.
  judgment: false
