source:
  type: guide
  id: fhlmc-9501.5
  authority: Freddie Mac Single-Family Seller/Servicer Guide Section 9501.5 — Servicer
    oversight and reporting
  description: Freddie Mac Single-Family Seller/Servicer Guide Section 9501.5 — Servicer
    oversight and reporting.
  coverage_tier: operative
obligations:
- id: fhlmc-9501.5-full
  canonical_id: fhlmc-9501.5-full
  section: Freddie Mac Single-Family Seller/Servicer Guide Section 9501.5 — Servicer
    oversight and reporting
  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 9501.5 — Servicer
      oversight and reporting
    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: '9501.5: Servicer oversight and reporting (09/10/25) This section
      contains requirements related to: ■ Servicer use of connectivity and invoice
      processing system ■ Servicer reporting on Freddie Mac Default Legal Matters
      ■ Servicer monitoring and management of firm ■ Escalation of firm issues to
      Freddie Mac Freddie Mac Single-Family Seller/Servicer Guide Chapter 9501 As
      of 09/10/25 Page 9501-21 (a) Servicer use of connectivity and invoice processing
      system A Servicer, whether acting directly or through any vendor, service provider
      or outsourcing company, may employ electronic monitoring, management, reporting
      or information and document delivery processes technology, referred to in this
      section as a “Connectivity System,” and an invoice processing system as outlined
      below. (i) Connectivity System A Servicer may employ a Connectivity System to
      assist with fulfilling Servicing obligations such as: ■ Packaging and referring
      foreclosure and bankruptcy cases to the firm ■ Communicating information and
      delivering documents between the Servicer and the firm as well as any other
      third parties requiring access to the Connectivity System; and ■ Managing and
      monitoring foreclosure and bankruptcy cases If a Servicer uses a Connectivity
      System: ■ Freddie Mac will reimburse the Servicer for the actual cost of the
      connectivity fee up to the maximum expense limit specified in Section 9701.3(a)
      ■ The Servicer must provide the firm with use of and access to the identical
      Connectivity System ■ The Servicer must permit or continue to permit the firm
      to integrate its own technology systems with the Connectivity System at no cost
      to the firm; and ■ The Servicer must not pass on any Connectivity System related
      charges to the Borrower or the firm (ii) Invoice processing system A Servicer
      may employ an invoice processing system for managing the submission and payment
      of invoices. If a Servicer, whether acting directly or through a vendor or outsourcing
      company, processes firm invoices electronically: ■ Freddie Mac will reimburse
      the Servicer for the actual cost of the invoicing fee up to the maximum expense
      limits specified in Section 9701.3(a); and Freddie Mac Single-Family Seller/Servicer
      Guide Chapter 9501 As of 09/10/25 Page 9501-22 ■ The Servicer must not pass
      on any invoice processing related charges to the Borrower or the firm The amounts
      specified in Section 9701.3(a) for connectivity and invoice processing systems
      are the maximum amounts for which a Servicer may seek reimbursement for the
      life of the default (i.e., the duration of the foreclosure, including any Freddie
      Mac Default Legal Matter such as bankruptcy). Example: If a Servicer has already
      referred a Mortgage to foreclosure and it then becomes necessary to take action
      with respect to a bankruptcy related to such Mortgage, or if a Servicer has
      already referred a file for bankruptcy and foreclosure has commenced following
      the bankruptcy referral, the Servicer may be reimbursed only for one connectivity
      fee. Likewise in this scenario, if the Servicer is using an invoice processing
      system, then the Servicer may only seek reimbursement for one invoicing fee
      associated with the foreclosure and for one invoicing fee associated with the
      bankruptcy during the life of the default. (b) Servicer reporting on Freddie
      Mac Default Legal Matters The Servicer must provide reports related to firm
      performance, management of foreclosure and bankruptcy processes, oversight of
      firm compliance and performance and other related matters as required by Freddie
      Mac. Servicers must ensure that all firms retained for Freddie Mac Default Legal
      Matters report data required by Freddie Mac directly to Freddie Mac accurately
      and in the time frames prescribed. This includes required daily reporting by
      its retained law firms, via the Attorney Data Reporting (ADR) System (see Exhibit
      88, Servicing Tools), of key metrics such as: ■ Milestones during the lifecycle
      of Freddie Mac Default Legal Matters ■ Delays affecting prompt and efficient
      completion of the Freddie Mac Default Legal Matter ■ Successful loss mitigation
      activities ■ Litigation detail during the lifecycle of certain non-routine litigation
      matters ■ Completion of the Freddie Mac Default Legal Matter Key metrics generally
      must be reported to Freddie Mac within 24 hours of occurrence unless otherwise
      prescribed in related training materials for the web-based attorney reporting
      system. Servicers may obtain access to the ADR System and monitor their law
      firms’ reporting progress by completing the ADR Servicer Access Request Form
      available on the Freddie Mac Default-Related Legal Services webpage at https://sf.freddiemac.com/working-with-us/servicing/default-related-legal-services.
      If a Servicer has further questions regarding ADR System access, they may contact
      Freddie Mac at Foreclosures@FreddieMac.com. Freddie Mac Single-Family Seller/Servicer
      Guide Chapter 9501 As of 09/10/25 Page 9501-23 (c) Servicer monitoring and management
      of firm The Servicer is responsible for managing and monitoring all aspects
      of the firm performance, providing necessary assistance to the firm relating
      to Freddie Mac Default Legal Matters and undertaking all activities required
      to protect Freddie Mac’s interest in the Mortgage. The Servicer must also ensure
      that the firm is in compliance with applicable Freddie Mac requirements and
      that the firm receives all training and documentation relating to applicable
      Freddie Mac requirements, either separately or as part of the Servicer’s standard
      training. (i) Compliance processes The Servicer must develop and have in place
      policies and procedures regarding oversight and compliance of firms handling
      Freddie Mac Default Legal Matters. The Servicer must have policies and procedures
      reasonably designed to ensure that firms handling Freddie Mac Default Legal
      Matters are in compliance with the limited retention agreement, the applicable
      provisions of the Guide and applicable law. The Servicer’s ongoing compliance
      monitoring must address the following minimum elements: ■ Ongoing eligibility
      under the Firm Minimum Requirements specified in Section 9501.2 ■ Compliance
      with the limited retention agreement, including the fee and cost guidelines;
      and ■ Firm performance and processes necessary to ensure Servicer’s compliance
      with applicable Guide requirements The Servicer must conduct periodic compliance
      reviews and training as appropriate. In determining the frequency of firm compliance
      reviews, the Servicer must consider the overall risk posed to Freddie Mac by
      the firm (legal, reputational and financial), firm file volume, performance,
      any changes in staffing ratios or levels, any litigation against the firm alleging
      systemic issues, any media coverage regarding the firm and the prior results
      of any firm compliance reviews. (ii) Freddie Mac review of compliance process
      Freddie Mac reserves the right to review the Servicer’s compliance process.
      Freddie Mac may require Servicers to conduct additional compliance activities
      related to firms handling Freddie Mac Default Legal Matters, such as additional
      firm compliance reviews. Freddie Mac Single-Family Seller/Servicer Guide Chapter
      9501 As of 09/10/25 Page 9501-24 The Servicer must make available to Freddie
      Mac upon request the materials relating to its performance and compliance monitoring
      of firms handling Freddie Mac Default Legal Matters, including: ■ Information
      regarding the scope and methodology of the Servicer’s compliance monitoring
      ■ The schedule of firm compliance reviews conducted ■ The identity of any vendors
      used in the firm compliance reviews ■ All documentation from the firm compliance
      reviews; and ■ All findings, reports or remediation plans resulting from the
      firm compliance reviews In addition, Freddie Mac may require a Servicer to change
      the scope of its compliance process used to monitor firms handling Freddie Mac
      Mortgages. (iii)Freddie Mac right to audit firm Freddie Mac also reserves the
      right to directly conduct firm audits and firm on-site visits as Freddie Mac
      deems necessary. Freddie Mac audits and visits may focus on items such as: ■
      Fee and cost compliance ■ Servicer compliance with Freddie Mac requirements,
      and ■ High-risk issues, including: ❑ Compliance with applicable laws ❑ Reputational
      risk ❑ Unsatisfactory results of Servicer firm compliance reviews; and ❑ Conflicts
      of interest involving Freddie Mac-owned or guaranteed Mortgages (d) Escalation
      of firm issues to Freddie Mac (i) Escalation of issues The Servicer must notify
      Freddie Mac via e-mail (see Directory 1) within two Business Days of discovery,
      or sooner if circumstances warrant, if the Servicer becomes aware of any issues
      or concerns relating to a firm (including a specific employee or vendor of a
      firm) or a Freddie Mac Default Legal Matter, including, but not limited to:
      Freddie Mac Single-Family Seller/Servicer Guide Chapter 9501 As of 09/10/25
      Page 9501-25 ■ Any information regarding a firm that may warrant a firm’s suspension,
      termination or Servicer request to transfer Freddie Mac Default Legal Matters
      to another firm ■ Information suggesting legal or reputational risk posed by
      the firm such as bar complaints, sanctions or litigation alleging systemic issues
      with the firm, firm attorney or firm practices ■ Security incidents that compromise
      the security, confidentiality or integrity of “sensitive customer information”
      and that the security incident is related to Freddie Mac-owned or guaranteed
      Mortgages (refer to Section 1301.2(f)) ■ Actual or alleged fraud on the part
      of the firm ■ Federal, State or local governmental inquiries, including congressional
      inquiries, regarding a firm, Freddie Mac-owned or guaranteed Mortgages or Freddie
      Mac or Servicer practices affecting Freddie Mac-owned or guaranteed Mortgages
      ■ Non-routine litigation (as described in Section 9402.1(b)) ■ Media inquiries
      relating to Freddie Mac, a firm or Freddie Mac-owned or guaranteed Mortgages
      ■ Volume or capacity issues with the firm ■ Breach of the limited retention
      agreement between the firm and Freddie Mac or the contract between the firm
      and the Servicer ■ Legal matters such as regulatory updates and specific reporting
      on certain matters (e.g., transfer tax matters) ■ Any systemic issues with the
      firm ■ Systemic Servicer issues related to file suspensions and foreclosure
      holds (e.g., failure to properly implement new statutory changes); and ■ Any
      material changes in the ownership, partnership or organization of the firm after
      executing the limited retention agreement. Such notifications should include
      instances where a named partner leaves the firm or a major practice group separates
      from the firm. (ii) Procedures relating to issues and concerns When a Servicer
      provides Freddie Mac notice of an issue requiring Freddie Mac’s attention, the
      Servicer must designate in its e-mail one or more points of contact. Freddie
      Mac may request that the Servicer obtain additional information from the firm
      regarding Freddie Mac Single-Family Seller/Servicer Guide Chapter 9501 As of
      09/10/25 Page 9501-26 the issue that was escalated to Freddie Mac, and the Servicer
      must promptly provide the requested information to Freddie Mac. (iii)Freddie
      Mac rights Freddie Mac reserves the right to issue direction to Servicers and
      firms regarding escalated issues. Note: Refer to Section 9501.6(c) for more
      information about Freddie Mac’s reservation of rights. (iv) Escalated issue
      – confidential information Any issue that is identified and escalated to or
      by Freddie Mac pursuant to this section (other than non-routine litigation)
      is considered to be “confidential information” as defined in Sections 1201.8
      and 8101.4(d). The Servicer must comply with the requirements of such sections
      with respect to treatment of any escalated issue. 9501.6: File transfers, termination
      and suspension of firms (09/10/25) This section contains requirements related
      to: ■ File transfers, termination and suspension of firms ■ Implementing file
      transfers and/or the termination and suspension of firms ■ Reservation of rights
      and remedies for non-compliance concerning litigation (a) File transfers, termination
      and suspension of firms (i) Servicer-directed suspension of referrals, Freddie
      Mac Default Legal Matter transfers and terminations If a Servicer becomes aware
      of information regarding a firm’s handling of Freddie Mac Default Legal Matters
      that might warrant a suspension of referrals of new Freddie Mac Default Legal
      Matters, the transfer of Freddie Mac Default Legal Matters to another firm and/or
      termination of the firm (such as for legal, reputational or operational risk),
      the Servicer must: ■ Notify Freddie Mac within two Business Days via e-mail
      or sooner if circumstances warrant, as set forth in Section 9501.5(d); and ■
      Conduct due diligence with respect to the issue Freddie Mac Single-Family Seller/Servicer
      Guide Chapter 9501 As of 09/10/25 Page 9501-27 If the Servicer intends to suspend
      referrals of new Freddie Mac Default Legal Matters, transfer Freddie Mac Default
      Legal Matters and/or terminate a firm, the Servicer must provide Freddie Mac
      with at least five Business Days’ notice (see Directory 1) prior to implementing
      the decision. Additionally, the notification must provide Freddie Mac with the
      implementation plan for the course of action chosen by the Servicer, pursuant
      to Section 9501.6(b). For the transfer of Freddie Mac Default Legal Matters,
      once a Servicer has determined the eligible law firm(s) that will receive such
      file transfers, the following must also be included in the notification to Freddie
      Mac: ■ Servicer name and the six-digit Seller/Servicer number ■ The nine-digit
      Freddie Mac loan number ■ Servicer loan number ■ Date of transfer ■ Original
      law firm name ■ New law firm name ■ Freddie Mac Default Legal Matter being transferred
      (e.g., foreclosure, bankruptcy proof of claim (POC) or bankruptcy motion for
      relief (MFR)) to the new law firm ■ The State in which the Mortgaged Premises
      is located In addition, the Servicer must: ■ Upon request, provide Freddie Mac
      with the reason for the decision and the due diligence materials or other information
      supporting the decision ■ Inform the firm of the decision; and ■ Keep Freddie
      Mac periodically updated with respect to the status of implementation of the
      decision Note: Refer to Section 9501.6(b) for additional information relating
      to implementation of terminations, transfer of Freddie Mac Default Legal Matters
      and suspensions. Freddie Mac Single-Family Seller/Servicer Guide Chapter 9501
      As of 09/10/25 Page 9501-28 (ii) Freddie Mac-directed suspension of referrals,
      matter transfers and terminations Freddie Mac may direct the Servicer to initiate
      an investigation of a firm if Freddie Mac becomes aware of information that
      might warrant a suspension of: ■ Referrals of new Freddie Mac Default Legal
      Matters ■ The transfer of Freddie Mac Default Legal Matters, or ■ Termination
      of the firm Freddie Mac also may conduct due diligence and investigations as
      necessary. Freddie Mac may instruct Servicers to suspend some or all referrals
      of new Freddie Mac Default Legal Matters, transfer some or all existing Freddie
      Mac Default Legal Matters or terminate a firm. In the event of a decision by
      Freddie Mac to suspend referrals of new Freddie Mac Default Legal Matters, transfer
      Freddie Mac Default Legal Matters or terminate a firm, Freddie Mac will: ■ Inform
      the Servicer of the decision and provide direction with respect to required
      Servicer actions, including direction with respect to transfers of Freddie Mac
      Default Legal Matters ■ Inform the firm of the decision and provide direction
      to the firm with respect to required firm actions; and ■ Terminate the limited
      retention agreement between Freddie Mac and the firm, as appropriate (iii)Documentation
      of due diligence review The Servicer must maintain documentation of the due
      diligence review, the Servicer’s decision and all other information supporting
      the decision for a period of seven years after such decision. (b) Implementing
      file transfers and/or the termination and suspension of firms (i) Implementation
      plan Prior to implementing any decision to terminate a contract with a firm,
      suspend referrals of new Freddie Mac Default Legal Matters and/or transfer Freddie
      Mac Default Legal Matters from a firm, the Servicer must develop an implementation
      plan which addresses: ■ File transfers Freddie Mac Single-Family Seller/Servicer
      Guide Chapter 9501 As of 09/10/25 Page 9501-29 ■ The capacity of other eligible
      firms in the jurisdiction to handle additional Freddie Mac Default Legal Matters
      and/or transferred Freddie Mac Default Legal Matters ■ Proration of fees and
      costs between the transferor and transferee firms ■ Contract provisions during
      any transition period, including insurance; and ■ Other issues as necessary
      The implementation plan must take into account any legal, operational or reputational
      risks that may arise during the transition period and must address these risks
      in the most cost-efficient and effective manner. Freddie Mac reserves the right
      to require the modification of the implementation plan and provide additional
      Servicer requirements relating to the termination of any firm, the suspension
      of referrals of new Freddie Mac Default Legal Matters and the transfer of Freddie
      Mac Default Legal Matters. (ii) Servicer monitoring of implementation plan The
      Servicer must take all necessary steps to ensure that the implementation plan
      proceeds in an orderly manner and that all Freddie Mac interests are protected
      during the implementation. Such steps include, but are not limited to: ■ Transferring
      files relating to Freddie Mac Default Legal Matters to eligible firms ■ Addressing
      any issues arising from the transfer of files, the suspension of referrals and
      the termination of a firm ■ Reporting periodically to Freddie Mac on the status
      of the plan, including such details as how many files are transferred to each
      new firm, which new firms receive the files and the timing of transfers; and
      ■ Such other details as requested by Freddie Mac Servicers may not charge Freddie
      Mac or Borrowers for any fees or costs associated with transferring Freddie
      Mac Default Legal Matters, and such amounts may not be added to Borrower Mortgage
      balances. (iii)Freddie Mac’s rights to manage termination, suspension and/or
      file transfers Freddie Mac may decide, in its sole discretion, that the legal,
      operational or reputational risks necessitate Freddie Mac’s management of the:
      ■ Termination of any firm with respect to its handling of Freddie Mac Default
      Legal Matters Freddie Mac Single-Family Seller/Servicer Guide Chapter 9501 As
      of 09/10/25 Page 9501-30 ■ Suspension of referrals of Freddie Mac Default Legal
      Matters to a firm; and/or ■ Transfers of files relating to Freddie Mac Default
      Legal Matters In such case, the Servicer must cooperate with Freddie Mac in
      such management and provide all necessary documentation, files and information
      as requested by Freddie Mac. (c) Reservation of rights and remedies for non-compliance
      concerning litigation (i) Reservation of rights Freddie Mac reserves the right
      to direct and control all litigation involving a Freddie Mac loan. The Servicer
      and firm handling the litigation must cooperate fully with Freddie Mac in the
      prosecution, defense or handling of the matter. In addition, Freddie Mac reserves
      the right to: ■ Select the foreclosure counsel for a particular case, whether
      the case is routine or non- routine litigation ■ Direct and manage the actions
      taken by the foreclosure counsel on a case-by-case or individual jurisdiction
      basis ■ Assess additional compensatory fees against the Servicer and/or seek
      repayment of losses, costs or damages from the Servicer sustained due to errors,
      omissions or delays by the Servicer or its agent; and ■ Direct and manage the
      actions taken by Servicers and firms relating to escalated issues specified
      in Section 9501.5(d) (ii) Remedies for non-compliance If a Servicer fails to
      comply with the provisions under Chapter 9501, Freddie Mac, in its sole discretion
      and in addition to any other remedies specified in the Guide or the Servicer’s
      other Purchase Documents, reserves the right to: ■ Refuse to reimburse the Servicer
      for any legal fees and costs ■ Offset the entire legal fee from future foreclosure
      expenses otherwise eligible for reimbursement from Freddie Mac or seek the Servicer’s
      reimbursement of the entire legal fee with interest if Freddie Mac has already
      reimbursed the Servicer for the costs involved in the particular foreclosure
      or bankruptcy ■ Require the Servicer to reimburse the firm or Freddie Mac for
      any prohibited payments or other financial benefits Freddie Mac Single-Family
      Seller/Servicer Guide Chapter 9501 As of 09/10/25 Page 9501-31 ■ Prohibit the
      Servicer from contracting, directly or through any service provider, vendor
      or outsourcing company, with a firm with respect to products or services ancillary
      to a foreclosure or bankruptcy case ■ Prohibit the Servicer from contracting
      with the service provider, vendor or outsourcing company involved in the prohibited
      activities with respect to Freddie Mac-owned or guaranteed Mortgages ■ Seek
      Servicer repayment of losses, costs or damages sustained by Freddie Mac due
      to errors by the Servicer or its agent and/or require repurchase of impacted
      Mortgage Freddie Mac Single-Family Seller/Servicer Guide Chapter 9601 As of
      09/10/25 Page 9601-1 Chapter 9601: Deficiency Recovery 9601.1: Deficiency recovery
      and management (09/10/25) This section contains requirements related to: ■ Working
      with vendors to collect deficiencies ■ Assigning deficiency rights after the
      foreclosure sale ■ Charging off the deficiency (a) Working with vendors to collect
      deficiencies Freddie Mac may use vendors to assist in the collection of deficiencies.
      The Servicer must assist such vendors to obtain any necessary case file documentation
      upon the vendor’s request. This would include data reporting or case file documentation
      that firms, selected and retained by the Servicer to handle Freddie Mac Default
      Legal Matters, may have obtained in the course of handling a particular case.
      At the time the vendor requests documentation for this purpose, as part of the
      request, the vendor will provide a letter of authorization from Freddie Mac
      to obtain such information. The Servicer may only execute deficiency assignment
      documents that transfer deficiency rights from the Servicer to Freddie Mac when
      requested by an MI or third-party vendor. Note: Refer to Section 9601.1(b) for
      requirements on assigning deficiency rights. (b) Assigning deficiency rights
      after the foreclosure sale If the Mortgage has mortgage insurance and is not
      covered by any other credit enhancement, the Servicer must not execute any assignment
      of the right to pursue a deficiency or assignment of a deficiency judgment to
      an MI or a third party. These documents must be sent directly to Freddie Mac
      (see Directory 5). Freddie Mac will coordinate the execution of these assignment
      documents. The Servicer may execute deficiency assignment documents that transfer
      deficiency rights from the Servicer to Freddie Mac when requested by an MI or
      third-party vendor. For all other issues related to assigning deficiency rights
      after foreclosure sale, Servicers should direct their questions to Freddie Mac
      (see Directory 5). (c) Charging off the deficiency Freddie Mac Single-Family
      Seller/Servicer Guide Chapter 9601 As of 09/10/25 Page 9601-2 The amount that
      Freddie Mac has determined to be charged off will be reflected on the Draft
      Report. The Servicer must review the Draft Report and report any discrepancies
      between its records and the amount on the Draft Report to Freddie Mac via the
      Freddie Mac Servicing Data Corrections tool (see Exhibit 88, Servicing Tools)
      within 30 calendar days following Freddie Mac’s posting of the amount to the
      Draft Report. Servicers may access the Draft Report through the Freddie Mac
      Cash Manager tool (see Exhibit 88). When reporting a discrepancy, Servicers
      must input the calculation used to determine the variance and upload any documentation
      to support the request in the Servicing Data Corrections tool. Freddie Mac will
      process, at its discretion, discrepancies that are submitted more than 60 calendar
      days after the initial adjustment is posted to the Draft Report. Such discrepancies
      may be subject to a contract noncompliance and contract change compensatory
      fee (see Section 8303.5(i)). If the postsettlement correction request is denied,
      the Servicer may be liable for any additional losses. Freddie Mac Single-Family
      Seller/Servicer Guide Chapter 9602 As of 09/10/25 Page 9602-1 Chapter 9602:
      Post-Sale Reporting to Other Entities 9602.1: Post-foreclosure reporting and
      compliance (09/10/25) This section contains requirements related to: ■ Servicer
      reporting of foreclosure sales to credit repositories ■ Servicer reporting to
      the Internal Revenue Service (IRS) (a) Servicer reporting of foreclosure sales
      to credit repositories The Servicer must report all foreclosure sales to the
      credit repositories listed in Exhibit 51, Credit Repositories and Information
      to Report, according to the requirements in Section 8106.1(d). (b) Servicer
      reporting to the IRS The Servicer must report the acquisition or abandonment
      of the property to the IRS according to the requirements in Section 8106.2(b)
      on IRS Form 1099-A, Acquisition or Abandonment of Secured Property. In the event
      that deficiency rights were not preserved during the foreclosure process as
      may be allowed under Section 9301.6(a)(ii), the Servicer must also report the
      cancelation of debt to the IRS according to the requirements in Section 8106.2(c)
      on IRS Form 1099-C, Cancellation of Debt. Freddie Mac Single-Family Seller/Servicer
      Guide Chapter 9603 As of 11/19/25 Page 9603-1 Chapter 9603: REO 9603.1: General
      REO Servicing requirements (11/19/25) This section contains information related
      to: ■ General Servicer requirements for REO properties ■ Required REO documentation
      and reporting ■ Notifying the taxing authority/HOA of REO ■ Property insurance
      for REO ■ Canceling utilities for REO (a) General Servicer requirements for
      REO properties Once Freddie Mac has acquired a property in REO and the Servicer
      has successfully reported the foreclosure sale or deed-in-lieu of foreclosure
      via Resolve® and the Loan Level Reporting tool (see Exhibit 88, Servicing Tools)
      pursuant to Section 9603.1(b), the Servicer will no longer have the responsibility
      for the following REO activities, including for properties located in States
      that have a redemption, confirmation process or ratification of sale: ■ Securing,
      maintaining, inspecting, protecting and preserving the property ■ Making advances
      to superior lienholders, including condominium/homeowners association (HOA)
      or Cooperative Corporation assessments (see Chapter 8801 for special Servicing
      requirements for Cooperative Share Loans), Condominium Unit maintenance fees
      or Cooperative Unit Maintenance Fees and ground rents ■ Evicting the occupants
      in the property ■ Marketing and rehabilitating the REO Servicers are responsible
      for the following activities until the sale of the REO by Freddie Mac or the
      MI, FHA, RHS or VA: ■ Filing and concluding FHA, RHS and VA claims, if applicable.
      (Freddie Mac will file MI claims.) ■ Filing and concluding property insurance
      claims, if applicable, and applying for premium refunds, in accordance with
      Section 9603.1(d). The Servicer is required to cancel any Freddie Mac Single-Family
      Seller/Servicer Guide Chapter 9603 As of 11/19/25 Page 9603-2 existing property
      insurance policies no later than 14 days after the foreclosure sale or deed-in-lieu
      of foreclosure has been successfully reported to Freddie Mac. Freddie Mac may
      instruct the Servicer to maintain property insurance (even if the property is
      vacant and has no claimable damage). If Freddie Mac makes this request, the
      Servicer must continue the insurance coverage until Freddie Mac notifies the
      Servicer that Freddie Mac has sold the REO. ■ Referring all inquiries and offers
      regarding purchase of the REO to Freddie Mac (see Directory 6) within one Business
      Day of the inquiry or offer ■ Fulfilling all requests made by Freddie Mac, including
      attorney selection. If the Servicer requires the assistance of an attorney in
      fulfilling any of the obligations set forth in this chapter, the Servicer must
      use an attorney who meets the criteria in Section 9501.2. ■ Taking such action
      that Freddie Mac may request regarding a property Servicers may review the REO
      Overview report, accessible via the “REO” tile of the Servicer’s Servicer Performance
      Profile (see Exhibit 88), for the property status. The Servicer may also call
      Customer Service at 800-FREDDIE to obtain this information. Freddie Mac will
      not send the Servicer a written notice of the sale of the REO. (b) Required
      REO documentation and reporting When reporting an REO, the Servicer must report
      the foreclosure sale result “REO” in Resolve no later than one Business Day
      immediately following the date of the foreclosure sale. Refer to Section 9301.9(a).
      The Servicer must submit to Freddie Mac (see Directory 6) any information Freddie
      Mac requests from the Mortgage file within 15 Business Days of the date of its
      request. (Refer to Section 3302.1(c) for Freddie Mac’s record retention requirements
      for Mortgage files on foreclosed Mortgages.) Additionally, for a Cooperative
      Unit in REO, the Servicer must submit the information listed in Section 8801.4(d)
      if requested by Freddie Mac. (c) Notifying the taxing authority/HOA of REO Within
      five days of successfully reporting the foreclosure sale or deed-in-lieu of
      foreclosure via Resolve, the Servicer must notify all organizations that require
      notice of Freddie Mac’s ownership of the property to ensure that statements
      are sent to the appropriate location. This includes, but is not limited to,
      the taxing authority, condominium association, municipality, HOA or Cooperative
      Corporation (see Chapter 8801 for special Servicing requirements for Cooperative
      Share Loans), and any organization as required by law. When the Servicer contacts
      these organizations, the Servicer must update the remitter’s name as follows:
      Federal Home Loan Mortgage Corporation Freddie Mac Single-Family Seller/Servicer
      Guide Chapter 9603 As of 11/19/25 Page 9603-3 c/o Radian Real Estate Management
      7730 South Union Park Avenue, Suite 400 Midvale, UT 84047 Important: Freddie
      Mac will pay the property taxes, condominium/HOA or Cooperative Corporation
      assessments, Condominium Unit maintenance fees or Cooperative Unit Maintenance
      Fees and ground rents, as applicable, as they become due after the Servicer
      successfully reports the foreclosure sale or the deed-in-lieu of foreclosure.
      Freddie Mac may retain a vendor to conduct such activities. There are special
      requirements for REO located in California. California taxing authorities reassess
      properties for supplemental taxes from the foreclosure sale date to the sale
      date of the REO. Also, taxing authorities often generate a supplemental tax
      statement long after the REO sale date. Therefore, the Servicer must notify
      the taxing authority in writing to send any supplemental tax bills to Freddie
      Mac at the address above within five days following the foreclosure sale or
      the deed-in-lieu of foreclosure date. (d) Property insurance for REO The Servicer
      must maintain or cancel the existing property insurance policy according to
      the requirements in this section and Section 8202.6. Additionally, the Servicer
      must assist in the filing of a property insurance claim, when applicable, according
      to requirements in Section 9603.1(d)(ii) below. (i) Maintaining or canceling
      property insurance The Servicer must take all actions required in the mortgage
      clause of all applicable property insurance policies, including, but not limited
      to, providing all notices to the insurer required under such clause in order
      to preserve the coverage and its maximum benefits for the Servicer and/or Freddie
      Mac as mortgagee. The Servicer must cancel such policies within 14 days after
      the foreclosure sale or deed-in-lieu of foreclosure has been reported to Freddie
      Mac, even if there is claimable damage to the property or if the property has
      sold. (ii) Filing claims A property recovery firm will handle the insurance
      claim filing process on Freddie Mac’s behalf. The Servicer must provide that
      firm with the necessary information to file and process the claim within three
      Business Days of their request for such information. (iii) Obtaining a refund
      for the unearned insurance premiums After canceling the policy, the Servicer
      must submit a request for the unearned portion of the insurance premium to the
      insurance company for any premium that the Servicer paid on behalf of the Borrower,
      if applicable. The Servicer must offset any refund it receives Freddie Mac Single-Family
      Seller/Servicer Guide Chapter 9603 As of 11/19/25 Page 9603-4 from the insurance
      company against expenses the Servicer requests via PAID (Payments Automated
      Intelligent and Dynamic) (see Exhibit 88). (e) Canceling utilities for REO Once
      the Servicer has successfully reported the foreclosure sale or deed-in-lieu
      of foreclosure to Freddie Mac, Freddie Mac or its agent/vendor will transfer
      the utilities to Freddie Mac. The Servicer can obtain reimbursement for any
      utility bills it paid that Freddie Mac approved in advance or the Servicer incurred
      up to the foreclosure sale or deed-in-lieu of foreclosure pursuant to the process
      for reimbursement of expenses in Section 9603.3(d). 9603.2: Filing FHA/VA/RHS
      and primary mortgage insurance claims (09/10/25) This section contains requirements
      related to: ■ FHA/VA/RHS claim filing ■ Primary mortgage insurance claim filing
      ■ Offers to purchase the property with a pending mortgage insurance claim ■
      Receipt of claim payment ■ Reduced, suspended or denied claims ■ Remittance
      of primary mortgage insurance claim payments (a) FHA/VA/RHS claim filing On
      a Mortgage that is insured by the FHA or guaranteed by the VA or RHS, the Servicer
      must process the claim for FHA insurance or VA or RHS guaranty benefits within
      the agency’s established time frames and according to the agency’s requirements
      to ensure that the claim recipient receives the maximum claim payment amount.
      (i) FHA, VA or RHS claim filing for Mortgages subject to a recourse obligation,
      including indemnification The Servicer must file the claim to ensure that payment
      is made directly to the Servicer. Because the Servicer is the claim recipient,
      the Servicer should ensure that it receives the maximum claim payment amount
      to apply towards any expenses incurred, as Freddie Mac will not reimburse the
      Servicer for expenses incurred on Mortgages subject to a recourse obligation.
      (See Section 9701.1(d) on Freddie Mac’s rights.) Freddie Mac Single-Family Seller/Servicer
      Guide Chapter 9603 As of 11/19/25 Page 9603-5 (ii) FHA, VA or RHS claim filing
      for Mortgages not subject to a recourse obligation or indemnification The Servicer
      must file the claim in Freddie Mac’s name to ensure that payment is made directly
      to Freddie Mac (see Directory 6). Because Freddie Mac is the claim recipient,
      the Servicer should ensure that Freddie Mac receives the claim payment, in the
      maximum claim payment amount, before seeking reimbursement for expenses incurred
      on the Mortgage. (b) Primary mortgage insurance claim filing Freddie Mac will
      file a claim for loss with the MI if the Mortgage is covered by primary mortgage
      insurance and will manage the claims payment process with the MI. The Servicer
      must provide all information and documentation pertaining to the claim to the
      MI no later than 60 days after the foreclosure sale, short sale or acceptance
      of a deed-in-lieu of foreclosure or within any shorter time frame as specified
      by the mortgage insurance master policy or by Freddie Mac. (c) Offers to purchase
      the property with a pending mortgage insurance claim A Servicer that receives
      an inquiry or an offer regarding purchase of an REO property must contact its
      Freddie Mac REO claim specialist (see Directory 6) within one Business Day of
      receiving the inquiry or offer. (d) Receipt of claim payment If the Servicer
      receives a claim payment intended for Freddie Mac, whether from the MI or applicable
      entity (see Section 9603.2(a) on FHA/VA/RHS claim filing and Section 9603.2(b)
      on primary mortgage insurance claim filing), the Servicer must send the funds
      to Freddie Mac (see Directory 6) within 10 Business Days after the Servicer
      receives them. The Servicer must also include all supporting documentation relating
      to the claim payment received from the MI or applicable entity, including a
      copy of the claim payment check. However, if the Mortgage insured by the FHA
      or guaranteed by the VA or RHS is subject to a recourse obligation, including
      indemnification, the Servicer does not need to send the funds to Freddie Mac.
      (e) Reduced, suspended or denied claims If the claim payment amount is reduced,
      suspended or denied by the MI due to the Servicer’s actions or inactions including,
      but not limited to, failure to comply with the Guide or applicable mortgage
      insurance requirements, then Freddie Mac may exercise its remedies provided
      by the Guide and the other Purchase Documents for the amount that is reduced,
      suspended or denied. Refer to Chapter 3602 regarding repurchases, repurchase
      alternatives and other remedies. (f) Remittance of primary mortgage insurance
      claim payments Freddie Mac Single-Family Seller/Servicer Guide Chapter 9603
      As of 11/19/25 Page 9603-6 When Freddie Mac receives the claim payment from
      the MI, Freddie Mac will remit any portion of the proceeds due to the Servicer,
      less any outstanding amounts due to Freddie Mac from the Servicer.'
  judgment: false
