Freddie Mac Single-Family Seller/Servicer Guide 7101.2 — Reviews by Freddie Mac, Transferor Servicer and Transferee Servicer, additional conditions of approval

This section contains requirements related to: ■ Freddie Mac review ■ Transferor Servicer review ■ Transferee Servicer review ■ Additional conditions of approval for Transfers of Servicing

(a) Freddie Mac review Freddie Mac will work with the Transferor Servicer and Transferee Servicer to approve a Transfer of Servicing but reserves the right to approve with conditions. Freddie Mac is not obligated to approve a Transfer of Servicing. Freddie Mac will not approve a proposed Transfer of Servicing if Freddie Mac, in the exercise of its judgment and in its sole discretion, determines that such a transfer is not in the best interests of Freddie Mac or: ■ The Transferor Servicer or Transferee Servicer will not be able to adequately service the Mortgages and/or REO or meet the obligations under their respective Servicing Contracts ■ The Final Mortgage List includes Mortgages that are 90 days or more delinquent or have been previously modified. Servicers who wish to transfer the Servicing Contract Rights related to Mortgages that are delinquent for 90 days or more or have been previously modified must do so in accordance with the Voluntary Partial Cancellation process outlined in Chapter 7102 The Transferor Servicer and Transferee Servicer must be approved Seller/Servicers and must be in compliance with all the requirements of the Purchase Documents. When reviewing a Transfer of Servicing request, Freddie Mac will review both the Transferor Servicer and the Transferee Servicer. Transferor Servicers and Transferee Servicers must not be subject to any situations prohibited under disqualification or suspension of the Seller or the Servicer in Section 2301.1(b) unless approved by Freddie Mac. The review will focus on, but not be limited to: ■ Financial capacity to honor contractual obligations ■ Existence of any outstanding obligations (such as repurchases) ■ Delinquency and REO ratios ■ Delinquency reporting ■ The Transferee Servicer’s and Transferor Servicer’s performance results on their respective Servicer Success Scorecards Freddie Mac’s review of the Transfer of Servicing request may take additional time if either the Transferor Servicer or Transferee Servicer is subject to any situations prohibited under Section 2301.1(b) or the Purchase Documents reflect negotiated terms, including the sale of Mortgages to Freddie Mac with recourse.

(b) Transferor Servicer review The Transferor Servicer must participate with the Transferee Servicer with respect to the Transferee Servicer’s due diligence review on the Mortgages related to the Transfer of Servicing, Custodial Accounts, obligations under the Purchase Documents and any alternative to foreclosure and provide to the Transferee Servicer any missing data, documents or other information necessary for the Transferee Servicer to perform its obligations under the Guide and applicable Purchase Documents and in accordance with the terms of the Mortgage and applicable alternatives to foreclosure. Upon request, the Transferor Servicer must provide the post-transfer review results to Freddie Mac.

(c) Transferee Servicer review The Transferee Servicer must perform a due diligence review on the Mortgages related to the Transfer of Servicing and on Custodial Accounts and must be aware of any obligations of the Transferor Servicer under the Purchase Documents that the Transferee is assuming (e.g., payoff remittance requirements) and any alternative to foreclosure, whether offered and outstanding or currently in place with a Borrower. The Transferee Servicer’s due diligence efforts should include, but are not limited to, a review of the following information that the Transferor Servicer may provide: ■ Reports and data that confirm and support information provided by the Transferor Servicer ■ Pertinent reports prepared by internal or external auditors, including any recently completed Freddie Mac audit Upon request, the Transferee Servicer must provide the post-transfer review results to Freddie Mac. The Transferor Servicer may not provide a copy of its Servicer Success Scorecard to the Transferee Servicer without Freddie Mac’s prior written approval.

(d) Additional conditions of approval for Transfers of Servicing Transferor Servicer and Transferee Servicer each represent and warrant to Freddie Mac that it has met the requirements in this section for Mortgages related to a Transfer of Servicing, and each agrees and acknowledges that Freddie Mac’s approval of a Transfer of Servicing is conditioned upon such representations and warranties. (i) Mortgage insurance coverage The Transfer of Servicing must comply with the requirements of each MI that insures any of the Mortgages. Before the Effective Date of Transfer, the Transferor Servicer must obtain a commitment from each MI to continue to provide coverage required by Freddie Mac for the benefit of the Transferee Servicer. If an MI will not continue such coverage, the Transferor Servicer must obtain a written commitment by another MI to provide equivalent coverage. (ii) Special requirements for Mortgages related to a Transfer of Servicing No Mortgage subject to the Transfer of Servicing may be subject to: ■ A prohibition on its Transfer of Servicing in the Purchase Documents (for instance, in a term of business) or as a condition of purchase or otherwise ■ An outstanding requirement to be met by the Transferor Servicer prior to the Effective Date of Transfer, such as, for instance: ❑ GreenCHOICE Mortgages® with eligible improvements as described in Section 4606.1(b) that are not complete. (See Section 4606.5 for Transfers of Servicing involving GreenCHOICE Mortgages.) ❑ For Subsequent Transfers of Servicing, CHOICERenovation® Mortgages with eligible renovations as described in Section 4607.6 that are not complete. (See Section 4607.17 for Transfers of Servicing involving CHOICERenovation Mortgages.) ❑ For Concurrent Transfers of Servicing, CHOICERenovation Mortgages delivered pursuant to Section 4607.1(b) where Freddie Mac’s prior written approval has not been obtained pursuant to Section 4607.17 ❑ For Concurrent Transfers of Servicing, CHOICEReno eXPress® Mortgages with renovations that are not complete Additional requirements apply to certain Mortgages and Mortgage types. ■ To include the Servicing Contract Rights related to a Mortgage represented by an LNA in a Transfer of Servicing, the Transferor Servicer must obtain Freddie Mac’s prior approval using the procedure for Servicer responsibilities related to document custody set forth in Section 8107.1 and must identify each such Mortgage to the Transferee Servicer and Transferee Servicer’s Document Custodian ■ eMortgages (as defined in Section 1402.1(b)) must at all times be serviced by an approved Servicer of eMortgages for Freddie Mac or its Servicing Agent pursuant to Section 1402.5(a)(i) (iii) Additional delivery data for Concurrent Transfers of Servicing For Concurrent Transfers of Servicing, additional Mortgage delivery data required by Form 960, Agreement for Concurrent Transfer of Servicing of Single-Family Mortgages, and Chapter 7101 must be submitted by: ■ The Transferor Servicer, if submitted at Mortgage delivery, or ■ The Transferee Servicer, if submitted after Mortgage delivery For the Transferee Servicer to submit the data after Mortgage delivery, the Transferor Servicer must obtain Freddie Mac's prior written approval and provide to the Transferee Servicer copies of the Mortgage file documents required for accurate data delivery. (iv) Mortgages in a Trial Period The Transferor Servicer must notify the Transferee Servicer if there are any Mortgages related to a Transfer of Servicing subject to a Trial Period Plan and must confirm that the Transferee Servicer will assume the additional responsibilities associated with these Mortgages. If the Transfer of Servicing involves Mortgages in a Trial Period or already subject to a modification, the Transferor Servicer must affirmatively indicate that in Servicing Transfer Manager (see Exhibit 88, Servicing Tools) and identify for each Mortgage the modification initiative on the Proposed Mortgage List and Final Mortgage List, as those terms are identified in Section 7101.1(b)(ii) (e.g., Home Affordable Modification ProgramSM (HAMP®), Freddie Mac Standard Modification, Freddie Mac Streamlined Modification, Freddie Mac Flex Modification®). (v) Modified Mortgages that have a step-rate provision or partial principal forbearance The Transferor Servicer must affirmatively indicate in Servicing Transfer Manager whether any Mortgages related to a Transfer of Servicing are modified Mortgages that have a step-rate provision (i.e., the interest rate is subject to incremental increases beginning in year 6 of the modification) or a partial principal forbearance. (vi) Mortgages modified electronically If any Mortgage related to a Transfer of Servicing has been modified electronically, as defined in Section 1401.3(h), the Transferor Servicer must affirmatively identify it in Servicing Transfer Manager (see Exhibit 88). See Section 9205.3(c) for requirements governing the HAMP eModification Agreement. (vii) Maintain financial eligibility requirements Prior to the Effective Date of Transfer, the Transferor Servicer must evaluate whether the proposed Transfer of Servicing will in any way impair its ability to demonstrate to Freddie Mac’s satisfaction that it has sufficient capitalization, profitability, liquidity and funding sources to support its ongoing operations and its commitments to Freddie Mac following the Transfer of Servicing. Transferee Servicer must conduct the same evaluation of itself. (viii) Mortgages subject to a Payment Deferral processed electronically If any Mortgage related to a Transfer of Servicing is subject to a Payment Deferral processed electronically, as defined in Section 1401.3(h), with an Electronic Payment Deferral Agreement, the Transferor Servicer must affirmatively identify it in Servicing Transfer Manager (see Exhibit 88).