Freddie Mac Single-Family Seller/Servicer Guide 8304.1 — Managing Custodial Accounts and Freddie Mac’s rights

Freddie Mac Single-Family Seller/Servicer Guide 8304.1 — Managing Custodial Accounts and Freddie Mac’s rights

Effective 2025-09-10 · Freddie Mac's stamp for this section

This section contains requirements related to: ■ Managing custodial accounts ■ Freddie Mac’s rights ■ Servicer responsibilities related to Custodial Accounts (a) Managing custodial accounts A Custodial Account is a Demand Deposit Account or Interest-Bearing Deposit Account the Servicer must establish and maintain at an Eligible Depository for the safekeeping of funds associated with Freddie Mac-owned Mortgages. The Servicer must maintain Principal and Interest Payments and Escrow Funds in separate Custodial Accounts until Freddie Mac drafts monthly Principal and Interest Payments or loan payoffs or the Servicer remits funds to a third party. Only funds received in connection with the Servicing of Freddie Mac-owned Mortgages are to be deposited into the accounts. Note: Refer to Chapter 8302 for requirements on establishing Custodial Accounts and this chapter for requirements for administering and reconciling the cash in the Custodial Accounts. All Freddie Mac accounts must be reconciled within 45 days of the end of each Accounting Cycle. The Servicer must identify and fund any shortages within 90 days of the Accounting Cycle even if the variance has not been identified. However, Freddie Mac reserves the right to request that funding occur immediately. Managing Custodial Accounts completes the cycle of the Servicer’s investor accounting responsibilities. The Servicer must comply with Freddie Mac’s administrative and reconciliation requirements for Custodial Accounts. Sections 8304.1 through 8304.3 address administering Custodial Accounts, including Freddie Mac’s requirements for recordkeeping, investing funds, monitoring depository eligibility and conditions for changing or transferring Custodial Accounts. Section 8304.4 address reconciling Custodial Accounts, including Freddie Mac’s requirements for identifying and correcting differences between the Servicer’s records and Freddie Mac’s. (b) Freddie Mac’s rights Freddie Mac reserves the right to: ■ Draft funds directly from the designated Custodial Accounts at any time. To designate the appropriate Custodial Account and authorize Freddie Mac to draft monthly Principal and Interest Payments and payoff proceeds, Servicers must submit a completed, executed and duly authorized Form 1132A, Authorization for Automatic Transfer of Funds from a Principal and Interest Custodial Account Through the Automated Clearing House (ACH), in accordance with Section 8303.1(c). ■ For each Custodial Account, request that the Servicer provide information related to the designated deposit account, including, without limitation, account balance information, detailed account activities, bank statements and other information as Freddie Mac may request in its sole discretion (together, the “Account Information”). At Freddie Mac’s direction, the Servicer will provide the Account Information directly to Freddie Mac or through an approved third party without cost to Freddie Mac. ■ Assess compensatory fees and/or seek repayment of losses sustained due to errors, omission or delays by the Servicer in complying with the requirements of this chapter (c) Servicer responsibilities related to Custodial Accounts Servicers are responsible for properly reconciling and maintaining the Custodial Account(s) and maintaining accurate records and supporting documentation. Servicers are required to establish and reconcile Custodial Account(s) for each Seller/Servicer number. Servicers may not consolidate multiple Seller/Servicer numbers into a single reconciliation. The Servicer must, at all times, maintain records for each Custodial Account in which Freddie Mac has an interest that accurately reflect the following information: ■ Account designations in accordance with the requirements of Section 8302.1(c) ■ Account numbers ■ The amounts of Principal and Interest Payments and Escrow Funds deposited for each Mortgage ■ The dates on which funds were deposited ■ Supporting documentation of all deposits to and withdrawals from a Custodial Account ■ Freddie Mac’s vested and ascertainable interest in funds deposited into each Custodial Account

Source: Freddie Mac Single-Family Seller/Servicer Guide 8304.1 — Managing Custodial Accounts and Freddie Mac’s rights · source URL · snapshot 4c94f67729042dd6