Freddie Mac Single-Family Seller/Servicer Guide 1201.3 — Characterization and nature of Mortgage purchase transactions

Freddie Mac Single-Family Seller/Servicer Guide 1201.3 — Characterization and nature of Mortgage purchase transactions

Effective 2025-12-17 · Freddie Mac's stamp for this section

The Seller and Freddie Mac agree that each and every Mortgage purchase and sale transaction entered into under the Purchase Documents (including, without limitation, any purchase and sale under the Cash, Guarantor or MultiLender Swap programs)—whether sold with or without recourse—is expressly intended by the Seller and Freddie Mac: ■ To be construed as the Seller’s sale, transfer, conveyance and delivery of all such Mortgages to Freddie Mac ■ To be construed as Freddie Mac’s purchase and receipt of such Mortgages, and ■ Not to be construed as the Seller’s pledge to secure a debt or any other obligation The Seller and Freddie Mac intend for the sale, transfer, conveyance and delivery of all Mortgages to Freddie Mac by the Seller to be true, absolute and unconditional sales conveying all of the Seller’s right, title and interest in and to the Mortgages and all proceeds from the Mortgages. The Seller represents and warrants to, and covenants and agrees with Freddie Mac, that it does not retain any rights or legal ownership interests in the Mortgages it sells to Freddie Mac or in any payment due under or proceeds from such Mortgages, including, but not limited to: ■ Any portion of the interest due or received under such Mortgages; or ■ The Servicing Contract Rights Freddie Mac acknowledges that a Seller/Servicer may recognize Servicing Contract Rights as assets on its balance sheet in the form of “mortgage servicing rights” in accordance with generally accepted accounting principles (GAAP); however, such recognition as under GAAP does not confer any legal ownership interest in any Servicing Contract Rights or the Mortgage. If despite the intent of the Seller and Freddie Mac, the Mortgages (or any of them) are determined to be property of the Seller (i.e., the sale was not a true sale), Freddie Mac and the Seller agree that: ■ The Purchase Documents created a security agreement within the meaning of the Uniform Commercial Code (UCC) in effect in the applicable State, conveying to Freddie Mac a security interest in all of the Seller’s right, title and interest in and to the Mortgage and all proceeds from the Mortgage ■ Freddie Mac is the secured party under such security agreement ■ The possession by Freddie Mac or its designee (including, without limitation, any applicable Document Custodian) of the Notes (and any related documents) shall be deemed to be possession by the secured party for purposes of perfecting the security interest pursuant to the UCC ■ The Seller shall assist Freddie Mac with any reasonable actions necessary to ensure that Freddie Mac receives a perfected security interest of first priority under applicable law; and ■ Freddie Mac will have all of the rights and remedies of a secured party and creditor under the UCC and may execute and file UCC financing statements as reasonably necessary

Source: Freddie Mac Single-Family Seller/Servicer Guide 1201.3 — Characterization and nature of Mortgage purchase transactions · source URL · snapshot 4c94f67729042dd6