7101.2: Submitting requests for Transfers of Servicing and Intra-Servicer Portfolio Moves (10/31/18)

© Freddie Mac Single-Family Seller Servicer Guide

The Transferor Servicer and Transferee Servicer must obtain Freddie Mac's written approval of each Transfer of Servicing request before the transfer takes place. In the event the Transferee Servicer is going to establish a subservicing arrangement with a new Servicing Agent, the Transferee Servicer and its proposed Servicing Agent must comply with the requirements of Chapter 8101, including submitting a complete and fully-executed Form 479A, Single-Family Servicing Agent Certification and Agreement.

Freddie Mac's prior written approval is required, regardless of whether the Transfer of Servicing is initiated or requested by a Servicer or any other party, such as a conservator, receiver or liquidator of the Servicer.

On or before the Effective Date of Transfer, the Transferor Servicer must provide to the Transferee Servicer copies of:

All of the Transferor Servicer's Purchase Documents applicable to the Transfer of Servicing (excluding any Credit Fees in Yield and Credit Fees in Price); and
All of the Purchase Documents of any preceding Transferor Servicer that are applicable to the Transfer of Servicing (excluding any Credit Fees in Yield and Credit Fees in Price)

For Transfers of Servicing with an Effective Date of Transfer prior to April 11, 2018, Transferor Servicers must provide such Purchase Documents to a Transferee Servicer upon such Servicer's written request.

(a) Concurrent Transfers of Servicing For a Concurrent Transfer of Servicing, the Transferor Servicer must obtain Freddie Mac's approval of the Transfer of Servicing before entering into Pricing Identifier Terms or other Purchase Contracts to sell the Mortgages to Freddie Mac. Freddie Mac will monitor the financial condition and performance of the Transferor Servicer (Seller) and the Transferee Servicer and may, in its discretion, rescind or suspend approval of the Concurrent Transfer of Servicing. The Transferor Servicer and Transferee Servicer must complete Form 960, Agreement for Concurrent Transfer of Servicing of Single-Family Mortgages. A separate Form 960 is required for each Transferee Servicer. The fully executed Form 960 must be submitted to Freddie Mac (see Directory 3).Freddie Mac will indicate approval, if appropriate, by executing and returning a copy of Form 960 to the Transferor Servicer and Transferee Servicer. Freddie Mac's approval of the transfer is effective for Mortgages delivered on or after the date Freddie Mac executes Form 960. The Form 960 will expire on the expiration date the Transferor Servicer enters on Form 960. If no expiration date is entered, the Form 960 will remain in effect until Freddie Mac, the Transferor Servicer or the Transferee Servicer terminate the Form 960.The Transferor Servicer or Transferee Servicer may terminate the Form 960 by first providing notice to the other (Transferor Servicer or Transferee Servicer as applicable) and then provide written notice to Freddie Mac (see Directory 3) at least five Business Days prior to the requested termination date. In instances where a Transferor Servicer submits multiple Concurrent Transfer of Servicing requests, Freddie Mac's approval does not constitute approval to exceed the amount of the Transferor Servicer's applicable Commitment Amount. Freddie Mac will provide to the Transferee Servicer a funding detail report, which may be shared with the Transferee Servicer to aid it in preparing Servicing and accounting reports. A Seller/Transferor Servicer may select only one Transferee Servicer for a given Purchase Contract. The requirements for a Concurrent Transfer of Servicing of Mortgages sold to Freddie Mac through Cash-Released XChangeSMare contained in Exhibit 28A, Loan Servicing Purchase and Sale Agreement for Cash-Released XChangeSM. All other Concurrent Transfers of Servicing must follow the requirements in this chapter.

(b) Subsequent Transfers of Servicing

(i) Process At least 45 days but not more than 60 days before the requested Effective Date of Transfer for a Subsequent Transfer of Servicing, the Transferor Servicer must log into the Freddie Mac Service Loans application, go to the "Manage Portfolio" tab and select "Create a new STOS" request. The Transferor Servicer must complete all fields and respond to all questions designated to be completed by the Transferor Servicer, including selecting the Transferee Servicer. In addition, at least 45 days but not more than 60 days before the requested Effective Date of Transfer, the Transferor Servicer must submit the list of the Mortgages that are related to the Transfer of Servicing (the "Proposed Mortgage List") through the Service Loans application. Freddie Mac will notify the prospective Transferee Servicer of the requested Transfer of Servicing by e-mail using the e-mail address supplied by the Transferor Servicer in the Service Loans application. The Transferee Servicer must log into the Service Loans application, go to the "Manage Portfolio" tab and select the Transfer of Servicing transaction that was proposed by the Transferor Servicer. The Transferee Servicer must complete all fields designated to be completed by the Transferee Servicer for the proposed Transfer of Servicing. Freddie Mac will provide the Transferor Servicer and Transferee Servicer with additional data related to the Proposed Mortgage List and populate the responses to certain questions based on data in Freddie Mac systems that was previously supplied to Freddie Mac (e.g., by the Seller, prior Servicer or the Transferor Servicer). The Transferor Servicer must validate the accuracy and completeness of all data, the responses to all the questions, and the content of the Proposed Mortgage List. Once all required fields are completed by both the Transferor Servicer and the Transferee Servicer and the Proposed Mortgage List is submitted, the Service Loans application will provide the Transferor Servicer and Transferee Servicer the opportunity to review an electronic Agreement for Subsequent Transfer of Servicing of Single-Family Mortgages ("STOS Agreement") , which must be electronically signed by both Servicers, at least 45 days but not more than 60 days before the requested Effective Date of Transfer. The Transferor Servicer will have the capability to add or remove Mortgages from the Proposed Mortgage List and revalidate the responses to the various questions to ensure they remain accurate in light of the added or removed Mortgages up until eight days prior to the Effective Date of Transfer. In addition, Freddie Mac may require the Transferor Servicer to make changes to the Proposed Mortgage List. The Transferor Servicer and Transferee Servicer must agree on the final list of Mortgages related to the Transfer of Servicing no later than the Effective Date of Transfer ("Final Mortgage List") and, in the event there were changes to the Proposed Mortgage List, the Servicers must electronically execute a new STOS Agreement related to the Final Mortgage List no later than eight days prior to the Effective Date of Transfer. If there are no changes to the Proposed Mortgage List, then such list is the Final Mortgage List and the Servicers are not required to electronically execute a new STOS Agreement. The Servicing Contract Rights related to any Mortgage with the following characteristics as of the day prior to the Effective Date of Transfer are not subject to any Transfer of Servicing notwithstanding the inclusion of such Mortgage's loan number on the Final Mortgage List:

Any Mortgage that has been paid off, and
Any Mortgage that is a guaranteed or insured by the FHA or VA and has a scheduled foreclosure sale date

(ii) Approval and execution Upon Freddie Mac's approval of the Transfer of Servicing, Freddie Mac will notify the Transferor Servicer and Transferee Servicer of Freddie Mac's approval in writing and the Service Loans application status for the proposed Transfer of Servicing will change to an "approved" status. Freddie Mac reserves the right to withdraw its approval of the Transfer of Servicing at any time prior to the Effective Date of Transfer in the event the Servicer makes any changes to the Proposed Mortgage List, other than removal of Mortgages, or there is an intervening event that impacts the continuing eligibility of either Servicer to engage in the Transfer of Servicing (e.g., bankruptcy, regulatory prohibition, etc.). Provided Freddie Mac does not withdraw its approval, on or before the Effective Date of Transfer, Freddie Mac will electronically sign the STOS Agreement acknowledging its earlier approval for the Servicers to proceed with the Transfer of Servicing on the first Business Day of the month following the Effective Date of Transfer. Prior to its electronic execution of the STOS Agreement, the Transferor Servicer must provide to the Transferee Servicer any and all data related to each Mortgage set forth in the Final Mortgage List, including the underlying data related to each such Mortgage for those questions that the Transferor Servicer answered and/or validated "yes" as the appropriate response in the Service Loans application. Specifically, the Transferor Servicer must inform the Transferee Servicer of each REO related to the Transfer of Servicing and, with respect to each Mortgage related to the Transfer of Servicing, specify by Freddie Mac loan number whether the Mortgage:

Has lender-purchased mortgage insurance and the terms of such insurance
Is subject to a credit enhancement and the type of such enhancement, if any
Is subject to a Trial Period Plan or mortgage modification and type of program for each (e.g., Home Affordable Modification ProgramSM(HAMP®), Freddie Mac Standard Modification, Freddie Mac Streamlined Modification, Freddie Mac Flex Modification®, etc.)
Is or may become a Senior Subordinate Mortgage and in this instance, advise the Transferee Servicer of the Servicing Requirements set forth in Chapter 8601
Has any of the following characteristics and provide the data related to such characteristic:

Step-rate
Actual/actual remitting obligation
Partial principal forbearance
Originated pursuant to an affordable housing initiative
Secured by a Manufactured Home
Transfer of Servicing is restricted under a negotiated term of business
Payment cap or option ARMs, or
Biweekly payments

Has a specific remittance option, and the type of remittance option
Has a repurchase or remedy demand in any status; and/or
Has a note that is an Electronic Note or was modified electronically pursuant to Freddie Mac's HAMP electronic modification requirements and in this case, name the repository holding such Electronic Note or Electronic modification agreement (the word "Electronic" in this instance has the meaning set forth in Section 1401.2).

Prior to electronically executing the STOS Agreement, the Transferee Servicer must conduct due diligence on each Mortgage to be transferred to ensure that it has received all relevant data pertaining to each Mortgage and, based on that information, determine that it has the operational capacity and capability to service each such Mortgage.

(iii) Electronic Signature Process Servicers engaging in a Subsequent Transfer of Servicing must comply with the Service Loans application electronic signature process. A Servicer's completion of all required fields, validation of the answers to all questions set forth in the Service Loans application related to the Final Mortgage List, and the Servicer's electronic execution and submission of the STOS Agreement in accordance with this chapter and any additional requirements set forth in the Service Loans application or the Service Loans User Guide is an Eligible Electronic Transaction as defined in Section 1401.2. In addition, the fully executed STOS Agreement is a Purchase Document. Each Servicer engaging in a Subsequent Transfer of Servicing must electronically sign the STOS Agreement and submit it to Freddie Mac via the Service Loans application as an Electronic Record with its respective duly authorized employees' Electronic Signatures attached to or logically associated with such Electronic Record. Freddie Mac will acknowledge its approval, if granted, by electronically signing the STOS Agreement in the Service Loans application and will notify both the Transferor Servicer and the Transferee Servicer of such approval and the availability of the fully-executed STOS Agreement in the Service Loans application. The Transferor Servicer and the Transferee Servicer each must download and retain the fully-executed STOS Agreement and Final Mortgage List in their respective Servicing systems.

(c) Denied Transfer of Servicing requests Freddie Mac reserves the right to deny a Transfer of Servicing request. Freddie Mac may provide the Transferor Servicer written notice of the denial, but is not obligated to provide a written notice explaining the reason for denial.

(d) Freddie Mac's rights

(i) Unauthorized Transfer of Servicing Any unauthorized assignment and assumption of Servicing constitutes grounds for suspension or disqualification of both the unauthorized Transferor Servicer and purported Transferee Servicer as Seller/Servicers. In addition, Freddie Mac may exercise any of its other rights under the Purchase Documents. An unauthorized Servicer's assignment and/or sale of any or all of its Servicing Contract Rights without Freddie Mac's prior written approval will result in the assessment of a compensatory fee determined by Freddie Mac not to exceed 1% of Freddie Mac's share of the UPB of the Mortgages that were related to the unauthorized Transfer of Servicing. The imposition of this compensatory fee does not limit Freddie Mac's rights to exercise any of its other rights under the Purchase Documents including, but not limited to, suspension or disqualification of both the unauthorized Transferor Servicer and purported Transferee Servicer as Seller/Servicers. If an unauthorized assignment and/or sale of Servicing Contract Rights occurs, the unauthorized Transferor Servicer and purported Transferee Servicer are jointly and severally liable to Freddie Mac with respect to any losses, costs and damages (including, but not limited to, attorney fees and related court and legal costs) incurred by Freddie Mac arising out of or related to the unauthorized assignment and/or sale of Servicing Contract Rights.

(ii) Post-transfer reviews Freddie Mac may perform a post-transfer review of any approved Transfer of Servicing, which may include onsite visits, to determine whether the Transferor Servicer and Transferee Servicer complied with the requirements of the Guide and applicable Purchase Documents. Freddie Mac may also request the Servicer to perform a post-transfer review and provide documentation of such review.

(e) Intra-Servicer Portfolio Move Request for Servicing of Single-Family Mortgages Certain Servicers have been allocated two or more Seller/Servicer numbers with respect to specific Mortgages that they service for Freddie Mac. If a Servicer wishes to consolidate or reallocate the loan numbers attributable to one of its Seller/Servicer numbers to another of its Seller/Servicer numbers (the "New Seller/Servicer Number") (an "Intra-Servicer Portfolio Move"), the Servicer must submit an Intra-Servicer Portfolio Move Request for Servicing of Single-Family Mortgages and a list of such Mortgages via the Service Loans application, and obtain Freddie Mac's prior approval by undertaking the following steps:

At least 30 days, but not more than 60 days, prior to the requested effective date of change, log into Service Loans application, go to the "Manage Portfolio" tab, select "Create New Request" and then and select "Intra-Servicer Portfolio Move Request"
Complete all questions designated to be completed by the Servicer
Submit the list of Mortgages related to the change in Seller/Servicer number
Sign the Intra-Servicer Portfolio Move Request to acknowledge the terms and conditions associated with the change in Seller/Servicer number

Upon receipt of the Intra-Servicer Portfolio Move Request and the list of related Mortgages, Freddie Mac will review the list to ensure that the Servicing of such Mortgages may be reallocated to the New Seller/Servicer Number. Upon Freddie Mac's approval, the Seller/Servicer number associated with the Mortgages will change in Freddie Mac's systems as of the requested effective date of change and the Servicer must make corresponding changes in its systems as of the same date. An approved Intra-Servicer Portfolio Move does not result in any change to the rights, liabilities and obligations the Servicer owes towards Freddie Mac under the Purchase Documents.

Once the Servicer receives Freddie Mac's written approval, the Servicer must inform its Document Custodian of the New Seller/Servicer Number attributable to the related Mortgages.

Servicers must also ensure that Principal and Interest Payments and Escrow Funds received from Mortgages related to the Intra-Servicer Portfolio Move Request are deposited in the Custodial Account associated with the New Seller/Servicer Number. See Section 8302.1 for more information.