Freddie Mac Single-Family Seller/Servicer Guide 9603.1 — General REO Servicing requirements

This section contains information related to: ■ General Servicer requirements for REO properties ■ Required REO documentation and reporting ■ Notifying the taxing authority/HOA of REO ■ Property insurance for REO ■ Canceling utilities for REO

(a) General Servicer requirements for REO properties Once Freddie Mac has acquired a property in REO and the Servicer has successfully reported the foreclosure sale or deed-in-lieu of foreclosure via Resolve® and the Loan Level Reporting tool (see Exhibit 88, Servicing Tools) pursuant to Section 9603.1(b), the Servicer will no longer have the responsibility for the following REO activities, including for properties located in States that have a redemption, confirmation process or ratification of sale: ■ Securing, maintaining, inspecting, protecting and preserving the property ■ Making advances to superior lienholders, including condominium/homeowners association (HOA) or Cooperative Corporation assessments (see Chapter 8801 for special Servicing requirements for Cooperative Share Loans), Condominium Unit maintenance fees or Cooperative Unit Maintenance Fees and ground rents ■ Evicting the occupants in the property ■ Marketing and rehabilitating the REO Servicers are responsible for the following activities until the sale of the REO by Freddie Mac or the MI, FHA, RHS or VA: ■ Filing and concluding FHA, RHS and VA claims, if applicable. (Freddie Mac will file MI claims.) ■ Filing and concluding property insurance claims, if applicable, and applying for premium refunds, in accordance with Section 9603.1(d). The Servicer is required to cancel any existing property insurance policies no later than 14 days after the foreclosure sale or deed-in-lieu of foreclosure has been successfully reported to Freddie Mac. Freddie Mac may instruct the Servicer to maintain property insurance (even if the property is vacant and has no claimable damage). If Freddie Mac makes this request, the Servicer must continue the insurance coverage until Freddie Mac notifies the Servicer that Freddie Mac has sold the REO. ■ Referring all inquiries and offers regarding purchase of the REO to Freddie Mac (see Directory 6) within one Business Day of the inquiry or offer ■ Fulfilling all requests made by Freddie Mac, including attorney selection. If the Servicer requires the assistance of an attorney in fulfilling any of the obligations set forth in this chapter, the Servicer must use an attorney who meets the criteria in Section 9501.2. ■ Taking such action that Freddie Mac may request regarding a property Servicers may review the REO Overview report, accessible via the “REO” tile of the Servicer’s Servicer Performance Profile (see Exhibit 88), for the property status. The Servicer may also call Customer Service at 800-FREDDIE to obtain this information. Freddie Mac will not send the Servicer a written notice of the sale of the REO.

(b) Required REO documentation and reporting When reporting an REO, the Servicer must report the foreclosure sale result “REO” in Resolve no later than one Business Day immediately following the date of the foreclosure sale. Refer to Section 9301.9(a). The Servicer must submit to Freddie Mac (see Directory 6) any information Freddie Mac requests from the Mortgage file within 15 Business Days of the date of its request. (Refer to Section 3302.1(c) for Freddie Mac’s record retention requirements for Mortgage files on foreclosed Mortgages.) Additionally, for a Cooperative Unit in REO, the Servicer must submit the information listed in Section 8801.4(d) if requested by Freddie Mac.

(c) Notifying the taxing authority/HOA of REO Within five days of successfully reporting the foreclosure sale or deed-in-lieu of foreclosure via Resolve, the Servicer must notify all organizations that require notice of Freddie Mac’s ownership of the property to ensure that statements are sent to the appropriate location. This includes, but is not limited to, the taxing authority, condominium association, municipality, HOA or Cooperative Corporation (see Chapter 8801 for special Servicing requirements for Cooperative Share Loans), and any organization as required by law. When the Servicer contacts these organizations, the Servicer must update the remitter’s name as follows: Federal Home Loan Mortgage Corporation c/o Radian Real Estate Management 6330 South 3000 East, Suite 600 Salt Lake City, UT 84121 Important: Freddie Mac will pay the property taxes, condominium/HOA or Cooperative Corporation assessments, Condominium Unit maintenance fees or Cooperative Unit Maintenance Fees and ground rents, as applicable, as they become due after the Servicer successfully reports the foreclosure sale or the deed-in-lieu of foreclosure. Freddie Mac may retain a vendor to conduct such activities. There are special requirements for REO located in California. California taxing authorities reassess properties for supplemental taxes from the foreclosure sale date to the sale date of the REO. Also, taxing authorities often generate a supplemental tax statement long after the REO sale date. Therefore, the Servicer must notify the taxing authority in writing to send any supplemental tax bills to Freddie Mac at the address above within five days following the foreclosure sale or the deed-in-lieu of foreclosure date.

(d) Property insurance for REO The Servicer must maintain or cancel the existing property insurance policy according to the requirements in this section and Section 8202.6. Additionally, the Servicer must assist in the filing of a property insurance claim, when applicable, according to requirements in Section 9603.1(d)(ii) below. (i) Maintaining or canceling property insurance The Servicer must take all actions required in the mortgage clause of all applicable property insurance policies, including, but not limited to, providing all notices to the insurer required under such clause in order to preserve the coverage and its maximum benefits for the Servicer and/or Freddie Mac as mortgagee. The Servicer must cancel such policies within 14 days after the foreclosure sale or deed-in-lieu of foreclosure has been reported to Freddie Mac, even if there is claimable damage to the property or if the property has sold. (ii) Filing claims A property recovery firm will handle the insurance claim filing process on Freddie Mac’s behalf. The Servicer must provide that firm with the necessary information to file and process the claim within three Business Days of their request for such information. (iii) Obtaining a refund for the unearned insurance premiums After canceling the policy, the Servicer must submit a request for the unearned portion of the insurance premium to the insurance company for any premium that the Servicer paid on behalf of the Borrower, if applicable. The Servicer must offset any refund it receives from the insurance company against expenses the Servicer requests via PAID (Payments Automated Intelligent and Dynamic) (see Exhibit 88).

(e) Canceling utilities for REO Once the Servicer has successfully reported the foreclosure sale or deed-in-lieu of foreclosure to Freddie Mac, Freddie Mac or its agent/vendor will transfer the utilities to Freddie Mac. The Servicer can obtain reimbursement for any utility bills it paid that Freddie Mac approved in advance or the Servicer incurred up to the foreclosure sale or deed-in-lieu of foreclosure pursuant to the process for reimbursement of expenses in Section 9603.3(d).