Freddie Mac Single-Family Seller/Servicer Guide 2101.3 — Activity and reporting requirements

This section contains: ■ Activity thresholds and no-activity fee ■ Financial reporting ■ Mortgage bankers financial reporting ■ Annual certification ■ Annual reporting requirements (a) Activity thresholds and no-activity fee A Seller/Servicer that does not meet certain activity thresholds may be assessed a no-activity fee. To avoid being assessed the no-activity fee, Seller/Servicers must meet at least one of the following activity thresholds: ■ Sell to Freddie Mac during the immediately preceding 36 months ■ Service, or be a Servicing Agent for, a Mortgage portfolio for Freddie Mac as of December 31 of the immediately preceding calendar year New Seller/Servicers are exempt from the fee until they have been approved by Freddie Mac for three years. The no-activity fee may also be assessed for each subsequent calendar year in which the Seller/Servicer does not meet the activity threshold but remains an approved Freddie Mac Seller/Servicer. The fee will be assessed and paid in accordance with the requirements of Chapter 6303. (b) Financial reporting (i) Reporting requirements for all Seller/Servicers The Seller/Servicer must at all times comply with the following reporting requirements: ■ 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 ■ If required to submit audited financial statements (as noted above), a Seller/Servicer that is a subsidiary of another institution 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 weaknesses during the audit of the financial statements, and 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, they must be prepared by an IPA who is a licensed certified public accountant 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. (ii) Seller/Servicers that are Large Non-Depository Institutions

(A) Assessment of Seller/Servicer’s performance and creditworthiness All Large Non-Depository Institutions, as defined in Section 2101.2(a), must obtain an assessment of the Seller/Servicer’s performance and creditworthiness by a qualified, independent thirdparty on an annual basis. The assessment must be made available to Freddie Mac upon request, substantiate that the Seller/Servicer has adequate capacity to perform its financial obligations in an adverse stress environment and meet all of the following criteria: ■ One primary Servicer Rating or master Servicing Rating (as defined in Section 2101.2(a)), as applicable, for Large Non-Depository Institutions that have greater than or equal to $50 billion in Servicing UPB ■ 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(a)) for Large Non-Depository Institutions that have greater than $100 billion in Servicing UPB ■ 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

(B) Capital and liquidity planning 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 liquidity plans must be submitted to [email protected] 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. (c) Mortgage bankers financial reporting (i) Quarterly reporting with Form 1055, Mortgage Bankers’ Financial Reporting Form (MBFRF) Each Seller/Servicer that is a mortgage banker must submit a complete and accurate Form 1055 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, 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 then submitted online at http://www.mbfrf.org ■ Seller/Servicer’s chief executive officer (CEO), chief financial officer (CFO) or 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 (ii) Monthly reporting with Form 1055A, Mortgage Bankers' Financial Reporting Monthly MBFRF Short Form For each Seller/Servicer that completes Form 1055 quarterly reporting and is either (1) a Large Non-Depository Institution 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 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 2027 filing, due May 31, 2027). 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 then submitted online at http://www.mbfrf.org ■ Seller/Servicer’s CEO, CFO or 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. (d) Annual certification Freddie Mac makes the Annual Certification Report available to each Seller/Servicer on or about the end of the Seller/Servicer’s fiscal year. The Annual Certification Report requires: ■ Certain information about the Seller/Servicer and its operations, and ■ The Seller/Servicer’s certification that it continues to meet Freddie Mac’s eligibility requirements and comply with the provisions and requirements of the Guide and the Seller/Servicer’s other Purchase Documents If the Seller/Servicer does not meet or comply with one or more requirements, it must identify each such failure on the Annual Certification Report together with such information concerning remediation of such failure as Freddie Mac may request. See Section 2101.3(e), below for information and requirements regarding submission of the Annual Certification Report. (e) Annual reporting requirements (i) Submission requirements The following must be completed with information as of the Seller/Servicer’s fiscal yearend and submitted to Freddie Mac within 90 days after the end of that fiscal year: ■ Annual Certification Report (see Section 2101.3(d) above) ■ Audited or reviewed financial statements, as required by Section 2101.3(b) above, and ■ Any other documentation requested by Freddie Mac (ii) Report completion Seller/Servicers must access and complete an Annual Certification Report using the Unified Counterparty Experience® (UCount®) system, and any required audited financial statements and auditor’s reports (see Section 2101.3(b)) must be submitted using UCount or electronically as an attachment to an e-mail to [email protected]. The Seller/Servicer is responsible for truthfulness, completeness and accuracy of the information in the electronically executed and submitted Annual Certification Report (including any required or supplemental information submitted with the Annual Certification Report) to the same degree as if the Seller/Servicer’s duly authorized representative made the submission to Freddie Mac in paper and signed in ink. (iii) Consequences of non-compliance A Seller/Servicer that is suspended from selling Mortgages to or Servicing Mortgages for, or that is not approved to sell Mortgages to or service Mortgages for, Freddie Mac is not required to submit an Annual Certification Report unless directed to do so by Freddie Mac. Failure of any other Seller/Servicer to submit the Annual Certification Report as set forth in this Section 2101.3(e) may result in suspension or disqualification of that Seller/Servicer.