Single-Family Seller/Servicer Guide, Volume 2

Chs. 51-57: General Freddie Mac Policies

Chapter 52: Mortgage File Retention

52.5: Ownership of Mortgage file and related records (11/7/02)

All documents in the Mortgage file and all other documents and records of whatever kind or description (whether
prepared or originated by the Seller or others, or whether prepared or maintained or held by the Servicer or others
acting for and on behalf of the Servicer), including all current and historical computerized data files, that are
reasonably required to originate and subsequently service a Mortgage for Freddie Mac will be, and will remain at all
times, the property of Freddie Mac. All of these records in the possession of the Servicer are retained by the Servicer
in a custodial capacity only.

52.6: Inspection by Freddie Mac (11/7/02)

Title: 52.6: Inspection by Freddie Mac (11/7/02) Copy To Clipboard
Document ID: 00f540b5-4cbf-4087-bb8c-2186569bdbaa Copy To Clipboard
Document Name: 003672892@n2!ch-52!n52.6 Copy To Clipboard
Close

52.6: Inspection by Freddie Mac (11/7/02)

When Freddie Mac requests, either before or after termination of Servicing, the Servicer must permit Freddie Mac at
any time during normal business hours to inspect the Mortgage files and all of the Servicer's records pertaining to
Mortgage operations related to Freddie Mac.

52.7: Transfer of file custody; security of file information (10/01/09)

Freddie Mac may at any time require the Servicer to deliver the following documents to a Document Custodian
approved by Freddie Mac or a transferee designated by Freddie Mac:

•
Any original Note, Security Instrument, assignment and modifying instrument still in the Servicer's custody
• Any Mortgage file, document within a Mortgage file or other related documents and records in the Servicer's or
its Document Custodian's custody, whether maintained as originals or as copies in accordance with Section
52.2

The Servicer may, without Freddie Mac's prior approval, entrust custody of all or part of the Mortgage file to the
Document Custodian holding Notes and assignments under Section 18.2. When requested, the Servicer must be able
to identify to Freddie Mac those file items held by the Document Custodian and document to Freddie Mac the
Document Custodian's acknowledgment that such file items:

•
Are Freddie Mac's property
•
Will be maintained by the Document Custodian according to standards at least equal to those set in this chapter
• Will be maintained in such a way as to ensure the security and confidentiality of the information; protect
against anticipated threats or hazards to the security or integrity of the information; and protect against
unauthorized access to or use of such information
•
Will be surrendered to Freddie Mac at any time Freddie Mac may request them
The Servicer agrees to indemnify Freddie Mac and hold Freddie Mac harmless for any loss, damage or expense
(including court costs and reasonable attorney fees) that Freddie Mac may incur as a result of the Document
Custodian's holding all or part of the Mortgage file.

The Servicer must maintain a copy (in a form allowable under Section 52.2) of any original document that has been
entrusted to the Document Custodian for safekeeping. If all or part of the Mortgage file is held by the Servicer's
Document Custodian, the Servicer agrees to recover from the Document Custodian (at the Servicer's expense) and
provide to Freddie Mac (at the place and within the timeframe specified by Freddie Mac) any Document Custodian-
held original document requested by Freddie Mac for the postfunding quality control detailed in Chapter 47 or in
conjunction with a Freddie Mac desktop or on-site review of the Servicer's Servicing operations.

54.1: Compensation for Servicing Mortgages (04/25/06)

The compensation for the performance of the Servicer's duties for each Mortgage purchased by Freddie Mac is the
amount by which the Note Rate exceeds the Accounting Net Yield, with a Minimum Servicing Spread to provide
adequate compensation.

The Minimum Servicing Spread is 0.250% (25 basis points) for all Home Mortgages unless the Purchase Documents
provide otherwise.

For Mortgages with annual- or monthly premium lender-paid mortgage insurance, the Minimum Contract Servicing
Spread must be no less than the Minimum Servicing Spread plus the amount necessary to pay the mortgage
insurance premium when due.

For Mortgages with single-premium lender-paid mortgage insurance, the Minimum Contract Servicing Spread must
be no less than the Minimum Servicing Spread.

Refer to Section 8.2.2 for Servicing Spread requirements.

The Minimum Servicing Spread for Second Mortgages is 0.500%.

The Minimum Servicing Spread for Home Improvement Loans (HILs) Purchased in Whole on or before January 10,
1986, is 0.625%.

54.4: Servicing obligations to be performed for the Servicing compensation (02/07/03)

In consideration for the Servicing Spread, a Servicer is responsible for the performance of all of its Servicing
obligations described in the Guide and other Purchase Documents for each of the Mortgages purchased by Freddie
Mac. The Servicer's Servicing obligations compensated by the Servicing Spread include, among other things,
undertaking all activities required to protect Freddie Mac's interest in the Mortgage in the event of a foreclosure of
the property or a bankruptcy of the Borrower, such as:

•
Preparing foreclosure packages
•
Finding missing documents and/or assignments
•
Resolving any title issues that are the result of the Seller's or Servicer's action or inaction
•
Managing attorneys
•
Working with the Borrower to resolve the delinquency through loss mitigation activities, and
•
Handling the bankruptcy management activities specified in Chapter 67

The Servicer may not directly or indirectly charge Freddie Mac, the foreclosure attorney/trustee or the bankruptcy
attorney for any of the foreclosure- or bankruptcy-related Servicing obligations of a particular Mortgage, unless this
Guide or the other Purchase Documents specifically authorize the charge or compensation.

If Freddie Mac determines that a Servicer or any third party retained by the Servicer to perform any of its Servicing
obligations (commonly referred to as outsourcing) has passed or charged, directly or indirectly, to Freddie Mac, the
foreclosure attorney/trustee or the bankruptcy attorney any expenses for Servicing obligations covered by the
Servicing Spread or any expenses itemized in Section 71.18, then Freddie Mac may:

• Refuse to reimburse the Servicer for any attorney fees and foreclosure and bankruptcy costs related to the
applicable Mortgage, and/or
• Preclude the attorney who pays any such expenses on Freddie Mac Mortgages from processing future
foreclosures or bankruptcies for Freddie Mac

If Freddie Mac has already reimbursed the Servicer for such a fee or expense, then Freddie Mac may elect to offset
the entire legal fee from future foreclosure expenses or may seek reimbursement of the entire legal fee with interest.

Nothing in the Guide is intended to prohibit a foreclosure attorney/trustee or bankruptcy attorney from assisting a
Servicer by working with a Borrower to facilitate a reinstatement of the Mortgage or loss mitigation activity.

55.1: General requirements for Servicing reports (1/1/05)

A Servicer is required to send a monthly report via MIDANET ® to Freddie Mac, in conjunction with various paper
reports. The following sections of the Guide state these Servicing reporting requirements:

Servicing Reporting Requirements for Home Mortgages and Location

Second Mortgage/HILs
Adverse matters Chapter 67
Charge-offs Sections B65.49-B65.53
Credit repositories Section 55.4
Foreclosures Chapter 66
Internal Revenue Service (IRS) Sections 55.2, 55.3 and 55.3.1
Monthly Delinquency (MIDANET) Section 64.10
Property Inspections Sections 64.7, 65.29-65.34 and 66.34-
66.36
REO Chapter 70
Repurchases Chapter 72
Supplemental Delinquency Section 64.10, Chapters 65, A65, B65
and 66
Transfers of Ownership/Assumptions Chapter 60

Accounting reporting requirements are set forth in Chapter 78 of this Guide.

Each report and all correspondence for a particular Mortgage must reference the Freddie Mac Seller/Servicer
number and the Freddie Mac loan number. The Servicer must ensure that all reports required or requested by
Freddie Mac are accurately prepared and promptly submitted.
(a) Computer facsimiles

Freddie Mac will accept computer-generated facsimiles for:

•
Form 102, Second Mortgage/HIL Servicing Transmittal
•
Form 1013, 1-4 Unit Property Servicing Inspection Report
•
Form 105, Multipurpose Loan Servicing Transmittal

Any computer-generated facsimiles of these forms must:

•
Reflect the most current comparable Freddie Mac form available
• Be in the same format as the comparable Freddie Mac form with no alterations to the placement of the
data fields and no deletions of data fields
•
Provide at least two lines of space between detail lines
(b) Additional reports

The Servicer must submit such other reports as Freddie Mac may require from time to time.
(c) Noncompliance fees

Failure to provide timely, complete and accurate reports (regardless of the mode of submission or transmission)
subjects the Servicer to the Servicing reporting noncompliance fees set forth in Sections 64.10.1, 66.56 and
78.47.

Accounting reporting and Servicing reporting noncompliance fees are monitored and assessed separately.

Freddie Mac reserves the right to change all fees and other remedies at any time and at its sole discretion.

56.7: Endorsement of Notes and assignment of Security Instruments (10/01/09)

When a Mortgage is sold to Freddie Mac, the Seller must endorse the Note in blank in accordance with Section 16.4.
When a Transfer of Servicing occurs, the Transferor Servicer may not complete the blank endorsement or further
endorse the Note, but must prepare and complete assignments according to the following requirements:

(a) Concurrent Transfer of Servicing for a Mortgage not registered with the Mortgage Electronic
Registration Systems Inc. (MERS)

To prepare and complete assignment of the Security Instrument for a Concurrent Transfer of Servicing for a
Mortgage not registered with MERS, the Transferor Servicer must:

• Record any Intervening Assignments to complete the chain of assignments to it from the original
mortgagee, in accordance with Section 22.14(a)
•
Assign the Security Instruments to the Transferee Servicer, and record the assignment
• Follow the document custodial procedures set forth in Section 56.9 and deliver the assignment to the
Transferee Document Custodian to be verified in accordance with the requirements of Section 18.5

See Section 22.14(a) for additional information.

(b) Concurrent Transfer of Servicing for a Mortgage registered with MERS

To prepare and complete an assignment of the Security Instrument for a Concurrent Transfer of Servicing of a
Mortgage that is registered with MERS:

• If the Transferee Servicer is a MERS Member, no further assignment is needed. The Transferor
Servicer must notify MERS of the Transfer of Servicing.
• If the Transferee Servicer is not a MERS Member, then for a Concurrent Transfer of Servicing:

• The Transferor Servicer must prepare and record an assignment of the Security Instrument (on
behalf of MERS) from MERS to the Transferee Servicer
• The Transferor Servicer must follow the document custodial procedures set forth in Section 56.9,
and deliver the assignment to the Transferee Document Custodian to be verified and certified in
accordance with the requirements of Section 18.5

See Section 22.14(b) for additional information.

(c) Subsequent Transfer of Servicing for a Mortgage not registered with MERS

To prepare and complete an assignment of a Security Instrument for a Subsequent Transfer of Servicing for a
Mortgage not registered with MERS, the Transferor Servicer must:

•
Recover and destroy any original unrecorded assignments to Freddie Mac that may have been prepared
•
Assign the Security Instrument to the Transferee Servicer and record the assignment
• Follow the document custody procedures set forth in Section 56.9, and deliver the assignment(s) to the
Transferee Document Custodian to be verified and certified in accordance with the requirements of
Section 18.5

If an original assignment to Freddie Mac was recorded, no additional assignment need be made.

56.2: Defined terms for Transfers of Servicing (09/10/01)

Sellers and Servicers should be familiar with Freddie Mac's definitions for the following terms as they relate to
Transfers of Servicing:

•
Concurrent Transfer of Servicing
•
Effective Date of Transfer
•
Subsequent Transfer of Servicing
•
Transferee
•
Transferor

Definitions for these terms are located in the Glossary of this Guide.

56.4: Review of Transferor and Transferee (09/10/01)

(a) By Freddie Mac

 1. Freddie Mac will work with the Transferor and Transferee to approve a Transfer of Servicing, but
reserves the right to approve with conditions. Freddie Mac is not obligated to approve a Transfer of
Servicing. Freddie Mac will not approve a Transfer of Servicing if Freddie Mac, in the exercise of its
judgment and in its sole discretion, determines that such a transfer is not in the best interests of Freddie
Mac or determines that the Transferor or Transferee will not be able to adequately service the Mortgages
and/or Real Estate Owned (REO) remaining in the post-transfer portfolios.
2. The Transferor and Transferee must be approved Seller/Servicers and must be in compliance with all the
requirements of the Purchase Documents. When reviewing a Transfer of Servicing request, Freddie Mac
will review both the Transferor and the Transferee. Transferors and Transferees must not be subject to
any situations prohibited under Section 5.2. The review will focus on, but not be limited to, financial
capacity to honor contractual obligations, existence of any outstanding obligations (such as repurchases),
delinquency and REO ratios, and delinquency reporting.
3. Freddie Mac's review of the Transfer of Servicing request may take additional time if either the
Transferor or Transferee is subject to any situations prohibited under Section 5.2, or the Purchase
Documents reflect negotiated terms, including the sale of Mortgages to Freddie Mac with recourse
(b) By Transferee Servicer

Freddie Mac encourages the Transferee to perform a due diligence review on the loans in the transfer and on
Custodial Accounts, and to be aware of any obligations of the Transferor under the Purchase Documents. The
Transferee's due diligence efforts should include, but are not limited to, a review of the following information
that the Transferor may provide:

1.
Reports and data that confirm and support information provided by the Transferor
2. Pertinent reports prepared by internal or external auditors, including any recently completed Freddie Mac
audit
3.
Our Servicer Performance Profile for the Transferor

56.11: Notice to Borrowers (09/10/01)

(a) Transferor's notice to the Borrower

The Transferor must provide timely notice to the Borrowers to ensure a smooth transition, avoid
disruption in Mortgage payments and comply with applicable laws and regulations. The Transferor
must provide written notice to each Borrower at least 15 days before the first payment is due to be
received by the Transferee.
(b) Transferee's notice to the Borrower

The Transferee must provide to each Borrower written confirmation of the information in the
Transferor's notice to the Borrowers within 15 days before the date the first payment is due to be
received by the Transferee.
(c) Notice requirements

The notice must advise the Borrower of the following:

1.
The Effective Date of Transfer
2.
The name and address of the Transferee
3. The names and telephone numbers of the contact persons or departments of the Transferor and
of the Transferee where the Borrowers' inquiries relating to the transfer should be directed (If
toll-free numbers are not available, the letter must indicate that collect calls will be accepted.)
 4. The date when the Transferor will no longer collect the Borrowers' payments and when the
Transferee will begin to collect them
5. Any previously Escrowed optional Mortgage life or accident and health insurance for which the
Transferee will not assume responsibility, with appropriate suggestions or instructions for the
Borrower to continue such coverage
6.
Procedures for maintenance of automatic draft payments, if applicable

The notice may not amend the terms of a Mortgage other than those relating to where to send payments.

56.11: Notice to Borrowers (09/10/01)

(a) Transferor's notice to the Borrower

The Transferor must provide timely notice to the Borrowers to ensure a smooth transition, avoid
disruption in Mortgage payments and comply with applicable laws and regulations. The Transferor
must provide written notice to each Borrower at least 15 days before the first payment is due to be
received by the Transferee.
(b) Transferee's notice to the Borrower

The Transferee must provide to each Borrower written confirmation of the information in the
Transferor's notice to the Borrowers within 15 days before the date the first payment is due to be
received by the Transferee.
(c) Notice requirements

The notice must advise the Borrower of the following:

1.
The Effective Date of Transfer
2.
The name and address of the Transferee
3. The names and telephone numbers of the contact persons or departments of the Transferor and
of the Transferee where the Borrowers' inquiries relating to the transfer should be directed (If
toll-free numbers are not available, the letter must indicate that collect calls will be accepted.)
4. The date when the Transferor will no longer collect the Borrowers' payments and when the
Transferee will begin to collect them
5. Any previously Escrowed optional Mortgage life or accident and health insurance for which the
Transferee will not assume responsibility, with appropriate suggestions or instructions for the
Borrower to continue such coverage
6.
Procedures for maintenance of automatic draft payments, if applicable

The notice may not amend the terms of a Mortgage other than those relating to where to send payments.

56.15: Liabilities of the Transferor and Transferee (06/22/07)

(a) Warranties

Except as stated in the following paragraph, for Transfer of Servicing requests received by Freddie Mac, the
Transferee is liable to Freddie Mac for all sale and Servicing representations, covenants and warranties in the
Purchase Documents with respect to the Mortgages and Real Estate Owned (REO) for which Servicing is
transferred, whether or not the Transferor had such liability.
 For Mortgages sold through Gold Cash Xtra® and the Servicing Released Sales Process, the Transferor remains
liable to Freddie Mac for all sale representations, covenants and warranties in the Purchase Documents with
respect to the Mortgages for which Servicing is transferred. The Transferee is liable to Freddie Mac for all
servicing representations, covenants and warranties in the Purchase Documents with respect to the Mortgages
for which Servicing is transferred.
(b) Hold harmless

The Transferor and the Transferee, jointly and severally, fully indemnify and agree to hold Freddie Mac, its
successors and assigns, harmless from and against any and all losses, claims, demands, actions, suits, damages,
costs and expenses (including reasonable attorney fees) of every nature and character that may arise or be made
against or be incurred by Freddie Mac as a result of the Transferor's or the Transferee's failure to comply with
applicable law or failure to comply with Freddie Mac's Servicing requirements as set forth in the Purchase
Documents, including, but not limited to failure to provide the notices required by Section 56.14, failure to
make any payment to the appropriate parties for which Escrow is collected and failure to credit properly any
payments received from Borrowers.
(c) Servicing

The Transferee hereby agrees to service the Mortgages in accordance with the terms of the unitary, indivisible
master Servicing contract comprising the Guide, applicable bulletins, the applicable MIDANET Users' Guide
and any other applicable Purchase Documents, all of which are fully incorporated herein by reference.

64.6: Minimum collection requirements (07/16/10)

The Servicer must:

•
Be readily available to the Borrower to offer financial counseling and advice
• Make personal contact with the Borrower as early and often as necessary to promptly cure the
Delinquency
• Continue to contact the Borrower if satisfactory arrangements have not been made to cure the
Delinquency or until the Servicer determines foreclosure is appropriate

The following chart lists the minimum collection efforts that must be made in an attempt to bring a
delinquent Mortgage current:

Days after Due Date Action required

5-15 Identify delinquent new Borrower Mortgages, as defined in Section 64.4(b), and
make personal contact with each Borrower
10 Identify delinquent modified Mortgages and Second Mortgages/HILs
11-13 Mail late notices to delinquent modified Mortgage and Second Mortgage/HILs
Borrowers
15 Identify delinquent First Lien Mortgagesnot previously modified
16-18 Mail late notices to Borrowers with a delinquent First Lien Mortgage not previously
modified
16-21 Initiate telephone contact with each delinquent Borrower
45-60 Obtain a property inspection unless the Borrower cures the Delinquency or the
Borrower has agreed to a repayment plan and has begun making payments
required under the repayment plan

Contact each known superior lienholder

45-60 Send initial foreclosure alternative letters
60 Mail the breach letter for all Mortgages, including First Lien Mortgages, modified
Mortgages, and Second Mortgages/HILs that do not have satisfactory payment
arrangements no later than
120 Refer all Mortgages, including First Lien Mortgages, modified Mortgages, and
Second Mortgages/HILs with expired breach letters to foreclosure no later than

In addition, for leasehold Mortgages, you must contact the lessor and if required under the terms of a
non-disturbance agreement, any lender with a prior lien on the fee simple landowner/lessor's fee simple
interest.

If satisfactory arrangements to cure a Delinquency have not been obtained, the Servicer must continue to
follow up with notices, letters, telephone contacts or face-to-face interviews, etc., until the Mortgage has
been brought current or until the Servicer determines that foreclosure or an alternative to foreclosure is
appropriate.

If collection efforts are unsuccessful, the Servicer must attempt to cure the Delinquency in the shortest
period possible by pursuing alternatives to foreclosure set forth in Chapters 65, A65 and B65 or initiating
foreclosure action as set forth in Chapter 66. For Delinquency and credit repository reporting
requirements, refer to Sections 64.10 through 64.11 and 55.4.

A65.17: Approval authority (08/20/09)

You may approve a repayment plan that has a term greater than 1 month and less than or equal to 12
months without obtaining our approval. In addition, if there is no Escrow account on the Mortgage for
taxes, and taxes are not current or the Borrower has not entered into a repayment plan with the taxing
jurisdiction, then you may approve a repayment plan of up to 18 months under the following conditions:

1.
You must pay the delinquent taxes, and
2.
You must set up an Escrow account for future taxes

You must document your reasons for approving a repayment plan in the Mortgage file.

You must obtain our approval for a repayment plan that exceeds 12 months in duration unless the
repayment plan includes the repayment of delinquent taxes. To obtain our approval, submit Form 105,
Multipurpose Loan Servicing Transmittal, to us (see Directory 5) and attach the following:

1.
Completed Form 1126, Borrower Financial Information
2. Borrower's letter explaining why he or she has an involuntary inability to pay (refer to Section
65.17.1)
3.
Documentation that substantiates an involuntary inability to pay
4.
A copy of the Borrower's most recent pay stub or voucher, indicating year-to-date earnings, or
5.
Year-to-date and previous year's profit and loss statements if the Borrower is self-employed

A65.24: Long-term forbearance requirements (08/20/09)

You must negotiate the terms of the long-term forbearance agreement with the Borrower. The long-term forbearance
agreement:

1.
Must be in writing
2.
Must be signed by you and the Borrower before the plan begins
3. At the end of the long-term forbearance period, the Borrower must cure the Delinquency through a full
reinstatement, payment in full, a repayment plan or a workout option. A loan modification is a workout option
that enables the Borrower to retain homeownership (see Section 65.12). If the Borrower can no longer afford to
retain the property, a workout option to liquidate the Borrower's interest in the property (see Section 65.13)
such as a short payoff, deed-in-lieu of foreclosure or workout Mortgage assumption should be pursued.

Refer to Chapter A65 for requirements on reinstatements and relief options and to Chapter B65 for
requirements on workout options.
4.
Must state that you will initiate foreclosure if the Borrower defaults on the terms of the agreement
5.
May include any accrued late charges due you

In lieu of having a Borrower prepare, sign and return paper loss mitigation documents, the Servicer may collect loss
mitigation information and documents from a Borrower electronically. See Section 50.3.1 for eligible documents
and related requirements.

You must obtain a valuation. If an automated value is unavailable or is not permitted, then you must order a Broker's
Price Opinion (BPO) (see Section 65.39 for instructions on how to obtain a valuation) when you receive a completed
Form 1126, Borrower Financial Information, from the Borrower. See Section 65.39 for instructions on how to order
a BPO. If, at the end of the forbearance term, the Borrower cannot start to repay the Mortgage, you may consider a
workout option and/or initiate foreclosure.

C65.3: Delegation of Authority and HAMP waivers, Supplemental Directives and

Frequently Asked Questions (07/28/10)

(a) Delegation of authority

Unless otherwise notified by Freddie Mac, all Freddie Mac Servicers are eligible to enter into a Trial
Period Plan with a Borrower and approve a modification of a Mortgage under HAMP in accordance
with the requirements of this chapter without obtaining prior approval from Freddie Mac.
(b) HAMP waivers, Supplemental Directives and Frequently Asked Questions

• Temporary waivers issued by Treasury

The Program Administrator may post temporary HAMP waivers on

http://www.HMPadmin.com. Unless Freddie Mac otherwise notifies Servicers in writing,
Servicers may implement such waivers, but in doing so must comply with the terms of such
waivers when Servicing Mortgages for Freddie Mac.
• Permanent waivers, Supplemental Directives and Frequently Asked Questions

The Program Administrator may publish permanent HAMP waivers, Supplemental Directives
and Supplemental Documentation - Frequently Asked Questions on
http://www.HMPadmin.com. Unless Freddie Mac otherwise notifies Servicers in writing,
Servicers must not follow or implement the requirements and guidance specified in these
Program Administrator documents when Servicing Mortgages for Freddie Mac.
C65.4: Eligibility (07/28/10)

The following requirements are included in this section:

•
Mortgage, property and Borrower eligibility requirements
•
Mortgages ineligible to be modified under HAMP
(a) Mortgage, property and Borrower eligibility requirements

The requirements in this chapter apply to Freddie Mac-owned Mortgages that meet the following
requirements:

• First Lien Mortgages owned, securitized or guaranteed by Freddie Mac originated on or before
January 1, 2009, including Cooperative Share Mortgages and Conforming Jumbo Mortgages
sold to Freddie Mac under a Seller's negotiated Purchase Documents, which are secured by:

• 1- to 4-unit, single-family Primary Residences, including Condominium Units and Guide-

eligible Manufactured Homes that are not abandoned, vacant or condemned

Servicers must verify that the property securing the Mortgage serves as the Primary
Residence for at least one of the Borrowers. Refer to Section C65.5.1 for more information
about this verification requirement.

The property securing the Mortgage may be owned by an inter vivos trust, provided the
Borrower (i) is a trustee of the trust, (ii) is a primary beneficiary of the trust, and (iii)
occupies the property as the Borrower's Primary Residence.
• The Borrower must have a Current Monthly Housing Expense-to-income ratio that is greater
than 31% of the Borrower's verified and documented gross monthly income as determined in
accordance with Section C65.5.1.
• The Borrower must document a financial hardship and represent that he or she does not have
sufficient income or liquid assets to make the monthly Mortgage payments by signing and
submitting to the Servicer a completed RMA. If the Servicer determines, based on a review of
the RMA and other documentation, that the Borrower has not experienced a hardship or has
sufficient liquid assets to make the monthly payments, then the Borrower is not eligible for a
modification under HAMP. For example, a Borrower is not eligible for a modification under
HAMP if the Borrower has the financial ability to fully reinstate the Mortgage, or partially
reinstate the Mortgage coupled with the ability to fulfill a repayment plan under Chapter A65's
requirements for reinstatements and repayment plans.
• The Borrower may be either delinquent or current on the Mortgage. However, if the Borrower is
current or less than 60 days delinquent (i.e., less than three monthly payments past due), the
Borrower must first be determined to be in imminent default in accordance with the criteria set
forth in Section C65.5.2 in order to be eligible for HAMP.

A new co-Borrower may, at the request of another Borrower, be added to the Mortgage, provided the
Servicer verifies that the new co-Borrower occupies the property as a Primary Residence in
accordance with the requirements of Section C65.5.1.

With respect to FHA, VA and RHS Mortgages, Servicers must comply with the guidance issued by
the relevant agency.

Program expiration
 HAMP will expire on December 31, 2012. For a Mortgage to be eligible for modification under
HAMP, the Servicer must have received the first Trial Period payment from the Borrower on or
before December 31, 2012. A Servicer may not extend a Trial Period Plan to a Borrower with a Trial
Period Plan Effective Date of January 1, 2013 or later.

Foreclosure/Bankruptcy

The Mortgage may be in foreclosure or in other pending litigation. The Borrower may be in active
bankruptcy or enter into active bankruptcy during the Trial Period; however, the Servicer should
consult with its own legal counsel on the proper method to communicate with and offer a modification
under HAMP to a Borrower in active bankruptcy and obtain all required court approvals. Servicers
must follow applicable federal, State and local laws, including, but not limited to, judicial and
professional rules of conduct governing discussions with opposing parties in litigation when
represented by counsel and federal bankruptcy laws, rules and regulations that govern entering into
a HAMP Trial Period Plan or modification when the Borrower is a debtor in bankruptcy.

For Borrowers who have received a Chapter 7 bankruptcy discharge but did not reaffirm the
mortgage debt under applicable law, the Servicer must make an authorized change to the Trial
Period Plan Notice (Verified) and the Modification Agreement (refer to Section C65.2 for information
regarding authorized changes to the Trial Period Plan Notice (Verified) and Modification Agreement.)

Escrows

Servicers must establish an Escrow account on the Mortgage if an Escrow account is not currently
maintained on the Mortgage, provided its establishment is not prohibited under applicable federal,
State or local law. (Refer to Sections C65.2(c) and C65.6(d) for additional information.)

FHA HOPE for Homeowners

Servicers must consider Borrowers for refinancing into the FHA HOPE for Homeowners program. If
the underwriting process for a HOPE for Homeowners refinance would delay eligible Borrowers from
receiving a HAMP modification offer, Servicers must use the sequential process in Section C65.6 to
begin the Home Affordable Modification evaluation process and work to complete the HOPE for
Homeowners refinance during the Trial Period. Consideration for a HOPE for Homeowners refinance
should not delay eligible Borrowers from receiving a HAMP modification offer and beginning the Trial
Period.
(b) Mortgages and Borrowers ineligible for HAMP

Mortgages ineligible for HAMP include:

•
Any Mortgage secured by an Investment Property or second home
• Any Mortgage that has been previously modified under HAMP or for which the Borrower failed
to comply with the terms of a HAMP Trial Period Plan by not (i) making all required Trial Period
payments, or (ii) providing all required documentation in accordance with the requirements of
this chapter

A Borrower may only qualify for one Trial Period Plan. For example, a non-occupying co-Borrower
who was party to an earlier HAMP Trial Period Plan, whether extended in connection with a Freddie
Mac Mortgage or any other Mortgages, may not obtain another HAMP Trial Period Plan on his or her
Primary Residence.
C65.5: Borrower solicitation (09/01/10)

The following requirements are included in this section:

•
Borrower solicitation
•
Reasonable Efforts Solicitation Standard
•
Required communication upon "right party contact"
(a) Borrower solicitation

Borrowers who are current or less than 31 days delinquent

A Servicer may not solicit a Borrower whose Mortgage is current or less than 31 days delinquent (i.e., no more
than one payment past due) for a modification under HAMP. If a Borrower who is current or less than 31 days
delinquent contacts the Servicer to inquire about eligibility for HAMP, the Servicer must first evaluate the
Borrower for eligibility for a Freddie Mac Relief Refinance Mortgage SM – Same Servicer or advise the
Borrower of the availability of the Freddie Mac Relief Refinance Mortgage SM – Open Access offering (refer to
Chapters A24 and B24). If the Borrower is not eligible for a Freddie Mac Relief Refinance Mortgage the
Servicer must then determine whether the Borrower is in imminent default in accordance with Section
C65.5.2).

Borrowers who are 31 days or more delinquent

Servicers must pre-screen all First Lien Mortgages where Borrowers are 31 days or more delinquent (i.e., two
or more payments past due) to determine if they meet the eligibility requirements in Section C65.4. Servicers
must proactively solicit for HAMP any Borrower whose Mortgage passes this pre-screen no later than the 50th
day of delinquency, and solicitation must include written communication clearly describing HAMP. Servicers
must also ensure that their solicitation letters include a notice regarding foreclosure rescue scams and
availability of HUD-approved counselors ("Foreclosure Scam Notice") similar to the following:

Beware of Foreclosure Rescue Scams. Help is free!

• There is never a fee to get assistance or information about the Making Home Affordable
Program from your lender or a HUD-approved housing counselor.
• For a HUD-approved counselor, visit: http://www.hud.gov/offices/hsg/sfh/hcc/fc/
• Beware of any person or organization that asks you to pay a fee in exchange for housing
counseling services or modification of a delinquent loan
• Beware of anyone who says they can "save" your home if you sign or transfer over the deed to
your house. Do not sign over the deed to your property to any organization or individual unless
you are working directly with your mortgage company to forgive your debt.
• Never make your mortgage payments to anyone other than your mortgage company without
their approval.

Use of Form 1120, HAMP Proactive Solicitation Letter or Form 1121, Documentation Request Letter, satisfies
this requirement. Servicers may send a HAMP solicitation letter prior to or at the same time as the foreclosure
alternative letter specified in Section 64.6 but no later than the 50th day of delinquency.

Note: Servicers are not required to solicit Borrowers in an active Chapter 7 or Chapter 13 bankruptcy
proactively for HAMP. (Refer to Section C65.7.1 for additional requirements related to Borrowers in
 bankruptcy.)

If a Borrower who is 31 to 59 days delinquent responds to the solicitation, the Servicer must first determine the
Borrower to be in imminent default in accordance with Section C65.5.2 prior to considering the Borrower for a
Trial Period Plan under HAMP.
(b) Reasonable Effort Solicitation Standard

A Servicer is deemed to have made a reasonable effort to solicit a Borrower if over a period of at least 30
calendar days the Servicer takes the following actions ("Reasonable Effort Solicitation Standard"):

(1) Makes a minimum of four telephone calls to the last known phone numbers of record, at different times of
the day; and
(2) Sends two written notices to the last address of record by sending one letter via certified/express mail or
via overnight delivery service (such as Federal Express or UPS) with return receipt/delivery confirmation
and one letter via regular mail.

Any contact with eligible Borrowers, whether by telephone, mail or otherwise, must:

(1)
Advise Borrowers that they may be eligible for HAMP
(2) Clearly describe the Initial Package required to be submitted by the Borrower pursuant to the
requirements of this section and state what other information the Servicer needs to complete the HAMP
analysis
(3)
Provide a toll-free telephone number through which the Borrower can reach a Servicer representative; and
(4) Identify any unique requirements the Servicer may have established for submission of an Initial Package
received later than 30 calendar days prior to a scheduled foreclosure sale date

The Servicer must document all contact attempts in the Mortgage file or in its Servicing system in accordance
with the requirements of Section C65.8(i).

The solicitation requirements described above are in addition to the collection requirements set forth in Chapter
64.
(c) Required communication upon "right party contact"

Successful efforts by a Servicer to communicate with the Borrower or co-Borrower about resolution of the
delinquency are referred to as "right party contact" for purposes of this section.

If right party contact is established and the Borrower expresses an interest in HAMP, the Servicer must send a
written communication to the Borrower via regular or electronic mail that clearly describes the Initial Package
the Borrower must submit to request a HAMP modification ("Initial Package communication"). The Initial
Package communication must:

•
Describe the income evidence required to be evaluated for HAMP
•
Provide the RMA
• Include an Internal Revenue Service (IRS) Form 4506T-EZ, Short Form Request for Individual Tax
Return Transcript (or IRS Form 4506-T, Request for Transcript of Tax Return, if necessary)

The Initial Package communication must also include clear language stating that during the HAMP evaluation
the Mortgaged Premises will not: (i) be referred to foreclosure; or (ii) be sold at a foreclosure sale if the
 foreclosure process has already been initiated.

In the Initial Package communication, the Servicer must include a specific date by which the Initial Package
must be returned, which must be 15 calendar days from the date of the Initial Package communication. In the
event the 15th calendar day falls on a non-Business Day, the Servicer must specify the following Business Day
as the date by which the Initial Package must be returned. Electronic mail for this purpose may only be sent to
an e-mail address provided by the Borrower when right party contact was made. Such e-mail address must be
documented in the Mortgage file. (Refer to C65.17 for additional requirements related to electronic
transactions).

If right party contact is established prior to satisfaction of the Reasonable Effort Solicitation Standard, the
Servicer must continue to take steps to satisfy the Reasonable Effort Solicitation Standard until the Borrower
submits the Initial Package. If the Borrower does not submit an Initial Package by the date specified in the
Initial Package communication, the Servicer must immediately resend the Initial Package communication and
must include a specific date by which the Initial Package must be returned, which must be 15 calendar days
from the date of the second Initial Package communication. In the event the 15th calendar day falls on a non-
Business Day, the Servicer must specify the following Business Day as the date by which the Initial Package
must be returned. If the Borrower does not respond by providing an Initial Package within the required time
period set forth in the second Initial Package communication, the Servicer may determine the Borrower to be
ineligible for HAMP.

If right party contact is established but the Borrower submits an incomplete Initial Package within the required
time period, the Servicer must comply with the incomplete information notice requirements set forth in
Sections C65.5.1(a) and C65.12(b). If the Borrower does not respond to either the initial 30-day incomplete
information notice or the subsequent 15-day incomplete information notice by providing a complete Initial
Package within the required time period, the Servicer may determine the Borrower to be ineligible for HAMP.

The Servicer is not required to send an Initial Package communication if, as a result of discussions with the
Borrower, the Servicer determines that the Borrower does not meet the basic eligibility criteria for HAMP as
described in Section C65.4, or the Servicer determines that the Borrower's current PITIAS Payment is
substantially less than 31% of the Borrower's gross monthly income. The Servicer must document its decision
in the Mortgage file in accordance with Section C65.8(i).

C65.9: HAMP incentives (07/28/10)

No incentives of any kind will be paid if the Borrower's Current Monthly Housing Expense-to-income ratio starts
below 31 percent prior to the implementation of HAMP because in this case, the Borrower is ineligible for HAMP.
The calculation and payment of all incentive compensation will be based strictly on the Borrower's verified income.

(a) Servicer incentives

Freddie Mac will pay Servicers:

• A workout compensation fee of $1,000 for each modification meeting the requirements of HAMP. This
fee will be in lieu of the $800 workout compensation fee provided in Section B65.8.
• An additional $500 incentive payment for each modification for an eligible Borrower who was current
under the original Mortgage prior to the Trial Period Plan Effective Date. The Servicer must maintain
records and documentation evidencing that the Borrower was current on the day prior to the Trial Period
Plan Effective Date.

Note: Servicers must remind their current Borrowers in writing that they must make all contractual
payments due under the original Mortgage until the effective date of the Trial Period Plan.
 The $1,000 workout compensation fee and the $500 incentive payment will be considered earned when the
Borrower has made timely payments under the Trial Period Plan and has executed the Modification
Agreement.

In addition, Freddie Mac will pay Servicers a "pay for success" fee of up to $1,000 a year for three years.

The Servicer will only receive a pay for success fee provided the fee has accrued and has been earned. The fee
can be earned if the Borrower's modified monthly PITIAS Payment results in at least a 6% reduction from the
Current Monthly Housing Expense payment used to determine eligibility. Annual pay for success fees will be:

• Equal to the lesser of (i) $1,000 ($83.33/month) or (ii) one-half the reduction in the Borrower's annualized
monthly Mortgage payment
• Accrued monthly provided that, prior to the first, second or third anniversary of the Trial Period Plan
Effective Date, (i) the Mortgage has not been paid off or (ii) the Borrower has not lost good standing by
becoming 90 days or more past due (e.g., three monthly payments are due and unpaid on the last day of
the third month) on the modified Mortgage. However, in instances where the Servicer elected to add an
interim month and establish the due date of the first modified payment as the first day of the second
month following the final Trial Period month as provided in Section C65.7(d), the Servicer will not be
entitled to accrue the pay for success fee for the interim month if the Borrower does not submit funds in
an amount that is at least equivalent to the Trial Period payment during the interim month (See Section
C65.7(d) for additional information).
• Considered earned if, as of the first, second, and third anniversaries of the Trial Period Plan Effective
Date, (i) the Mortgage has not been paid off or (ii) the Borrower has not lost good standing by becoming
90 days or more past due on the modified Mortgage. Once a Borrower has lost good standing, that
Servicer is ineligible for future incentive payments even if, thereafter, the Borrower becomes less than 90
days past due.
•
Paid annually in the month of the anniversary of the Trial Period Plan Effective Date
(b) Borrower incentives

Borrowers who remain current on their monthly Mortgage payments due under a HAMP Modification
Agreement will receive "Pay for Performance" incentives, provided the incentive has accrued and has been
earned in accordance with the requirements below. The incentive can be earned if a Borrower's modified
monthly PITIAS Payment results in at least a 6% reduction from the Current Monthly Housing Expense
payment used to determine eligibility. Annual Pay for Performance incentives will be:

• Equal to the lesser of (i) $1,000 ($83.33/month) or (ii) one-half the reduction in the Borrower's annualized
monthly Mortgage payment
• Accrued monthly for each month the Mortgage remains current (including timely payments during the
Trial Period and any interim month) for five years from the Trial Period Plan Effective Date or until the
Mortgage is paid off, whichever occurs earlier, provided no incentive will accrue for any late Mortgage
payment. However, in instances where the Servicer elected to add an interim month and establish the due
date of the first modified payment as the first day of the second month following the final Trial Period
month as provided in Section C65.7(d), the Borrower will not be entitled to accrue the Pay for
Performance incentive for the interim month if the Borrower does not submit funds in an amount that is at
least equivalent to the Trial Period payment during the interim month (See Section C65.7(d) for additional
information).
• Considered earned if, as of the anniversary of the Trial Period Plan Effective Date, (i) the Mortgage has
not been paid off or (ii) the Borrower has not lost good standing by becoming 90 days or more past due on
the modified Mortgage prior to any payment anniversary. Once a Borrower has lost good standing, that
Borrower is ineligible for future incentive payments even if, thereafter, the Borrower becomes less than
90 days past due.
• Paid to the Servicer annually in the month of the anniversary of the Trial Period Plan Effective Date and
must be applied as described below to the Borrower's account upon receipt
 If the Borrower's Pay for Performance incentive payment is less than the interest-bearing UPB, then the
incentive payment must be applied to the interest-bearing UPB. If the incentive payment is equal to or greater
than the interest-bearing UPB, then the incentive payment must be applied to the deferred UPB and any
remaining incentive payment to the interest-bearing UPB.

Servicers are not required to reamortize the Borrower's Mortgage balance to reduce the Mortgage payment as a
result of the application of this incentive to the unpaid principal balance.

If a Borrower's Pay for Performance incentive is due to be paid when the Borrower is delinquent, but still in
good standing on the payment date, the Borrower's incentive should continue to be applied as a curtailment to
the interest-bearing UPB.

Servicers should prepare and send to the Borrower information on a monthly basis regarding the accrual of
"Pay for Performance" principal balance reduction payments. Servicers are encouraged to incorporate this
information into the Borrower's monthly statements.
(c) Payment process

Servicer and Borrower incentives will be paid via the Program Administrator's payment process. Incentive
payments will be paid in one lump sum payment for all incentives due for the month via Automated Clearing
House (ACH) on the 27th of the month or on the business day prior to the 27 th, if the 27th falls on a weekend or a
holiday.

The Program Administrator will provide Servicers with a Cash Payment Summary Report that includes the
compensation amount on a loan-level basis and identifies Freddie Mac as the payor. The report is accessible
via the HAMP reporting secure web site at https://hamp.lpsappliedanalytics.com, one business day before
the compensation is deposited into Servicer accounts.

In the event of an overpayment of amounts paid for Servicer and/or Borrower incentives, Servicers must
reimburse Freddie Mac in accordance with the Program Administrator's or Freddie Mac's instructions.

If there is a discrepancy between amounts paid for Servicer and/or Borrower incentives and Freddie Mac's
records, Servicers must work with Freddie Mac and the Program Administrator, as necessary, to resolve such
discrepancies. For inquiries or disputes on incentive payments, the Servicer should contact the Program
Administrator directly at MHA_Comp@fanniemae.com or complete the HAMP Incentive Inquiry Request
form located on www.HMPadmin.com. If the Servicer submits a loan-level inquiry to the Program
Administrator related to an incentive dispute or correction on a Freddie Mac Mortgage, the Servicer must copy
Freddie Mac on such an inquiry via e-mail to WKOUT_HAMP_RECON@freddiemac.com. (Refer to Section
C65.10 for additional information on the process for correcting previously applied Borrower incentive
payments.)