Freddie Mac Single-Family Seller/Servicer Guide 3603.1 — Termination of Servicing Contracts and related Servicing Contract Rights

This section contains requirements related to: ■ Termination of Servicing Contracts and related Servicing Contract Rights ■ Termination of the Servicing Contract and related Servicing Contract Rights related to sale of Mortgages by Freddie Mac (a) Termination of Servicing Contracts and related Servicing Contract Rights Freddie Mac may terminate either a Servicer’s entire Servicing Contract or any portion of it, along with related Servicing Contract Rights. This termination can occur, in whole or in part, at any time, with cause or without cause as specified in this chapter. See Section 3603.1(b) below for requirements for termination of the Servicing Contract and related Servicing Contract Rights in connection with the sale of Mortgages by Freddie Mac. A termination of a given portion of the Servicing Contract and related Servicing Contract Rights shall not waive or impair Freddie Mac’s future right, in the exercise of its sole discretion, to terminate all or further portions of the remaining Servicing Contract Rights under the Servicing Contract for any reason listed in Section 2301.1(b), regardless of whether the reason relates to Mortgages subject to the termination of the given portion of the Servicing Contract and related Servicing Contract Rights. Additionally, Freddie Mac may use its sole discretion in selecting which Mortgages shall be subject to a partial termination of the Servicing Contract and related Servicing Contract Rights. In lieu of termination of all or a portion of the Servicing Contract and related Servicing Contract Rights, Freddie Mac may also require the Servicer to engage a Servicing Agent for all or a portion of the Mortgages, for such period of time as determined by Freddie Mac. The Servicing Agent must be approved by Freddie Mac, in its sole discretion, and the Servicer must: ■ Comply with all other applicable requirements of the Guide ■ Complete the retention and use of the Servicing Agent by the Servicer within such time as specified by Freddie Mac ■ Be responsible for all expenses and costs incurred with respect to the Servicing Agent Whether the Servicing Contract and related Servicing Contract Rights are terminated or involve the engagement of a Servicing Agent, the Servicer remains fully liable to Freddie Mac for all Servicing representations and warranties as detailed in Section 8102.1. Freddie Mac’s election of a remedy under this section does not waive its right to elect any other remedy or combination of remedies, including termination of all or a portion of the Servicing Contract and related Servicing Contract Rights. The Transferee Servicer’s assumption of responsibilities, representations and warranties upon a Transfer of Servicing does not release the Transferor Servicer of its responsibilities, representations and warranties with respect to the transferred Mortgages. (i) Termination with cause Freddie Mac may terminate all or any portion of the Servicing Contract and related Servicing Contract Rights by the Servicer at any time with cause for any of the reasons cited in Section 2301.1(b) regarding disqualification and/or suspension. Sections 2301.1(c) through 2301.3 govern the notice of termination of the Servicing Contract and related Servicing Contract Rights with cause, along with the Servicer’s opportunity to appeal, if applicable. Termination of the Servicing Contract and related Servicing Contract Rights with cause is a basis for immediate disqualification or suspension as a Seller/Servicer. A Transfer of Servicing with cause does not relieve the Servicer of any of its obligations under the Purchase Documents with respect to the Mortgages related to such Transfer of Servicing.

(A) Servicer compensation/Freddie Mac reimbursement Upon termination of the Servicing Contract and related Servicing Contract Rights with cause, the Servicer will have no right to: ■ Service the applicable Mortgages for Freddie Mac ■ Receive any compensation for performing such Servicing ■ Be paid a Termination Fee, as detailed in Section 3603.1(a)(ii)(B) below If the Servicing Contract and related Servicing Contract Rights are terminated with cause and Freddie Mac appoints a Transferee Servicer, Freddie Mac is entitled to reimbursement from the former Servicer for any loss, damage or expense incident to the Transfer of Servicing. Such expenses include, but are not limited to: ■ Court costs ■ Reasonable attorney fees ■ Copying costs ■ Costs of the physical transfer of files ■ Cost of an audit or examination of the Servicer’s records, if Freddie Mac determines that such a procedure is appropriate (“transfer-related expenses”)

(C) Other requirements The transfer requirements in Section 3603.2(a), documentation and records requirements in Section 3603.3(a) and remittance to Freddie Mac requirements in Section 3603.3(b) apply to the termination of the Servicing Contract and related Servicing Contract Rights without cause. Notwithstanding Sections 2301.1(c) through 2301.3, Freddie Mac’s decision to suspend or disqualify a Seller without cause or to terminate the Servicing Contract and related Servicing Contract Rights without cause is conclusive. (iii)Extinguishment of rights in Collateral related to Conveyance or Financing This Section 3603.1(a)(iii) solely addresses the extinguishment of rights in Collateral related to Conveyance or Financing. Capitalized terms in this Section 3603.1(a)(iii) correspond with meanings set forth in the Glossary except as otherwise defined in the following exhibits: ■ Exhibit 33A, Acknowledgement Agreement Incorporated Provisions ■ Exhibit 33B, Acknowledgement Agreement (Syndication) Incorporated Provisions ■ Exhibit 33C, Acknowledgement Agreement (Cashflow) Incorporated Provisions, or ■ Exhibit 33D, Acknowledgement Agreement (Combination) Incorporated Provisions Upon Termination With Cause or Without Cause, any prior approval by Freddie Mac of a Conveyance related to Financing—whether characterized as a pledge of the Servicing Contract Rights or for tax/accounting purposes as a “sale” of cash flow from such Rights—is automatically terminated without the need for further action by any person and does not survive such termination. Upon a Termination With Cause or a Termination Without Cause, the Financing’s lender/cashflow “buyer” has no further right, title or interest whatsoever in the Collateral, with the sole exception of any interest in the Termination Fee or Surplus Proceeds, if any, and, as applicable, all such rights having been conclusively extinguished. (b) Termination of the Servicing Contract and related Servicing Contract Rights related to sale of Mortgages by Freddie Mac If Freddie Mac sells Mortgages it has purchased pursuant to the Purchase Documents (see Section 1201.7), Freddie Mac will notify the Servicer upon receipt of an accepted bid and at least 30 days before the scheduled closing of the purchase. If the acquirer of such Mortgages does not require Freddie Mac to engage in a transfer of the Servicing to a Transferee Servicer in connection with the sale of the Mortgages: ■ The Servicer will continue to service the Mortgages on behalf of the acquirer, and ■ Freddie Mac will not pay the Servicer any compensation in connection with the Mortgage sale or any servicing compensation for such Servicing that occurs on or after the date of such sale If, however, Servicing is transferred to a Transferee Servicer, then Freddie Mac will pay the Servicer a Termination Fee that will be calculated in accordance with the requirements for calculation of the Termination Fee when the Servicing Contract and related Servicing Contract Rights are terminated without cause as described in Section 3603.1(a)(ii) above. The requirements of Sections 3603.2(a), 3603.3(a) and 3603.3(b) apply to a Transfer of Servicing related to the sale of Mortgages by Freddie Mac.