source:
  type: guide
  id: fhlmc-2101.4
  authority: Freddie Mac Single-Family Seller/Servicer Guide Section 2101.4 — Financial
    reporting
  description: Freddie Mac Single-Family Seller/Servicer Guide Section 2101.4 — Financial
    reporting.
  coverage_tier: operative
obligations:
- id: fhlmc-2101.4-full
  canonical_id: fhlmc-2101.4-full
  section: Freddie Mac Single-Family Seller/Servicer Guide Section 2101.4 — Financial
    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 2101.4 — Financial
      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: '2101.4: Financial reporting (03/31/24) (a) All Seller/Servicers
      The Seller/Servicer must at all times comply with the following reporting requirements:
      ■ Each Seller/Servicer must submit annual audited financial statements to Freddie
      Mac, except that: ❑ A federally insured depository institution need not submit
      such statements, and ❑ A Seller/Servicer that is approved only to sell Mortgages
      to Freddie Mac may submit Reviewed Financial Statements ■ Each Seller/Servicer
      that is a subsidiary of another institution and that is required to submit audited
      financial statements (as noted above) may submit audited financial statements
      prepared at the Seller/Servicer level or at its parent level, with a consolidating
      worksheet ■ An annual audited report on internal controls is required only if
      audited financial statements are required by Freddie Mac. This internal control
      report should be a separate report stating whether the independent public accountant
      (IPA) noted any material Freddie Mac Single-Family Seller/Servicer Guide Chapter
      2101 As of 05/06/26 Page 2101-8 weaknesses during the audit of the financial
      statements. The report should be prepared in accordance with Interpretation
      1 of Statement and Auditing Standards (SAS) No. 60, “Communication of Internal
      Control Structure Related Matters Noted in an Audit,” titled, “Reporting on
      the Existence of Material Weaknesses” (AICPA, Professional Standards, vol. I,
      AU sec. 9325). If audited financial statements and internal control reports
      are required by Freddie Mac, the audited financial statements and internal control
      reports must be prepared by an IPA who is a licensed certified public accountant
      (CPA) or a public accountant licensed on or before December 31, 1970, who complies
      with the applicable provisions of the public accountancy law and rules of the
      jurisdiction(s) where the audit is conducted and the jurisdiction(s) in which
      the IPA is licensed. Freddie Mac reserves the right to require audited financial
      statements, audited reports on internal controls, additional financial statements
      and other information relevant to the Seller/Servicer’s eligibility, including
      audited or Reviewed Financial Statements for the Seller/Servicer’s parent, subsidiaries
      and affiliates, at any time and regardless of the Seller/Servicer’s annual eligibility
      reporting requirements. (b) Seller/Servicers that are Large Non-Depository Institutions
      All Large Non-Depository Institutions, as defined in Section 2101.2, must obtain
      an assessment of the Seller/Servicer’s performance and creditworthiness by a
      qualified, independent third-party on an annual basis. The assessment must be
      made available to Freddie Mac upon request, must substantiate that the Seller/Servicer
      has adequate capacity to perform its financial obligations in an adverse stress
      environment and must meet the following criteria: ■ One primary Servicer Rating
      or master Servicing Rating, as applicable, as defined in Section 2101.2, for
      Large Non-Depository Institutions that have greater than or equal to $50 billion
      in Servicing UPB; and ■ One primary Servicer Rating or master Servicing Rating,
      as applicable, and one third- party Long-Term Senior Unsecured Debt Rating or
      Long-Term Corporate Family Rating, each as defined in Section 2101.2, for Large
      Non-Depository Institutions that have greater than $100 billion in Servicing
      UPB; and ■ One primary Servicer Rating or master Servicing Rating, as applicable,
      and issued by two Rating Agencies, each of which must issue either a third-party
      Long-Term Senior Unsecured Debt Rating or Long-Term Corporate Family Rating
      for Large Non- Depository Institutions that have greater than $150 billion in
      Servicing UPB Additionally, Large Non-Depository Institutions must submit to
      Freddie Mac, annually on or before March 31, a capital and liquidity plan that
      describes how the Seller/Servicer intends to manage its capital and liquidity
      consistent with Freddie Mac requirements. Capital and Freddie Mac Single-Family
      Seller/Servicer Guide Chapter 2101 As of 05/06/26 Page 2101-9 liquidity plans
      must be submitted to CCRM_Mortgage_Bank@FreddieMac.com and must, at a minimum:
      ■ Include a description of the Seller/Servicer’s corporate governance over the
      capital and liquidity planning process, such as oversight responsibilities of
      Senior Management and its board of directors, and a discussion of the Seller/Servicer’s
      risk management framework; ■ Describe processes to monitor and measure liquidity
      risks, such as business activity reports and financial forecast and cashflow
      projections; ■ Contain capital and liquidity contingency funding plans and provide
      for testing and reaffirmation of such plans at least annually; ■ Provide for
      an annual liquidity stress test, including a stress test of the value of Servicing
      Contract Rights in an adverse scenario (1) developed by the Seller/Servicer
      or (2) that may be prescribed by Freddie Mac, or both. The Servicing Contract
      Rights stress test may be conducted either in-house or using a third-party vendor;
      and ■ Require notice to Freddie Mac within five (5) Business Days following
      any material change to or material deviation from the plan. During times of
      stress, material changes must require immediate notification within one (1)
      Business Day. 2101.5: Mortgage bankers financial reporting (04/30/24) Each Seller/Servicer
      that is a mortgage banker must submit a complete and accurate Form 1055, Mortgage
      Bankers’ Financial Reporting Form, on a quarterly basis. For reporting purposes,
      mortgage bankers are firms other than federally insured depositories originating
      mortgages for sale in the secondary market and/or servicing mortgages. This
      includes Sellers/Servicers that are mortgage banker subsidiaries of federally
      insured depositories. Form 1055 must be completed and submitted as follows:
      ■ For reporting periods ending March 31, June 30 or September 30, Form 1055
      must be filed no later than 30 days after the end of the reporting period. For
      reporting periods ending on December 31, the Form 1055 must be filed no later
      than 60 days after the end of the reporting period. Mortgage bankers with fiscal
      years that do not end on December 31 should refer to the instructions for Form
      1055 at http://www.mbfrf.org. ■ Form 1055 may be printed from the website and
      must be completed and submitted online at http://www.mbfrf.org Freddie Mac Single-Family
      Seller/Servicer Guide Chapter 2101 As of 05/06/26 Page 2101-10 ■ Seller/Servicer’s
      chief executive officer (CEO), chief financial officer (CFO) or an equivalent
      officer must certify that Form 1055 was prepared in accordance with generally
      accepted accounting principles (GAAP) and that the information submitted is
      true and accurate Additionally, for each Seller/Servicer that completes Form
      1055 quarterly reporting and is either (1) a Large Non-Depository Institution,
      as defined in Section 2101.2 or (2) separately identified by Freddie Mac through
      a written communication to that Seller/Servicer, such Seller/Servicer must submit
      a complete and accurate Form 1055A, Monthly Mortgage Bankers’ Financial Reporting
      Short Form, as follows: ■ Form 1055A must be filed no later than the last day
      of the month following the end of the reporting month for the first and second
      months of each fiscal quarter (e.g., Form 1055A will be effective for the April
      2024 filing, due May 31, 2024). Seller/Servicers are not required to provide
      a monthly report for each third month of the fiscal quarter, as the data will
      be captured in the quarterly Form 1055 report. ■ Form 1055A may be printed from
      the website and must be completed and submitted online at http://www.mbfrf.org
      ■ Seller/Servicer’s CEO, CFO or an equivalent officer must certify that Form
      1055A was prepared in accordance with GAAP and that the information submitted
      is true and accurate Failure to submit Form 1055 or 1055A as described herein
      may result in suspension or disqualification of the Seller/Servicer. 2101.6:
      Seller/Servicer insurance requirements (08/10/22) (a) Coverage levels (i) Limits
      of insurance The Seller/Servicer must maintain in effect, at all times and at
      its expense, a fidelity bond and a mortgagee’s errors and omissions (E&O) insurance
      policy. If the Seller/Servicer uses its parent’s bond or policy, as permitted
      in Section 2101.6, the minimum limit of insurance must be based on the consolidated
      base amount for the parent and for all institutions related to the parent that
      are covered by the parent’s bond or policy, as applicable. Freddie Mac will
      accept bonds or policies that provide for an aggregate limit of insurance for
      a bond’s or policy’s term provided that the aggregate at least equals the minimum
      limit per loss or occurrence calculated in accordance with this Section 2101.6.
      Freddie Mac Single-Family Seller/Servicer Guide Chapter 2101 As of 05/06/26
      Page 2101-11 For fidelity bond and E&O insurance, the higher minimum Freddie
      Mac Multifamily coverage limit applies if: ■ The Seller/Servicer is also a Freddie
      Mac Multifamily Seller/Servicer ■ The required fidelity or mortgagee’s E&O coverage
      is provided under the same insurance contract that covers both Home Mortgages
      and Multifamily Mortgages and ■ The Freddie Mac Multifamily Seller/Servicer
      Guide requires a higher limit of fidelity or mortgagee’s E&O coverage (A) Limits
      of fidelity bond The minimum acceptable limits per fidelity loss or occurrence
      are as follows: Base* Minimum required insurance limit $100 million or less
      $300,000 $500 million or less $300,000 +0.15% of base over $100 million $1 billion
      or less $300,000 +0.15% of $400 million (i.e., $600,000) +0.125% of base over
      $500 million Over $1 billion $300,000 +0.15% of $400 million (i.e., $600,000)
      +0.125% of $500 million (i.e., $625,000) +0.1% of base over $1 billion * Base
      = The highest of total annual Home Mortgage and Multifamily Mortgage origination,
      sale or servicing volume including Home Mortgages and Multifamily Mortgages
      held in portfolio. (B) Limits of E&O insurance Mortgagee’s E&O coverage must
      be maintained at a minimum limit equal to the higher of (i) $300,000 or (ii)
      20% of the fidelity coverage required in the table above. If the base consists
      of Home Mortgages only, the limit of mortgagee’s E&O insurance may be capped
      at $10 million. For mortgagee’s E&O insurance, Freddie Mac will accept policies
      providing coverage per Mortgage if the insurance limit per Mortgage is no less
      than the UPB of Freddie Mac Single-Family Seller/Servicer Guide Chapter 2101
      As of 05/06/26 Page 2101-12 the largest Mortgage originated and/or sold by the
      Seller or serviced by the Servicer, whichever is highest. For mortgagee’s E&O
      insurance, Freddie Mac will accept a policy that provides lower limits of insurance
      for losses other than those caused by lack or insufficiency of property insurance
      on Mortgaged Premises, if any such lower limit of insurance is the maximum liability
      that the insurer will assume for similar losses by institutions similar to the
      Seller/Servicer. Examples of calculations of the required minimum insurance
      limits are as follows: Base Calculation Minimum required insurance limit for
      fidelity bond $90 million not applicable $300,000* $400 million $300,000 +0.15%
      of $300 million $750,000 $750,000* $750 million $300,000 +0.15% of $400 million
      +0.125% of $250 million $1,212,500 $1,212,500* $1.5 billion $300,000 +0.15%
      of $400 million +0.125% of $500 million +0.1% of $500 million $2,025,000 $2,025,000**
      * $300,000 in mortgagee’s E&O coverage (the higher of $300,000 or 20% of the
      required fidelity coverage) ** $405,000 in mortgagee’s E&O coverage (the higher
      of $300,000 or 20% of the required fidelity coverage) (ii) Deductibles The maximum
      deductible allowed for any one fidelity loss is the higher of: ■ 5% of the minimum
      limit of fidelity insurance required by Freddie Mac, or ■ $100,000 The maximum
      deductible allowed for any one mortgagee’s E&O loss is the higher of: Freddie
      Mac Single-Family Seller/Servicer Guide Chapter 2101 As of 05/06/26 Page 2101-13
      ■ 5% of the minimum limit of mortgagee’s E&O insurance required by Freddie Mac,
      or ■ $100,000 The deductible may not be calculated based on the actual limit
      of insurance in force. For example, Freddie Mac requires a Servicer to maintain
      at least $5 million in fidelity insurance. The Servicer actually maintains $7
      million in fidelity insurance. The maximum deductible allowed is 5% of $5 million
      or $250.000. (b) Acceptable insurer Freddie Mac will accept coverage underwritten
      by an insurer that is rated A- (A-minus) or better by the A.M. Best Company.
      (c) Parent institution’s coverage When the Seller/Servicer is a subsidiary of
      an institution with fidelity and/or mortgagee’s E&O insurance that meets Freddie
      Mac’s requirements, Freddie Mac will accept the insurance of the Seller/Servicer’s
      parent as adequate for the Seller/Servicer if: ■ The Seller/Servicer is named
      as joint insured, and ■ Coverage under the parent’s policy or policies of insurance
      does not restrict or otherwise limit the Seller/Servicer’s ability to comply
      with all of Freddie Mac’s insurance requirements (d) Other obligations of the
      Seller/Servicer The Seller/Servicer must maintain at its offices a complete
      and accurate copy of its fidelity bonds and mortgagee’s E&O policies for the
      current year and the past five years. Copies of these bonds and policies shall
      be provided to Freddie Mac upon request. The Seller/Servicer authorizes Freddie
      Mac to obtain copies of the bonds and policies and all related information from
      the Seller/Servicer’s insurer and/or agent or representative of the insurer.
      Freddie Mac’s requirements for fidelity and mortgagee’s E&O insurance do not
      diminish, restrict or otherwise limit the Seller/Servicer’s responsibilities
      and obligations stated in the Purchase Documents. The Seller/Servicer must familiarize
      itself with the terms of the fidelity and mortgagee’s E&O coverages and take
      all actions necessary to preserve the coverage and maximum benefits of such
      insurance for the Seller/Servicer and Freddie Mac, as applicable. Freddie Mac
      Single-Family Seller/Servicer Guide Chapter 2101 As of 05/06/26 Page 2101-14
      2101.6: Seller/Servicer insurance requirements (Future effective date 06/08/26)
      (a) Coverage requirements The Seller/Servicer must maintain in effect, at all
      times and at its expense (i) a fidelity bond and (ii) a mortgagee’s errors and
      omissions (E&O) insurance policy. The required limits and deductibles/retentions
      for each coverage are set forth in Sections 2101.7 and 2101.8, respectively.
      If the Seller/Servicer uses a bond or policy that has been issued to its parent
      company, as permitted in Section 2101.6(c), the minimum limit of insurance must
      be based on the consolidated Base (as defined in Section 2101.7(c)) amount for
      the parent and for all institutions related to the parent that are covered by
      the parent’s bond or policy, as applicable. Freddie Mac will accept bonds or
      policies that provide for an aggregate limit of insurance for a bond’s or policy’s
      term on the condition that the aggregate at least equals the minimum limit per
      loss or occurrence calculated in accordance with this Section 2101.7 or 2101.8,
      as applicable. If the Seller/Servicer is also a Freddie Mac Multifamily Seller/Servicer
      and coverage required under this Guide and the Freddie Mac Multifamily Seller/Servicer
      Guide is provided under the same insurance contract, the higher minimum required
      coverage limit shall apply to the Seller/Servicer. If the Seller/Servicer maintains
      broader coverage and/or higher limits than required by this Guide, Freddie Mac
      requires and shall be entitled to the benefits of the broader coverage and/or
      higher limits maintained by the Seller/Servicer. Freddie Mac reserves the right
      to adjust the insurance requirements for any particular Seller/Servicer at Freddie
      Mac’s sole discretion. (b) Acceptable insurer Coverage required under this section
      must be underwritten by an insurer that is rated A- (A- minus) or better by
      the A.M. Best Company. (c) Parent institution’s coverage When the Seller/Servicer
      is a subsidiary of an institution with insurance that meets Freddie Mac’s requirements
      set forth in Sections 2101.6 through 2101.9, Freddie Mac will accept the insurance
      of the Seller/Servicer’s parent as adequate for the Seller/Servicer if: ■ The
      Seller/Servicer is named as joint insured, and Freddie Mac Single-Family Seller/Servicer
      Guide Chapter 2101 As of 05/06/26 Page 2101-15 ■ Coverage under the parent’s
      policy or policies of insurance does not restrict or otherwise limit the Seller/Servicer’s
      ability to comply with all of Freddie Mac’s insurance requirements (d) Other
      obligations of the Seller/Servicer The Seller/Servicer must maintain at its
      offices a complete and accurate copy of its required insurance bonds and policies
      for the current year and the past five years. Copies of these bonds and policies
      shall be provided to Freddie Mac upon request. The Seller/Servicer authorizes
      Freddie Mac to obtain copies of the bonds and policies and all related information
      from the Seller/Servicer’s insurer and/or agent or representative of the insurer.
      Freddie Mac’s requirements for Seller/Servicer insurance do not diminish, restrict
      or otherwise limit the Seller/Servicer’s responsibilities and obligations stated
      in the Purchase Documents. The Seller/Servicer must familiarize itself with
      the terms of the required insurance coverages and take all actions necessary
      to preserve the coverage and maximum benefits of such insurance for the Seller/Servicer
      and Freddie Mac, as applicable. In the event of bankruptcy where a stay is issued
      in relation to insurance coverage, the Seller/Servicer is required to cooperate
      with Freddie Mac and agree to any stipulation requested by Freddie Mac to lift
      the automatic stay in connection with Freddie Mac pursuing its rights and/or
      benefits under any of the bonds and policies required by this Guide. For any
      E&O policy provided on a “claims made” or “claims made and reported” basis,
      the Seller/Servicer must maintain continuous coverage dating back to the date
      on which the Seller/Servicer became subject to this Guide. In the event of termination
      or non-renewal of an E&O policy issued on a “claims made” or “claims made and
      reported” basis, the Seller/Servicer shall either procure replacement coverage
      that provides for the same continuity required by this section, or, if such
      continuity is not available in the marketplace, purchase an extended reporting
      period (sometimes referred to as tail coverage) on the terminated/non-renewed
      coverage for six years.'
  judgment: false
