Freddie Mac Single-Family Seller/Servicer Guide 9603.3 — Financial and legal obligations

Freddie Mac Single-Family Seller/Servicer Guide 9603.3 — Financial and legal obligations

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

This section contains requirements related to: ■ Property Condition Certificate (PCC) process ■ Condominium/homeowners association (HOA) or Cooperative Corporation assessments, ground rents and property taxes for REO ■ Eviction requirements for REO ■ Reimbursement of expenses incurred on an REO property ■ Final settlement between the Servicer and Freddie Mac for REO ■ Late execution of REO repurchase (a) PCC process The Servicer may review the REO Overview report, accessible via the “REO” tile of the Servicer’s Servicer Performance Profile (see Exhibit 88, Servicing Tools), for the property status, including the PCC completion date. 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) Condominium/HOA or Cooperative Corporation assessments, ground rents and property taxes for REO (i) REO located in a Condominium Project, Planned Unit Development (PUD) or Cooperative Project or subject to a leasehold estate Pursuant to Section 9603.1(a), the Servicer is no longer responsible for paying condominium/ 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, as applicable, upon the successful reporting of the foreclosure sale or deed-in-lieu of foreclosure to Freddie Mac via Resolve®. In special circumstances, Freddie Mac may require the Servicer to pay assessments after the foreclosure sale date, in order to protect Freddie Mac’s interests. (ii) Reimbursement of duplicate assessments and property tax payments In the event the Servicer has complied with the requirements of this section and the duplication of assessments and property tax payments exists, Freddie Mac will reimburse the Servicer for its portion of the duplicate payment(s) in accordance with the requirement in this chapter and Chapter 9701. To receive reimbursement for the duplicate payment(s), the Servicer must submit a request for reimbursement to Freddie Mac via e-mail (see Directory 6) and include in that request proof of the Servicer’s compliance with the applicable requirements and proof of the payment of the expenses. Freddie Mac will not reimburse the Servicer for any such duplicate payments if the Servicer does not meet the requirements in this section and/or the requirements in Chapter 9701. In such instances, the Servicer may seek a refund from the condominium association, HOA or Cooperative Corporation or taxing authority to which duplicate payments were made. (c) Eviction requirements for REO Freddie Mac will conduct the eviction proceedings if the property is occupied. If Freddie Mac requests information or documentation from the Servicer pertaining to the eviction, then the Servicer must provide the information or documentation to Freddie Mac within the requested time frames. (d) Reimbursement of expenses incurred on an REO property For an REO not acquired by a third party at the foreclosure sale or for legal expenses not legally collectible from the third-party purchaser, Freddie Mac will reimburse the Servicer for reasonable expenses incurred in accordance with the provisions in Chapter 9701; Exhibit 57A, Approved Attorney, Foreclosure, Mediation, Postponement Fees and Title Expenses; and/or those approved by Freddie Mac during the foreclosure process. (e) Final settlement between the Servicer and Freddie Mac for REO After Freddie Mac has received all proceeds from the sale of the REO and the Servicer has submitted all expense reimbursement requests to Freddie Mac through PAID (Payments Automated Intelligent and Dynamic) (see Exhibit 88), Freddie Mac will calculate and complete the final settlement of foreclosure expenses between the Servicer and Freddie Mac. Freddie Mac will bill the Servicer for the Servicer’s proportionate share of any expenses Freddie Mac has advanced during the REO holding period if Freddie Mac is not able to recover them from the Servicer’s share of the proceeds. Otherwise, Freddie Mac will net these expenses against the Servicer’s proportionate share of the sale proceeds, and Freddie Mac will send the balance of the Servicer’s share to the Servicer. Freddie Mac will also collect any fees, charges or other amounts the Servicer owes Freddie Mac with this settlement. (f) Late execution of REO repurchase Freddie Mac may request a Servicer to repurchase a Mortgage post-foreclosure and after investor reporting ceases and the loan has been transferred to REO. If the Servicer does not remit proceeds to Freddie Mac in accordance with the time frame and requirements in Section 8303.3(f), the Servicer will be assessed a late execution of REO repurchase compensatory fee. The compensatory fee will be calculated by multiplying the amount of the remittance shortage by the highest quoted prime rate on the last Business Day of the month in which the REO repurchase occurred in the print edition of The Wall Street Journal in its regular column entitled “Money Rates” plus 3%. If the prime rate is not published, then Freddie Mac will determine the comparable rate. The amount of the late remittance and the number of days that the remittance is late is based on a 365-day year and determines the amount of the late execution of REO repurchase compensatory fee due to Freddie Mac. There is a minimum charge of $50 on any late remittance. For purposes of calculating the charge, Freddie Mac uses the rate described above for any late remittances occurring between the first day after the Accounting Cycle and up to and including the last day of the following Accounting Cycle. Note: Refer to Section 8303.5(h) for the compensatory fee assessed for late execution of a repurchase request if not an REO.

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