© Freddie Mac Single-Family Seller Servicer Guide
Under various federal, State and local laws, a law enforcement agency may, in some circumstances, seize and cause the forfeiture of real property that is obtained with the proceeds of activities, or which is used to facilitate activities, committed in violation of federal, State or local laws. Such laws include those relating to controlled substances, gambling and prostitution. Actions that result in the loss of possession of real property by a legal action or process are called property seizures. These different laws commonly provide some avenue of relief from forfeiture for a mortgagee that can prove it is an "innocent owner" (or "innocent lienholder").
An important course of action in protecting the mortgagee's innocent owner status is prompt and cooperative communication with law enforcement agencies.
(a) The Servicer's designee for contacts with law enforcement agencies To properly handle the sensitive area of mortgagee-law enforcement agency cooperation, and maximize mutual benefits from such cooperation, the Servicer must limit contacts with, or from, law enforcement agencies to a designated management-level employee that the Servicer selects. The Servicer must alert its employees to direct all information regarding a property seizure to the appropriate designee, including, but not limited to, the following:1. Unsolicited information
2. Government notices
3. Government or other third-party inquiries
4. Telephone calls or written correspondence
(b) Documentation The management level employee selected as the Servicer's designee to handle a property seizure must:1. Maintain complete, detailed and accurate records of:- All information received, relayed or reported, including (where applicable) the names of all contacting and contacted parties
- All actions taken by the Servicer
- The dates of all contacts and actions
2. Confirm in writing communications with Freddie Mac and appropriate law enforcement agencies
3. Deliver the original Mortgage file to Freddie Mac (see Directory 5) when and if Freddie Mac requests the Servicer to do so
(c) Restriction on foreclosure action The Servicer must contact Freddie Mac to request approval to initiate foreclosure (see Directory 5).
(d) Applicability of requirements The requirements in Sections 8402.1 through 8402.6 address forfeitures arising from violations of federal, State or local laws specified in Section 8402.1(a). However, all of these requirements also extend to government seizure and forfeiture of the property for the Borrower's violation of any other laws.Refer to Section 9401.2 for Freddie Mac rights when the requirements of this section and sections 8402.2 through 8402.6 regarding government seizure and forfeiture of the property are not met.