Freddie Mac Single-Family Seller/Servicer Guide 9501.4 — Firm training requirements, referrals and prohibitions related to Freddie Mac default legal matters

This section contains requirements related to: ■ Training of firms ■ Referral of Freddie Mac Default Legal Matters to firm ■ Prohibitions related to Freddie Mac Default Legal Matters

(a) Training of firms (i) Training prior to referral The Servicer must not refer any Freddie Mac Default Legal Matters to a firm until the Servicer verifies that the firm has executed a limited retention agreement with Freddie Mac and has completed Freddie Mac’s new firm training. A firm is only required to attend Freddie Mac’s new firm training once, regardless of the number of Servicers that select and retain the firm. (ii) Ongoing training The Servicer must ensure that each firm obtains appropriate training to keep the firm apprised of updated Freddie Mac requirements. If the Servicer provides its own standard training and/or other communication materials to a firm, the Servicer must include information regarding Freddie Mac’s requirements.

(b) Referral of Freddie Mac Default Legal Matters to firm (i) Requirements prior to referral Prior to referring a Freddie Mac Default Legal Matter to a firm, the Servicer must confirm that the firm is eligible to receive a referral by ensuring that: ■ The firm meets the Firm Minimum Requirements, as specified in Section 9501.2 ■ Freddie Mac has provided a “no objection” determination, as specified in Section 9501.3(a) ■ The firm has executed a contract with the Servicer requiring the firm to comply with all applicable Freddie Mac requirements, as specified in Section 9501.3(b) ■ The firm has executed a limited retention agreement with Freddie Mac, as specified in Section 9501.3(b) ■ The firm has completed Freddie Mac training and any additional Servicer training, as specified in Section 9501.4(a); and ■ There are no conflicts of interest with respect to the retention of the firm and referral of Freddie Mac Default Legal Matters to the firm (ii) Diversification of referrals The Servicer must diversify its referrals of Freddie Mac Default Legal Matters to an appropriate number of firms in each jurisdiction to protect the interests of Freddie Mac and to mitigate the risks related to a high concentration of Freddie Mac files. In selecting firms for referrals, the Servicer must consider firm capacity and management of staff to file ratios. (iii)Bankruptcy and foreclosure matters The Servicer must not refer foreclosure matters directly to trustees listed on the deeds of trust. Note: Refer to Section 9401.3(b) for additional referral requirements. (iv) Providing documentation to firm The Servicer must identify a file as a Freddie Mac Default Legal Matter when sending the file to a firm. When referring a file to a firm, the Servicer must provide all documentation required to initiate a foreclosure. If the firm requests any additional information and/or documentation at any time, the Servicer must provide such requested information and/or documents within three Business Days after receipt of the request or within such earlier time frame, if necessary, to comply with timing requirements under applicable law or court orders and procedures. For any Mortgage that the Servicer refers for foreclosure that is subsequently repurchased by the Servicer, whether voluntarily or involuntarily, the Servicer must notify foreclosure and/or bankruptcy counsel within two Business Days of the completed repurchase. Note: See Chapter 3602 for additional information about repurchases. (v) Contingency plan All Servicers must have a contingency plan in place, either in the form of a standalone document or incorporated into policies and procedures, to redirect new foreclosure and bankruptcy referrals.

(c) Prohibitions related to Freddie Mac Default Legal Matters Servicers must not require the firm to perform any foreclosure or bankruptcy-related services on any Freddie Mac Default Legal Matter without compensation. (i) Prohibition against charging for, contracting for or making arrangements to receive benefits for Servicing obligations A Servicer, whether acting directly or through an affiliate, service provider, vendor or outsourcing company, must not directly or indirectly: ■ Charge Freddie Mac or the firm for any foreclosure or bankruptcy-related Servicing obligations, including expenses covered by the Servicing Spread; or ■ Contract or make any arrangements with the firm whereby the Servicer (or its affiliate, service provider, vendor or outsourcing company) receives, directly or indirectly, any financial or other benefits (including, but not limited to, payments, the provision of employees or free or discounted services or products) from the firm in connection with any Freddie Mac Default Legal Matter or Freddie Mac-owned or guaranteed Mortgage Note: Refer to Section 8103.2(b) for additional information on Servicing obligations. (ii) Prohibitions with respect to use of specific vendors, services and/or products The Servicer, and not a service provider, vendor or outsourcing company assisting the Servicer in Servicing defaulted Mortgages, must select the firm to handle Freddie Mac Default Legal Matters, and Servicers must not permit service providers, vendors, outsourcing companies or others to participate in or influence, in any way, the Servicer’s referral process. A Servicer must not, whether acting directly or through an affiliate, service provider, vendor or outsourcing company: ■ Require the firm to contract with or use a particular service provider, vendor or outsourcing company or to use or pay for a particular service or product ■ Refuse to refer a file to the firm because the firm chooses not to contract with or use a particular service provider, vendor or outsourcing company or chooses not to use or pay for a particular service or product; or ■ Charge the firm for any aspect of the file referral or management process, including, but not limited to, the use of connectivity or invoice processing systems (e.g., licensing or subscription fees, “click” charges or any other payment) in order for the firm to provide services necessary to handle Freddie Mac Default Legal Matters (e.g., to prosecute the foreclosure or bankruptcy case) However, a Servicer may require the firm to use certain connectivity or invoice processing systems, provided that the firm is not required to pay for the use of or access to such systems. Note: Refer to Section 9501.5(a) for information about use of and reimbursement for connectivity and invoice processing systems.