Freddie Mac Single-Family Seller/Servicer Guide Section 8103.1 — Servicer fiscal responsibilities

Freddie Mac Single-Family Seller/Servicer Guide Section 8103.1 — Servicer fiscal responsibilities

8103.1: Servicer fiscal responsibilities (07/09/25) This section contains requirements related to: ■ Balance sheet and financial statements ■ Mortgage Servicing Rights (a) Balance sheet and financial statements The Servicer must prepare its balance sheet and other financial statements that clearly reflect the sale of Mortgages to Freddie Mac as a sale of assets. This is required in addition to the file identification and marking of accounting records required elsewhere in this Guide. (b) Mortgage Servicing Rights Each Servicer acknowledges and agrees that any reference to a “mortgage servicing right” or “MSR” in its books and records or in any other third-party contract related to the Servicing of Freddie Mac-owned Mortgages and/or related to the compensation Freddie Mac pays or may pay in the future to such Servicer (i.e., in the form of a Servicing Spread) is in fact a short- hand reference for the term “Servicing Contract Right”. Although some participants in the mortgage industry refer to MSRs and mortgage servicing rights, initially used as accounting terms, instead of the more appropriate and complete term “Servicing Contract Rights”, for precision, Freddie Mac generally, and the provisions of our Purchase Documents, will continue to use the term “Servicing Contract Rights”. Notwithstanding any extra-contractual meanings associated with the terms “MSR” and “mortgage servicing rights”, the terms “MSR” and “Mortgage Servicing Rights” (and any references to ownership thereof by any Servicer): (i) are for convenience purposes only as a result of industry and accounting convention (e.g., pursuant to generally accepted accounting principles), and (ii) in fact refer to Servicing Contract Rights (1) that are conditional in nature (e.g., may be terminated in whole or in part by Freddie Mac in its unfettered discretion) and (2) are not owned by the Servicer, but rather with respect to which a Servicer may have rights sufficient to satisfy UCC § 9-203(b)(2). Freddie Mac Single-Family Seller/Servicer Guide Chapter 8103 As of 12/17/25 Page 8103-2 8103.2: Mortgage accounting records, methods and accounting with respect to delinquency relief (07/09/25) This section contains requirements related to: ■ Mortgage accounting records ■ Accounting methods ■ Accounting with respect to delinquency relief (a) Mortgage accounting records (i) Permanent records The Servicer must maintain permanent Mortgage accounting records for each Mortgage sold to Freddie Mac. The records must contain the complete Freddie Mac nine-digit loan number assigned to the Mortgage. (ii) Accounting system Freddie Mac requires that the Servicer’s Mortgage accounting system be able to produce an account transcript for each Mortgage, itemizing the following in chronological order: 1. The date, amount and breakdown of principal, interest and Negative Amortization of each payment 2. The date to which interest is paid 3. The date, amount and nature of each disbursement, advance, adjustment or other transactions affecting the amounts due from or to the Borrower 4. The date, amount and nature of each disbursement, advance, adjustment or other transaction affecting the amounts due from or to the Borrower The system must also be capable of providing: ■ The current outstanding principal balance and Negative Amortization of the Mortgage ■ The current Escrow (impound) balance ■ Disclosure of any insufficiency in Escrow balances for a Mortgage (iii) Accounting principles Freddie Mac Single-Family Seller/Servicer Guide Chapter 8103 As of 12/17/25 Page 8103-3 The Servicer must maintain the accounts and records for Freddie Mac-owned Mortgages according to sound and generally accepted accounting principles in a manner that permits Freddie Mac’s representatives or designees to examine and audit these accounts and records at any time. (b) Accounting methods (i) Amortization method The Servicer must use the amortization method of individual loan accounting, with interest calculated in arrears, for each Mortgage it services for Freddie Mac. Under this method, an individual Mortgage payment is applied to interest and principal by first calculating the interest portion and then applying the balance of the payment as a principal reduction. Below is information related to the interest calculation method: (A) Interest calculation method Unless otherwise specifically required by law, the interest portion of the payment must be determined by computing one full month’s interest on the outstanding principal balance (see Exhibit 62, Interest Calculation: Amortization Method – Full Month’s Interest) regardless of the day on which the payment is actually received. To determine the interest due for the month, multiply the outstanding principal balance by the interest rate of the Mortgage and divide by 12. Factors used for interest calculations must be carried to at least six decimal places, then rounded to the nearest decimal place based on the third digit. After applying the interest portion of the payment, the remainder is applied to principal. The Fannie Mae/Freddie Mac Uniform Instruments provide for this amortization method, unless the law of the State where the Mortgaged Premises is located specifically requires a different method. If applicable law specifically requires a different method, the Servicer must so notify Freddie Mac (see Directory 7) in writing before remitting payments to Freddie Mac. When computations involve multiple installments, such as several delinquent installments, the interest from each may be computed using the same principal balance (Exhibit 63, Interest Calculation: Amortization Method – Multiple Installments on Same Principal Balance). The amount to be applied to interest from each installment also may be calculated in succession, using the principal balance remaining after the previous calculation and principal application (Exhibit 64, Interest Calculation: Amortization Method - Multiple Installments on Respective Principal Balances). Similarly, a method that strictly applies payments according to a predetermined amortization schedule is also acceptable. (B) Payment calculation for Initial InterestSM Mortgages Freddie Mac Single-Family Seller/Servicer Guide Chapter 8103 As of 12/17/25 Page 8103-4 For Initial Interest Mortgages, the monthly payment will be interest-only followed by fully amortizing principal and interest payments beginning on the First Amortizing Payment Date. For Initial Interest Mortgages, Servicers must have the ability to produce monthly payment statements for Borrowers. In addition, for Initial Interest 3/1, 5/1 and 7/1 10-year Interest Only Period ARMs, Servicers must be able to track the first Interest Change Date and the First Amortizing Payment Date separately. (ii) Interest calculations involving a period of less than one month For interest calculations involving a period of less than one month (e.g., Mortgages paid in full or third-party sales), the amount of interest must be based on actual days and a 365-day year. (iii) Interest-in-advance Freddie Mac does not permit the use of the prepaid interest or interest-in-advance methods on Mortgages purchased. Any Servicer using the interest-in-advance method must convert to the interest-in-arrears method for Mortgages purchased by Freddie Mac before delivering the Mortgages to Freddie Mac. (c) Accounting with respect to delinquency relief Freddie Mac’s Servicing requirements regarding delinquency relief are described in Chapter 9203. These sections should be read in conjunction with the accounting requirements in this section. When delinquency relief has been granted, the Servicer must apply funds collected from the Borrower according to the governing Note or repayment agreement. Regardless of cash collected from the Borrower, the Servicer must report to Freddie Mac in accordance with the net yield reporting concept. Freddie Mac will receive its proportionate share of principal collections and the Accounting Net Yield interest for the monthly reporting period.

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