source:
  type: guide
  id: fhlmc-1301.2
  authority: Freddie Mac Single-Family Seller/Servicer Guide Section 1301.2 — Compliance
    with applicable law
  description: Freddie Mac Single-Family Seller/Servicer Guide Section 1301.2 — Compliance
    with applicable law.
  coverage_tier: operative
obligations:
- id: fhlmc-1301.2-full
  canonical_id: fhlmc-1301.2-full
  section: Freddie Mac Single-Family Seller/Servicer Guide Section 1301.2 — Compliance
    with applicable law
  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 1301.2 — Compliance
      with applicable law
    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: '1301.2: Compliance with applicable law (12/17/25) This section
      contains requirements related to: ■ Seller/Servicer obligations ■ Office of
      Foreign Assets Control (OFAC) screening; notice of OFAC match ■ Anti-money laundering
      (AML) compliance; reporting AML non-compliance and Suspicious Activity ■ FHFA
      Suspended Counterparty Program ■ Seller lending practices ■ Servicer-maintained
      fair lending data elements ■ Servicer responsibility for incident response program
      and notice of an incident ■ Servicer diversity practices – minority, women and
      disabled inclusion ■ Servicer adverse action notices Freddie Mac Single-Family
      Seller/Servicer Guide Chapter 1301 As of 05/06/26 Page 1301-2 ■ Repurchase requests
      related to compliance with laws representations and warranties ■ Address confidentiality
      programs (ACPs) (a) Seller/Servicer obligations The Seller/Servicer agrees to
      comply with all applicable federal, State and local laws, ordinances, regulations,
      orders and regulator guidance (collectively, “Applicable Laws”), including,
      without limitation and as amended, the following Applicable Laws: ■ Title VI
      of the Civil Rights Act of 1964 ■ Title VIII of the Civil Rights Act of 1968,
      as amended ■ Section 527 of the National Housing Act ■ The Equal Credit Opportunity
      Act ■ The Fair Credit Reporting Act ■ All Applicable Laws governing consumer
      protection, data privacy and/or the safeguarding of Borrower personal information
      including, without limitation, the Gramm-Leach-Bliley Act ■ Executive Order
      11063, Equal Opportunity in Housing, issued by the President of the United States
      on November 20, 1962 ■ The foreign assets control regulations, 31 C.F.R. Chapter
      V, as amended, and any authorizing legislation or executive order relating thereto,
      as administered by OFAC within Treasury (collectively “OFAC Regulations”) ■
      The Bank Secrecy Act, the Money Laundering Control Act and Title III of the
      USA PATRIOT Act and the Anti-Money Laundering Act of 2020 ■ Section 5 of the
      Federal Trade Commission Act and similar laws that prohibit unfair or deceptive
      acts or practices ■ The Truth in Lending Act ■ The Real Estate Settlement Procedures
      Act ■ The Fair Debt Collections Practices Act ■ The Homeowners Protection Act
      of 1998 Freddie Mac Single-Family Seller/Servicer Guide Chapter 1301 As of 05/06/26
      Page 1301-3 ■ Judicial and professional rules of conduct governing discussions
      with opposing parties in litigation when represented by counsel (e.g., solicitation
      of delinquent Borrowers in bankruptcy or Borrowers engaged in litigation with
      the Servicer) ■ The U.S. Bankruptcy Code ■ The Electronic Signatures in Global
      and National Commerce Act, as enacted by the United States government (“E-SIGN”)
      ■ The Uniform Electronic Transactions Act, as enacted by the applicable State
      (“UETA”) unless superseded by E-SIGN Without limiting the preceding provisions
      of this Section 1301.2, the Seller/Servicer must comply with and make such disclosures
      to Borrowers and other individuals as are required by, and must otherwise comply
      with, the requirements of applicable State privacy and consumer protection laws,
      including, without limitation (i) the California Consumer Privacy Act of 2018
      and its implementing regulations (the “CCPA”), and (ii) similar State laws and
      regulations now existing or that may be effective in the future. The Seller/Servicer
      certifies that it is and will continue to be aware of the requirements of such
      laws and regulations and covenants that it will comply with their requirements
      and restrictions. In addition, upon Freddie Mac’s request, the Seller/Servicer
      must cooperate with Freddie Mac in connection with responding to and complying
      with consumer requests and other requests received by Freddie Mac or on behalf
      of persons who wish to exercise their rights under the CCPA and similar State
      laws and regulations. The Seller/Servicer’s obligation to comply with the requirements
      of the applicable State privacy and consumer protection laws, as well as to
      cooperate with Freddie Mac, will survive the termination of the Seller/Servicer’s
      right to sell or service Mortgages pursuant to the Guide. This obligation lasts
      for the greater of: ■ The life of the subject Mortgage(s) plus 7 years ■ The
      expiration of applicable retention requirements pursuant to Applicable Laws
      ■ The period until the Seller/Servicer lawfully destroys the Mortgage files
      or Freddie Mac information in the Seller/Servicer’s possession and certifies
      the destruction in compliance with Section 1301.3 The Seller/Servicer agrees
      to indemnify and hold Freddie Mac harmless from and against all claims, judgments,
      losses, costs and expenses incurred by Freddie Mac arising out of the Seller/Servicer’s
      violation of any Applicable Law. Freddie Mac Single-Family Seller/Servicer Guide
      Chapter 1301 As of 05/06/26 Page 1301-4 The Seller/Servicer agrees and acknowledges
      that it cannot assume that, because it complies with all applicable Freddie
      Mac requirements, that the Seller/Servicer therefore complies with all Applicable
      Laws. (b) OFAC screening; notice of OFAC match Seller/Servicers must comply
      with OFAC Regulations and must maintain a compliance program that establishes
      policies and procedures for complying with OFAC Regulations. The OFAC compliance
      program must include: ■ Clear policies and procedures ■ Periodic and on-going
      screening against the list of Specially Designated Nationals and Blocked Persons
      (“OFAC SDN List”) ■ Process for investigating and escalating potential matches,
      blocking and rejecting transactions and managing blocked accounts ■ Record retention
      requirements ■ System of internal controls ■ Independent testing ■ Documented
      training program Sellers must screen each Borrower and Guarantor against OFAC’s
      most recent OFAC SDN List prior to delivery to Freddie Mac. If a Borrower or
      Guarantor is on the OFAC SDN List, the Mortgage is ineligible for sale to Freddie
      Mac. The Servicer must periodically screen the Mortgages that it services for
      Freddie Mac against the OFAC SDN List. Such screening must occur on a periodic
      and ongoing basis and, when there are updates to the OFAC SDN List, be based
      on the Servicer’s OFAC compliance program and be commensurate with the Servicer’s
      OFAC risk profile (i.e., Servicers must screen Freddie Mac Mortgages with at
      least the same frequency as they do their own portfolio). If a valid match is
      identified, the Servicer must notify Freddie Mac via e-mail within 24 hours
      of identifying to discuss potential changes to the Servicing of the associated
      Mortgage, which may include, but are not limited to, the blocking and/or segregation
      of Mortgage-related funds and ceasing certain Servicing-related activities (see
      Directory 1). Such e-mail notification must include: ■ Freddie Mac loan number
      ■ Borrower name Freddie Mac Single-Family Seller/Servicer Guide Chapter 1301
      As of 05/06/26 Page 1301-5 ■ Name, title, e-mail address and telephone number
      for the point of contact at the Servicer who will be able to discuss the OFAC
      SDN List match Upon receipt of the notice, a representative from Freddie Mac
      will contact the Servicer to discuss the OFAC SDN List match and any next steps.
      Freddie Mac may require the Servicer to provide additional documentation or
      information regarding the OFAC SDN List match. Notifying Freddie Mac of a confirmed
      match against the OFAC SDN List does not relieve the Servicer of any of its
      responsibilities under OFAC Regulations. (c) AML compliance; reporting AML non-compliance
      and Suspicious Activity Seller/Servicers subject to the AML provisions of the
      Bank Secrecy Act must establish and maintain a compliance program that ensures
      compliance with all applicable provisions of the Bank Secrecy Act and implementing
      federal regulations. Seller/Servicers must, as permitted by law, notify Freddie
      Mac (see Directory 1) within seven Business Days of confirmation of any instances
      of the Seller/Servicer’s own non- compliance or compliance failure related to
      the AML requirements of the Bank Secrecy Act, the Money Laundering Control Act,
      Title III of the USA Patriot Act, the Anti-Money Laundering Act of 2020 and
      applicable implementing federal regulations. Seller/Servicers, including those
      not subject to the AML provisions of the Bank Secrecy Act, must establish and
      maintain a program designed to detect and report Suspicious Activity in the
      origination, delivery or Servicing of Mortgages delivered to Freddie Mac. The
      program must include: ■ A designated employee responsible for overseeing the
      program ■ Policies, procedures and internal controls designed to detect Suspicious
      Activity and report to Freddie Mac (see Directory 1) in accordance with Section
      3201.2 ■ A documented training program with training delivered to appropriate
      employees at the time of hire and at least annually thereafter ■ Independent
      testing to monitor and maintain an adequate program (d) FHFA Suspended Counterparty
      Program Seller/Servicers must comply with the requirements set forth in Section
      3101.2 applicable to FHFA’s Suspended Counterparty Program. (e) Seller lending
      practices Freddie Mac Single-Family Seller/Servicer Guide Chapter 1301 As of
      05/06/26 Page 1301-6 The Seller must employ business practices that promote
      fair lending. (f) Servicer-maintained fair lending data elements Servicers must
      maintain the following fair lending data elements for all Freddie Mac Mortgages
      originated on or after March 1, 2023, provided they were obtained during the
      origination process: ■ Race of Borrower(s) ■ Age of Borrower(s) ■ Ethnicity
      of Borrowers(s) ■ Gender of Borrower(s) ■ Preferred language of Borrower(s)
      These data elements must be stored in a format that can be searched, queried
      and transferred. For each Transfer of Servicing on or after March 1, 2023, if
      the fair lending data was obtained during the origination process and is available,
      the Transferor Servicer must transmit the fair lending data listed above to
      the Transferee Servicer. Upon Transfer of Servicing, the Transferee Servicer
      must begin to maintain this data in accordance with the above requirements.
      As of the Effective Date of Transfer, the Transferee Servicer must begin to
      maintain this data in accordance with the above requirements. Note: In the event
      of a future Transfer of Ownership or assumption of the Mortgage, Servicers may,
      but are not required to, update these data elements. (g) Servicer responsibility
      for incident response program and notice of an incident Servicers must develop
      and maintain a “Response Program” consistent with the requirements of the Interagency
      Guidance on Response Programs for Unauthorized Access to Customer Information
      and Customer Notice (see 12 CFR Parts 208 and 225) and Freddie Mac’s requirement
      for an incident response plan pursuant to Section 1302.2(b)(xv). The Servicer’s
      obligation to maintain a response program and provide notice of an Incident
      pursuant to Section 1302.5 must survive the termination of the Seller/Servicer’s
      right to sell or service Mortgages pursuant to the Guide and must continue for
      as long as the Servicer has possession of Mortgage files or Freddie Mac information.
      If the Servicer knows or believes or has reasonable information from which to
      know or believe, or a cybersecurity professional could reasonably conclude from
      the circumstances Freddie Mac Single-Family Seller/Servicer Guide Chapter 1301
      As of 05/06/26 Page 1301-7 and available information, that there may have been
      an Incident (as defined in Section 1302.5(a)) that compromises the security,
      confidentiality, availability, integrity or privacy of Freddie Mac confidential
      information or Protected Information maintained by the Servicer or in its possession
      or control or any other information about one or more Borrowers or other individuals
      that is the subject of any state breach notification law, and if that Incident
      is related to Mortgages owned or guaranteed by Freddie Mac, the Servicer must
      comply with the notification requirements under Section 1302.5. If the Servicer
      determines not to send notices to any Borrowers and/or other individuals affected
      by a certain Incident, the Servicer must provide written notice to Freddie Mac
      that includes a rationale and explanation for not sending notice to all affected
      Borrowers and other individuals as soon as practicable after the Incident. Notwithstanding
      the Servicer’s determination not to provide such notices, Freddie Mac may direct
      the Servicer to provide notices to the affected Borrowers at the Servicer’s
      expense. Following the termination of the Seller/Servicer’s right to sell or
      service Mortgages, the Servicer continues to be obligated to notify Freddie
      Mac of an Incident during such time as the Servicer retains the Mortgage files
      or Freddie Mac information. The Seller/Servicer agrees to indemnify and hold
      Freddie Mac harmless from and against all claims, judgments, losses, costs and
      expenses incurred by Freddie Mac arising out of any Incident. If the Servicer
      intends to refer to Freddie Mac in any notices it sends to Borrowers and others
      on Mortgages whose information was affected by the Incident, the Servicer must
      notify Freddie Mac within a reasonable time prior to sending those notices.
      Freddie Mac must have the opportunity to review the content of the notices prior
      to their delivery. As further described in Section 1302.5, in connection with
      all Incidents, the Servicer must cooperate with Freddie Mac, including, without
      limitation, by providing all requested information and assistance, such as:
      ■ Enabling Freddie Mac to comply with its legal obligations ■ Providing technical
      or forensics information to determine the extent of the Incident ■ Supplying
      other information and assistance to identify, evaluate and manage any issues
      arising out of the Incident as Freddie Mac deems necessary or advisable (h)
      Servicer diversity practices – minority, women and disabled inclusion In accordance
      with regulations adopted by FHFA, 12 C.F.R. Pt. 1207, pursuant to the Housing
      and Economic Recovery Act of 2008, 12 U.S.C. § 4520 (“HERA”), each Seller/Servicer
      will: Freddie Mac Single-Family Seller/Servicer Guide Chapter 1301 As of 05/06/26
      Page 1301-8 1. Practice the principles of equal employment opportunity and non-discrimination
      in all its business activities 2. Contractually require each subcontractor that
      the Servicer engages to provide services or goods to Freddie Mac to practice
      the principles of equal employment opportunity and non-discrimination in all
      its business activities, and 3. Upon request, provide Freddie Mac with information
      and appropriate certifications regarding: ■ The diversity status of the Seller/Servicer
      ■ The diversity status of subcontractors the Seller/Servicer engages to originate
      Mortgage under the Purchase Documents and/or provide services or goods to Freddie
      Mac with respect to Servicing under the Purchase Documents ■ The amounts Freddie
      Mac pays to the Servicer for Servicing under the Purchase Documents ■ The amounts
      the Servicer pays to subcontractors to provide services or goods to Freddie
      Mac with respect to Servicing under the Purchase Documents, and ■ Any other
      information Freddie Mac requests to comply with HERA and applicable diversity
      and inclusion regulations (i) Servicer adverse action notices Below are Servicer
      responsibilities when Freddie Mac participates in evaluating a Borrower for
      a workout or relief option that results in a denial: ■ If Freddie Mac participated
      in evaluating a Borrower for a workout or relief option that is not approved,
      Freddie Mac will provide the reasons for denial ■ If Freddie Mac participated
      in the decision and if the decision gives rise to an obligation to provide the
      Borrower with a notice or notices under applicable law, including, but not limited
      to, adverse action notices required by the Equal Credit Opportunity Act or the
      Fair Credit Reporting Act, then the Servicer must provide such notices to the
      Borrower on behalf of Freddie Mac ■ In these cases, the notices provided by
      the Servicer to the Borrower must identify both the Servicer and Freddie Mac
      as having participated in the evaluation of the workout or relief option and
      the decision to deny the request. (j) Repurchase requests related to compliance
      with laws representations and warranties Freddie Mac Single-Family Seller/Servicer
      Guide Chapter 1301 As of 05/06/26 Page 1301-9 Freddie Mac will only issue a
      repurchase request for Seller violations of law that: ■ Could be expected to
      impair Freddie Mac’s or its Servicer’s ability to enforce the Note or Mortgage
      ■ Impose assignee liability, or ■ Are found to have been violations of, or if
      Freddie Mac has made a finding based on the facts available to Freddie Mac that
      a violation may have occurred of, one or more of the following laws or related
      regulations: ❑ OFAC Regulations ❑ The Fair Housing Act ❑ Anti-discrimination
      provisions of the Equal Credit Opportunity Act (ECOA) ❑ The Securities Exchange
      Act of 1934, and ❑ Unfair, deceptive, or abusive acts or practices under federal
      and State laws (UDAAP) With respect to UDAAP, Freddie Mac will take into consideration
      published federal and State announcements of interpretations as well as all
      published judicial and administrative decisions and will not enforce a repurchase
      if the matter can be cured by remediation to the injured party and the Seller
      makes such remediation. However, three or more years after the Settlement Date
      of a Mortgage, Freddie Mac may not seek repurchase on UDAAP grounds regarding
      a specific practice unless: ■ A lender self reports ■ A federal or State enforcement
      authority has indicated, asserted or claimed that such practice violates or
      may violate UDAAP ■ A federal or State court has held that a specific practice
      violates UDAAP A repurchase demand based on a compliance with law violation
      by the Seller will include supporting facts and findings made by Freddie Mac
      in the course of considering the facts and circumstances before it. Freddie
      Mac’s determination that a violation has occurred must be consistent with the
      facts and circumstances provided by the Seller and any other information obtained
      by Freddie Mac as part of its evaluation of the situation. When Freddie Mac
      issues a repurchase request to the Seller in connection with a failure to comply
      with laws and there is pending litigation underway involving that same issue
      or a Freddie Mac Single-Family Seller/Servicer Guide Chapter 1301 As of 05/06/26
      Page 1301-10 government agency with authority to make a determination regarding
      the issue has publicly stated that it is reviewing the issue, the Seller will
      not be required to repurchase until 30 days after the litigation has been dismissed,
      settled or concluded at trial in an adjudication or the governmental agency
      has made a final determination, as applicable (collectively, “the Resolution”).
      After the Resolution, the Seller may request that Freddie Mac review the appropriateness
      of the repurchase request in light of the Resolution. Freddie Mac will withdraw
      the repurchase request where appropriate. Freddie Mac will not issue a repurchase
      request to the Seller based on violations of the ability to repay provisions
      under the Truth in Lending Act (“ATR”) unless a court or regulator concludes
      the Mortgage did not comply with ATR. This section does not limit Freddie Mac’s
      rights to issue repurchase requests for Servicer breach of its obligations regarding
      compliance with Applicable Laws. (k) ACPs A Borrower may be a participant in
      a State-sponsored ACP that provides the Borrower with a substitute mailing address
      to be used instead of the Borrower’s home address for all mail correspondence.
      Sellers must comply with the applicable federal and State laws related to ACPs.
      Within five Business Days after the Funding Date of any Mortgage for which the
      Borrower is a participant in an ACP, the Seller must provide the following information
      to Freddie Mac at the e-mail address Loan_Delivery_Funding_Ops@FreddieMac.com:
      ■ Freddie Mac loan number ■ Borrower name ■ Borrower ACP mailing address (including,
      when applicable, any lot number or required uniquely identifiable number) Freddie
      Mac will use the provided substitute ACP mailing address when required by law
      for mailing correspondence to the Borrower, such as the Mortgage transfer disclosures
      required under the Truth in Lending Act. Freddie Mac Single-Family Seller/Servicer
      Guide Chapter 1301 As of 05/06/26 Page 1301-11'
  judgment: false
