Freddie Mac Single-Family Seller/Servicer Guide 5103.6 — Land Trust

This section contains information related to: ■ General eligibility requirements ■ Required Uniform Instrument signatures ■ Special documentation: Collateral Assignment of Beneficial Interest (“Collateral Assignment”) ■ Title and title insurance requirements ■ Mortgage file documentation requirements Freddie Mac will purchase Land Trust Mortgages under the terms of this section and all other requirements of the Guide.

(a) General eligibility requirements (i) Location of Mortgaged Premises The Mortgaged Premises must be located in a State that recognizes and permits the use of Land Trusts by statute. (ii) Beneficiary of a Land Trust At least one beneficiary of the Land Trust must be a Borrower. Each beneficiary who is a Borrower must be fully underwritten and a qualified Borrower in the beneficiary’s individual capacity. A beneficiary of the Land Trust Mortgage who is a Borrower must be deemed to be an owner of the property/Mortgaged Premises. (iii) Trust requirements All beneficiaries of the Land Trust must be individuals. The trustee of the Land Trust must be a corporation or financial institution customarily engaged in the business of acting as trustee for land trusts in the applicable jurisdiction. The Mortgaged Premises must be the only asset of the Land Trust. (iv) Property type and occupancy requirements Each Land Trust Mortgage must be secured by one of the following: ■ A 1- to 4-unit Primary Residence occupied by a beneficiary of the Land Trust who is a Borrower ■ A second home occupied for some portion of the year by a beneficiary of the Land Trust who is a Borrower, or ■ A 1- to 4-unit Investment Property, provided at least one beneficiary of the Land Trust is a Borrower

(b) Required Uniform Instrument signatures (i) Form of signature for Note Each beneficiary of a Land Trust who is a Borrower must sign the Note in their individual capacity. (ii) Signature required on Security Instrument The trustee of the Land Trust must execute the Security Instrument. Note: See Section 4101.6 for additional Note and Security Instrument signature requirements.

(c) Special documentation: Collateral Assignment of Beneficial Interest (“Collateral Assignment”) (i) Collateral Assignment requirements Each beneficiary of the Land Trust who is a Borrower must execute a Collateral Assignment under which the beneficiary: ■ Grants the lender named in the Security Instrument and the Note and the lender’s successors and assigns (the “Lender”) a security interest in the following (collectively, the “Collateral”): ❑ All of the beneficiary’s rights, title, powers and interests in, under and to the Land Trust ❑ The property held in the Land Trust (including any rights to earnings or proceeds from that property), and ❑ The Land Trust agreement (including any powers of direction or control over the trustee of the Land Trust or the property) ■ Certifies that no prior security interest in the Collateral has been granted ■ Agrees not to make any further assignment or take any other action by which all or any part of the Collateral is transferred in any way without the written approval of the Lender; and ■ Agrees that the Collateral Assignment is for collateral security only, no liability under the Land Trust agreement accrues to the Lender by virtue of the Collateral Assignment, and signing the Collateral Agreement does not relieve the beneficiary of any responsibility or liability under the Land Trust agreement (ii) Collateral Assignment signatures requirements The Collateral Assignment must be signed by the appropriate parties as follows: ■ Each beneficiary of the Land Trust who is a Borrower must individually execute the Collateral Assignment ■ The lender named in the Security Instrument and the Note in whose favor the beneficiary of the Land Trust grants a security interest under the Collateral Assignment (the “Assignee”) must accept the Collateral Assignment ■ The trustee of the Land Trust must receive and agree to, endorse and/or acknowledge, as appropriate in the applicable jurisdiction, the Collateral Assignment (iii)Collateral Assignment form (A) Sample Illinois Collateral Assignment form Form 50, Collateral Assignment of Beneficial Interest in Land Trust, is a sample form of Collateral Assignment for Land Trust Mortgages secured by Mortgaged Premises located in Illinois. The Seller may use: ■ Freddie Mac’s form for Land Trust Mortgages secured by Mortgaged Premises located in Illinois, or ■ An alternative form that meets Illinois requirements (B) Collateral Assignment forms for use in other jurisdictions For Land Trust Mortgages secured by property located in jurisdictions other than Illinois, the Seller must use a form of Collateral Assignment that reflects the requirements of the jurisdiction in which the Mortgaged Premises is located (unless the Seller determines that the use of Form 50 is appropriate for the specific jurisdiction). (iv) Collateral Assignment representations and warranties The Seller represents and warrants that the Collateral Assignment is: ■ Appropriately executed by each beneficiary of the Land Trust who is a Borrower ■ Accepted by the lender named in the Security Instrument and the Note in whose favor the beneficiary of the Land Trust grants a security interest under the Collateral Assignment (the “Assignee”) ■ Appropriately received and agreed to, endorsed and/or acknowledged, as appropriate in the applicable jurisdiction, by the trustee of the Land Trust ■ Valid, enforceable and meets the provisions of the applicable jurisdiction, including relevant statutes, regulations and judicial decisions if the Land Trust Mortgage is secured by Mortgaged Premises located in a jurisdiction other than Illinois or by Mortgaged Premises located in Illinois and the Seller uses a form of Collateral Assignment other than Form 50.

(d) Title and title insurance requirements The Land Trust Mortgage must constitute a valid First Lien. The Land Trust Mortgage must be covered by a title insurance policy that meets the requirements of Chapter 4702.

(e) Mortgage file documentation requirements In addition to other requirements in the Purchase Documents, for Land Trust Mortgages, the Mortgage file also must contain: ■ Copy of Land Trust agreement: A copy of the original Land Trust agreement or an abstract if required by the jurisdiction ■ Documentation of power of direction: Documentation evidencing that the beneficiary(ies) of the Land Trust holding the power of direction as provided in the trust documents have authorized and directed the trustee of the trust to execute the Mortgage documents. If the trust documents require more than one beneficiary holding the power of direction to so authorize and direct the trustee, then the documentation must evidence that the requisite number of beneficiaries have so directed the trustee; and ■ Collateral Assignment: A fully executed or certified copy of Collateral Assignment, as described below for the applicable jurisdiction. A “Fully Executed Collateral Assignment” is the original Collateral Assignment executed by each beneficiary of the Land Trust who is a Borrower in that beneficiary’s individual capacity, accepted by the lender named in the Security Instrument and the Note in whose favor the beneficiary of the Land Trust grants a security interest under the Collateral Assignment (the “Assignee”), and received and agreed to or endorsed and/or acknowledged by the trustee. A “Certified Copy of Collateral Assignment” is a copy, certified by the trustee as a true and complete copy, of the Fully Executed Collateral Assignment. ❑ Mortgaged Premises located in Illinois: For Mortgaged Premises located in Illinois, the Mortgage file also must contain: ■ Certified Copy of Collateral Assignment: A Certified Copy of Collateral Assignment. The Seller must ensure that the Fully Executed Collateral Assignment can be obtained from the trustee upon request by a Seller/Servicer and/or by Freddie Mac. ■ Facsimile Assignment of Beneficial Interest: Facsimile Assignment of Beneficial Interest If… Then… ■ An Illinois jurisdiction requires recording of a facsimile assignment of beneficial interest (or similar document) (“facsimile”), and ■ Until the trustee is provided with the recorded facsimile, the trustee will not receive and agree to and/or endorse and/or acknowledge the Collateral Assignment executed by each beneficiary of the Land Trust who is a Borrower in that beneficiary’s individual capacity and accepted by the Assignee ■ The Seller may retain in the Mortgage file copies of the executed and accepted Collateral Assignment and the facsimile sent for recording, provided that the Seller also retains in the Mortgage file a letter of intent confirming that the Seller will: ❑ Obtain the trustee receipt and agreement/endorsement/ acknowledgement upon receipt of the recorded facsimile, and ❑ Place the Certified Copy of Collateral Assignment in the Mortgage file ❑ Mortgaged Premises located in a State other than Illinois: For Mortgaged Premises located in any other State that by statute recognizes and permits the use of Land Trusts, the Fully Executed Collateral Assignment is required