Freddie Mac Single-Family Seller/Servicer Guide 8301.4 — Loan-level transaction, accounting cycle, cash float, service bureau liability and change notification,

Freddie Mac Single-Family Seller/Servicer Guide 8301.4 — Loan-level transaction, accounting cycle, cash float, service bureau liability and change notification,

Custodial Accounts and required Servicer advances (08/13/25) This section contains requirements related to: ■ Loan-level transactions ■ Accounting cycle ■ Cash float ■ Service bureau liability and notice of change of service bureau ■ Administering Custodial Accounts ■ Custodial Account reconciliation basics ■ Servicer advances required (a) Loan-level transactions The term loan-level transaction refers to the required monthly and exception or liquidation reporting of all activity that occurs during each Accounting Cycle for each Mortgage serviced for Freddie Mac. Freddie Mac considers a loan-level transaction to be reported when it has been transmitted by the Servicer without errors and received by Freddie Mac. Daily reporting is encouraged but not required. Servicers must submit a loan-level transaction for each Mortgage serviced for Freddie Mac no later than 2:00 a.m. Eastern Time on the day following the P&I Determination Date. Servicers are required to report loan-level activity from purchase date to liquidation. Refer to Exhibit 60, Loan-Level Reporting Data Description. Refer to Section 8303.1(a) for the definition of exception (or liquidation) activity. (b) Accounting Cycle The Accounting Cycle will be the first day of the calendar month through the last day of the calendar month. Servicer reporting for the Accounting Cycle must be completed no later than the last day of the calendar month plus one Business Day. (c) Cash float Freddie Mac does not draft monthly principal and interest until the P&I Draft Date. The Servicer may earn interest on the cash float of funds it deposits into the Custodial Accounts. Refer to Section 8304.2(a) for Freddie Mac’s requirements regarding the investment of funds in the Custodial Accounts. (d) Service bureau liability and notice of change of service bureau If the Servicer uses a service bureau for data processing, the Servicer remains responsible for all obligations to Freddie Mac under the Purchase Documents (see Section 8102.1(e)). The Servicer must pay any noncompliance compensatory fees, even though it may be the Servicer’s service bureau’s error that causes the noncompliance. Servicers that elect to use a service bureau to report activity on Mortgages serviced for Freddie Mac acknowledge and agree that Freddie Mac will send reports, data and information on these Mortgages that will include, but not be limited to, the daily Business-toBusiness Response File and the Business-to-Business Draft File to the Servicer’s service bureau. If a Servicer changes its service bureau or begins to use a new service bureau for data reporting or would like Freddie Mac to send these files to a specific service bureau, it must notify Freddie Mac at least 45 days prior to the effective date of the change. The Servicer must provide this notification via e-mail ([email protected]) and include the Seller/Servicer number(s), point of contact, phone number, current and future service bureau with its contact information and effective date of the change. Servicers acknowledge that the notification of a change of service bureau is necessary for Freddie Mac to provide reports, edits and feedback to the correct service bureau. (e) Administering Custodial Accounts The Servicer is responsible for administering Custodial Accounts to safeguard funds due to Freddie Mac. In addition, the Servicer must ensure that each account is adequately funded and reconciled monthly. Refer to Chapter 8302 for requirements on establishing Custodial Accounts and to Chapter 8304 for requirements on administering and reconciling the cash in the Custodial Accounts. (f) Custodial Account reconciliation basics The Servicer must reconcile all Custodial Accounts monthly as of the end of the Accounting Cycle. A Custodial Account reconciliation compares the funds on deposit as of the end of the Accounting Cycle to the total liability as of the same date. Any differences between any two parts of the investor accounting process may cause a Custodial Account to be out of balance. Refer to Chapter 8304 for Freddie Mac’s requirements. (g) Servicer advances required The Servicer must advance its funds into the Principal and Interest Custodial Account if: ■ There are insufficient funds to cover the draft amount due to Freddie Mac ■ The Servicer is completing a Mortgage repurchase ■ The Servicer has an unidentified and unresolved variance on the Custodial Account reconciliation resulting in the account being underfunded (see Chapter 8304) The Servicer: ■ Must make any advances for funds due to Freddie Mac prior to the P&I Draft Date and/or the applicable Payoff Draft Date ■ Must make a deposit advanced from its funds into the Escrow Custodial Account whenever a deficiency occurs in an individual Escrow account ■ Must not use the Escrow collections from one Mortgage to offset the deficiency of another ■ May not carry a negative balance in either the Principal and Interest Custodial Account or the Escrow Custodial Account even if permitted by its depository institution The Servicer may reimburse itself for: ■ Advances of Principal and Interest Payments upon subsequent receipt of any Principal and Interest Payments ■ Advances of Escrow from Escrow Funds received for the Mortgage for which the Servicer made the advance

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