7101.3: Review of Transferor Servicer and Transferee Servicer (08/13/18)

© Freddie Mac Single-Family Seller Servicer Guide

(a) Freddie Mac review

(i) Freddie Mac will work with the Transferor Servicer and Transferee Servicer 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 proposed 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 Servicer or Transferee Servicer will not be able to adequately service the Mortgages and/or REO subject to, or otherwise meet their respective obligations under, their respective Servicing Contracts.

(ii) The Transferor Servicer and Transferee Servicer 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 Servicer and the Transferee Servicer. Transferor Servicers and Transferee Servicers must not be subject to any situations prohibited under Section 2301.2 unless approved by Freddie Mac. 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, delinquency reporting and the Transferee Servicer's and Transferor Servicer's performance results on their respective Servicer Success Scorecards. Freddie Mac's review of the Transfer of Servicing request may take additional time if either the Transferor Servicer or Transferee Servicer is subject to any situations prohibited under Section 2301.2, or the Purchase Documents reflect negotiated terms, including the sale of Mortgages to Freddie Mac with recourse.

(b) Transferor Servicer review The Transferor Servicer must participate with the Transferee Servicer with respect to the Transferee Servicer's due diligence review on the Mortgages related to the Transfer of Servicing, Custodial Accounts, obligations under the Purchase Documents and any alternative to foreclosure and provide to the Transferee Servicer any missing data, documents or other information necessary for the Transferee Servicer to perform its obligations under the Guide, applicable Purchase Documents, and in accordance with the terms of the Mortgage and applicable alternatives to foreclosure. The Transferor Servicer should consider adopting the best practices set forth in the Servicing Transfer Best Practices document published at http://www.freddiemac.com/singlefamily/pdf/tos_best_practices.pdf. Upon request, the Transferor Servicer must provide to Freddie Mac the post-transfer review results.

(c) Transferee Servicer review The Transferee Servicer must perform a due diligence review on the Mortgages related to the Transfer of Servicing and on Custodial Accounts, and to be aware of any obligations of the Transferor Servicer under the Purchase Documents and any alternative to foreclosure, whether offered and outstanding or currently in place with a Borrower. The Transferee Servicer's due diligence efforts should include, but are not limited to, a review of the following information that the Transferor Servicer may provide:

Reports and data that confirm and support information provided by the Transferor Servicer
Pertinent reports prepared by internal or external auditors, including any recently completed Freddie Mac audit

The Transferee Servicer should consider adopting the best practices set forth in the Servicing Transfer Best Practices document published at www.freddiemac.com/singlefamily/pdf/tos_best_practices.pdf. Upon request, the Transferee Servicer must provide to Freddie Mac the post-transfer review results.

The Transferor Servicer may not provide a copy of its Servicer Success Scorecard to the Transferee Servicer without Freddie Mac's prior written approval.