Freddie Mac Single-Family Seller/Servicer Guide 9210.2 — Closing, reporting and remittance requirements for charge-offs

Freddie Mac Single-Family Seller/Servicer Guide 9210.2 — Closing, reporting and remittance requirements for charge-offs

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

This section contains information related to: ■ Lien release requirements ■ Reporting requirements ■ Settlement data submissions ■ Charging-off the Delinquency ■ Remittance requirements ■ Closing requirements ■ Requesting reimbursement (a) Lien release requirements If Freddie Mac instructs the Servicer not to complete a lien release as part of the approved charge-off request, upon receiving a request from a Freddie Mac-approved vendor (see Section 9601.1(a) for details on this process), the Servicer must prepare and submit all of the following documentation to the Freddie Mac-approved vendor: ■ Original Note ■ Original Security Instrument ■ A copy of the assignment of the Security Instrument to “Federal Home Loan Mortgage Corporation” sent to the local recorder’s office; and ■ A copy of the original loan application The Servicer must forward the recorded assignment to Freddie Mac (see Directory 5) when the Servicer has received it from the recorder’s office. When sending the documentation to a Freddie Mac-approved vendor, the Servicer must only send the items listed above, not entire Servicing file. In the event Freddie Mac approves a charge-off request and instructs the Servicer to release the lien on the property and cancel the Note, the Servicer must prepare and execute a satisfaction of Note and/or release of lien. For Cooperative Share Loans, the Servicer must also comply with the requirements in Section 8801.3(e). (b) Reporting requirements Within two Business Days of the workout approval reflected in Resolve®, following receipt of funds when a short payoff has been approved by Freddie Mac, the Servicer must: 1. Reinstate the Mortgage if it was inactivated; and 2. Report the Mortgage as a “Short Sale/Charge-off/Make-whole” in the Loan Level Reporting tool (see Exhibit 88, Servicing Tools) and ensure that the: ■ Ending gross UPB is zero ■ Principal due field is completed with the gross unpaid ending balance of the Mortgage ■ Payoff date is the workout approval date reflected in Resolve; and ■ DDLPI reflects the due date of the last fully paid installment If any of these data elements are incorrect, the Servicer should contact its investor reporting specialist or call Customer Service at 800-FREDDIE. (c) Settlement data submissions Following completion of the reporting and remittance requirements, Resolve will automatically settle the charge-off transaction. (d) Charging-off the Delinquency The amount that Freddie Mac has determined to be charged off will be reflected on the Draft Report. The Servicer must review the Draft Report and report any discrepancies between its records and the amount on the Draft Report to Freddie Mac via the Freddie Mac Servicing Data Corrections tool (see Exhibit 88) within the same Accounting Cycle in which Freddie Mac posts the amount to the Draft Report. Servicers may access the Draft Report through the Cash Manager tool (see Exhibit 88). When reporting a discrepancy, Servicers must input the calculation used to determine the variance and upload any documentation to support the request in the Servicing Data Corrections tool. Discrepancies submitted after the Accounting Cycle in which the initial adjustment is posted to the Draft Report closes will be processed at Freddie Mac’s discretion and may be subject to a contract noncompliance and contract change compensatory fee (see Section 8303.5(i)). If the postsettlement correction request is denied, the Servicer may be liable for any additional losses. (e) Remittance requirements Following completion of the reporting requirements in Section 9210.2(c) but no later than three Business Days after workout approval reflected in Resolve or following receipt of funds when a short-payoff has been approved by Freddie Mac, the Servicer must submit any proceeds received on a Mortgage that has an approved charge-off request via wire transfer or check to Freddie Mac (see Directory 5), regardless of whether the lien is released or not. (f) Closing requirements Within seven Business Days of the workout approval date reflected in Resolve, the Servicer must: 1. Notify the Borrower in writing that the Servicer will no longer service the Mortgage. The written notice must include: ■ Freddie Mac's nine-digit loan number and the Servicer's loan number ■ Information that either: ❑ The lien on the property is being released and the Note is being canceled; or ❑ The lien is not being released, the Note is not being canceled, the Mortgage is being assigned to Freddie Mac and the Borrower remains financially obligated to the Note and Security Instrument ■ Instructions that the Borrower remains responsible for paying property taxes and property insurance premiums and that such payments should be made directly to the taxing authority or insurer, even if the Mortgage had an Escrow account prior to the charge-off 2. If the Mortgage had an Escrow account prior to the charge-off, the Servicer must notify the local taxing authority in writing to send all tax bills directly to the Borrower (g) Requesting reimbursement In order for the Servicer to be reimbursed for charge-off related expenses, the charge-off must first be accepted and settled in Resolve. The Servicer must request reimbursement for any applicable expenses, in accordance with the requirements in Chapter 9701.

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