Freddie Mac Single-Family Seller/Servicer Guide 8601.6 — Property preservation, title management and lien considerations

Freddie Mac Single-Family Seller/Servicer Guide 8601.6 — Property preservation, title management and lien considerations

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

The brown font text used throughout this chapter denotes the special requirements for Servicing Senior Subordinate Mortgages. Text in black or green font denotes general Servicing requirements that also apply elsewhere in the Guide. This section contains requirements related to: ■ Preserving the Mortgaged Premises ■ Expenses that may become First Liens on the Mortgaged Premises ■ Delivery of clear and marketable title ■ Vesting the title and avoiding transfer taxes (a) Preserving the Mortgaged Premises The Servicer must comply with the requirements of Section 9301.6(d) except that, with respect to Senior Subordinate Mortgages, either the Servicer or the Senior Subordinate Trust would be the mortgagee, not Freddie Mac. (b) Expenses that may become First Liens on the Mortgaged Premises With respect to the Servicing of Senior Subordinate Mortgages, the Servicer must protect the Senior Subordinate Trust’s interest in the property and its First Lien Position to the same extent that it is obligated under Section 9301.6(e), with respect to Freddie Mac-Owned or Guaranteed Mortgages to protect “Freddie Mac’s interest in the property” and “Freddie Mac’s First Lien Position.” (c) Delivery of clear and marketable title This subsection has been adapted from Section 9301.10(b) to reflect special Servicing requirements for Senior Subordinate Mortgages. (i) Property located in a State without a redemption or confirmation period When the Servicer is the purchaser of the property at a foreclosure sale, it must ensure that the foreclosure counsel provides the Senior Subordinate Trust with clear and marketable title to the property after the foreclosure sale. The title must be free of any liens, claims, defects and encumbrances. The title must be marketable so Freddie Mac can sell the property freely to others on behalf of the Senior Subordinate Trust. The Servicer must instruct the foreclosure counsel to: 1. Submit the foreclosure deed for recordation within one Business Day after receipt of the deed 2. Obtain the recorder’s receipt as evidence that the deed was presented for recordation 3. Send the Servicer the recorder’s receipt within three Business Days after receiving it from the recorder 4. Provide the recorded deed to the Servicer within three Business Days after receiving the deed from the recorder’s office. The Servicer must retain the deed in the Mortgage file. (ii) Property located in a State with a redemption or confirmation period After the redemption period has expired or the foreclosure sale has been confirmed, the Servicer must ensure that clear and marketable title is obtained as stated in this Section 8601.6(c). (iii) Executing documents If Freddie Mac or the Senior Subordinate Trust needs to execute a document for the Servicer to process the foreclosure or execute a document related to a foreclosure sale, the Servicer must submit Form 105, Multipurpose Loan Servicing Transmittal, to Freddie Mac (see Directory 5) with all supporting documentation, which may include, but is not limited to, the last recorded document in the chain of title, and include the document Freddie Mac or the Senior Subordinate Trust needs to execute. (d) Vesting the title and avoiding transfer taxes This subsection has been adapted from Section 9301.10(c) to reflect special Servicing requirements for Senior Subordinate Mortgages. After the foreclosure sale, or when closing a deed-in-lieu of foreclosure transaction, the Servicer must ensure that title to the foreclosed property purchased by the Senior Subordinate Trust is vested to the appropriate party. (See Section 9209.6 regarding closing, reporting and remittance requirements for a deed-in-lieu of foreclosure transaction.) (i) Conventional Mortgages After the foreclosure sale, or when closing a deed-in-lieu of foreclosure transaction, the Servicer must ensure that title to the foreclosed property is vested in the legal name of the Senior Subordinate Trust if the property is not purchased by a third party. The property may not at any time vest in the Servicer’s or Freddie Mac’s name, even when doing so would provide additional benefits to the Senior Subordinate Trust. Freddie Mac will not reimburse the Servicer for any transfer taxes unless: ■ Local authorities require the Servicer to pay the transfer tax to record a deed and ensure that title vests appropriately ■ The transfer tax is paid under protest ■ The Servicer submits the request for written pre-approval for reimbursement of the transfer tax via PAID (Payments Automated Intelligent and Dynamic) (see Exhibit 88, Servicing Tools) (see Section 9701.4(a)); and ■ Counsel could not process the foreclosure and/or deed-in-lieu of foreclosure transaction in a manner that would successfully avoid the imposition of the transfer tax obligation Servicers will not be reimbursed for transfer taxes if any of the above conditions and requirements do not exist or are not met. If the foreclosure involves a Manufactured Home in a certificate of title State, the Servicer must conduct the replevin or other legal action necessary to repossess the home in the Servicer’s name and have the new certificate of title issued in the Senior Subordinate Trust’s name. (ii) Mortgages insured by the FHA or guaranteed by the VA or RHS The Servicer must follow FHA and VA or RHS guidelines for conveying title to the foreclosed property to the applicable agency.

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