Freddie Mac Single-Family Seller/Servicer Guide 4702.3 — Attorney opinion of title letter

This section contains information related to: ■ Issuer requirements ■ Attorney opinion of title letter requirements ■ Mortgages that are ineligible for delivery with an attorney opinion of title letter ■ Documentation and delivery requirements for an attorney opinion of title letter

(a) Issuer requirements Attorney must meet the following requirements to be acceptable issuer of attorney opinion of title letters: ■ Be licensed and in good standing to practice law in the jurisdiction where the Mortgaged Premises is located ■ Provide coverage for the “gap” period between closing of the Mortgage and recordation of the loan documents ■ Maintain professional liability insurance that meets the following requirements: ❑ Extends coverage against malpractice or errors and omissions in rendering opinions of title ❑ Maintains coverage amount that adequately accounts for the quantity and size of opinions rendered by the attorney and organization or law firm, without limits of liability for a single claim lower than the UPB of the Mortgaged Premises ❑ Extends coverage to all assignees and successors ❑ Extends coverage to the organization or law firm under which the attorney opinion of title letter is issued, in the event the attorney is no longer a member of the firm or organization ■ Provide current proof of acceptable professional liability coverage

(b) Attorney opinion of title letter requirements Freddie Mac will accept an attorney opinion of title letter in lieu of a title insurance policy if all the following conditions are satisfied. The attorney opinion of title letter must: Attorney opinion of title letter requirements Be addressed to the Seller and all successors in interest of the Seller Provide the following statement: “We [I] agree to indemnify you and your successors in interest in the [Mortgage] [deed of trust] opined hereto, to the full extent of any loss attributable to a breach of our [my] duty to exercise reasonable care and skill in the examination of the title and the giving of this opinion.” Be issued by an eligible attorney and organization as defined above State that the condition of title to the Mortgaged Premises is acceptable and the Mortgage constitutes a lien of the required priority on a fee simple estate in the property List all other liens as subordinate Include the following if the Mortgage is secured by a unit in a Condominium Project or Planned Unit Development (PUD): ■ There is no violation of any restrictive covenants that are in the Condominium Project or PUD constituent documents and restrict the use of the land ■ All dues applicable to the Mortgages Premises are current and not delinquent ■ No recorded right of first refusal to purchase the land was exercised or could have Attorney opinion of title letter requirements been exercised on or before the closing date of the Mortgage and the undersigned is unaware of the existence or the exercise of any right of first refusal on or before the closing date of the Mortgage For ARMs, if applicable, include the following: “The law of [the State in which the property securing the Mortgage is located] provides that (i) the lien of the Mortgage will not become invalid or unenforceable resulting from provisions in the Mortgage which provide for changes in the interest rate calculated pursuant to the formula provided in the Mortgage, and (ii) priority of the lien of the Mortgage for the UPB of the loan, together with interest as changed and other sums advanced by the Noteholder in accordance with the provisions of the Mortgage, will not be lost as a result of changes in the rate of interest calculated pursuant to the formula provided in the Mortgage.” Include an opinion on environmental protection liens that addresses the following: ■ That there are no environmental protection liens filed in the public records that have priority over the lien of the insured Mortgage ■ That there are no applicable State laws that provide that environmental liens filed after the date of the policy would have priority over the lien of the insured Mortgage. If there are such laws, the letter must expressly identify them as an exception. ■ May include an exception for possible subsequent superliens that could take priority over the Mortgage only if the Mortgaged Premises is located in a State whose State statutes provide for such a superlien Not take exception to survey matters; when the attorney’s opinion takes exception to survey matters, the Seller must provide whatever information is required by the attorney to remove the exception Not be subject to any title exceptions other than those permitted under Section 4702.4

(c) Mortgages that are ineligible for delivery with an attorney opinion of title letter An attorney opinion of title letter may not be delivered for Mortgages with the following characteristics: ■ Mortgaged Premises is located in a Tribal Area (as defined in Section 4504.2) ■ Mortgaged Premises is located in jurisdictions where an attorney opinion of title letter is prohibited by law ■ Mortgages secured by a dwelling on a leasehold estate, including leasehold estates on property owned by a Community Land Trust, and a property subject to a sublease(s) that survive(s) the extinguishment of the primary ground lease ■ Mortgages secured by Manufactured Homes ■ Mortgages executed using a power of attorney ■ CHOICERenovation® Mortgages ■ Construction to Permanent Mortgages ■ Cooperative Share Loans ■ GreenCHOICE Mortgages® ■ HeritageOne® Mortgages ■ Renovation Mortgages ■ Texas Equity Section 50(a)(6) Mortgages

(d) Documentation and delivery requirements for an attorney opinion of title letter The Seller must deliver Investor Feature Identifier (IFI) “J18” when delivering a Mortgage that uses an attorney opinion of title letter in lieu of a title insurance policy or Iowa certificate of title. This is in addition to any other IFIs that may apply. The Seller must include and maintain the following in the Mortgage file: ■ A copy of the attorney opinion of title letter ■ Proof of acceptable professional liability coverage ■ Current claim filing instructions Note: See Section 6302.47 for delivery requirements for each Mortgage delivered with an attorney opinion of title letter in lieu of a title insurance policy.