7101.9: Document custody requirements for Transfers of Servicing (08/13/18)

© Freddie Mac Single-Family Seller Servicer Guide

(a) Concurrent Transfers of Servicing For a Concurrent Transfer of Servicing (other than for Mortgages sold servicing released) to occur, a Seller must submit Form 960, Agreement for Concurrent Transfer of Servicing of Single-Family Mortgages, to Freddie Mac for approval as described in Section 7101.2(a). The Seller will deliver the Mortgage to the Servicer's Document Custodian to perform the certifications required in Sections 6301.8(a) and 6304.3(b) and, on the Settlement Date and concurrent with Freddie Mac's purchase of the Mortgage, Servicing for the Mortgage will transfer to the Servicer as Transferee Servicer. The Seller must cooperate with the Servicer and its Document Custodian to affect a smooth and orderly Concurrent Transfer of Servicing. There is a Concurrent Transfer of Servicing to a Servicer selected by Freddie Mac for all Mortgages sold through Cash-Released XChangeSM as described in Sections 6101.7 and 7101.2(a). The Seller must establish a contractual relationship with The Bank of New York Mellon Trust Company, N.A. as Designated Custodian (see Directory 4) in accordance with requirements of Section 2202.3(b) prior to delivering such Mortgages for sale to Freddie Mac. For each Concurrent Transfer of Servicing,

• The Seller must:
  • Verify that the Servicer's Document Custodian has a contractual relationship with the Servicer as evidenced by a copy of their executed Tri-Party Agreement
  • Deliver the Notes with related documents and all assignments, together with the Form 1034E, Custodian Certification Schedule, or the Note Delivery Cover Sheet, to the Servicer's Document Custodian
  • Verify that all Mortgages registered and assigned to MERS®, and all Mortgages closed with MERS as the original mortgagee of record, are identified as such. Refer to Section 6301.6 for additional requirements for these Mortgages.
• The Document Custodian must:
  • Review the Mortgage documents and information as required by Section 6304.3(b) and, for Mortgages other than Mortgages sold servicing release, verify that a copy of Form 960 evidencing Freddie Mac's approval of the Transfer of Servicing accompanies the Note and assignments
  • Complete the certification of the Mortgages in Loan Selling AdvisorSM
  • Update its document tracking system in accordance with the requirements in Section 2202.2(b)

(b) Responsibilities for Subsequent Transfers of Servicing The Transferor Servicer's Document Custodian must cooperate with the Transferee Servicer's Document Custodian to affect a smooth and orderly transfer.

• No later than 30 days after the Effective Date of Transfer, the Transferor Servicer's Document Custodian must:
  • Work with the Transferor and the Transferee Servicers, the Transferee Servicer's Document Custodian and Freddie Mac to cure all document deficiencies prior to recertification of the Notes
  • Verify that the Transferee Servicer's Document Custodian has been selected by the Transferee Servicer in accordance with Freddie Mac's requirements and that a copy of the Transferee Servicer's executed Tri-Party Agreement, "STOS Agreement" and Final Mortgage List, as those terms are defined in Section 7101.2(b), accompany the Transferor Servicer's request to transfer custody of the Notes and assignments to the Transferee Servicer's Document Custodian
  • Deliver to the Transferee Servicer's Document Custodian the Notes with related documents, all assignments in its custody and Form 1034T, Subsequent Transfer Document Custodial Certification Schedule. Notes and related documents may be transported only by a nationally recognized commercial or bonded carrier or courier service.
  • Ensure that all Mortgages registered and assigned to MERS and all Mortgages closed with MERS as the original mortgagee of record are identified as such

See Section 2202.6 for information on Transfer of Custody.

• The Transferee Servicer's Document Custodian must:
  • Have a Tri-Party Agreement in effect with the Transferee Servicer in accordance with Section 2202.3
  • The Transferee Servicer's Document Custodian must perform the verifications specified in Section 6304.3(a) with respect to each Note and assignment for which custody is being transferred, and must execute the Form 1034T as required by this section; however, upon a Subsequent Transfer of Servicing, the Transferee Servicer's Document Custodian need verify only that the following information on the Note matches the corresponding information about the related Mortgage contained on the Form 1034T:
    • Freddie Mac loan number, if present on the Note; otherwise, the Document Custodian must validate the Freddie Mac loan number against data in electronic files or records provided by the Transferee Servicer
    • Borrower's name, and
    • Property address (excluding zip code)
  • Verify that a copy of the STOS Agreement, evidencing Freddie Mac's approval of the Transfer of Servicing and Final Mortgage List accompanies the transfer of custody of Notes with related documents and all assignments
  • On behalf of itself and the Transferee Servicer complete, execute and deliver the Form 1034T to Freddie Mac (see Directory 9)no later than 180 days after the Effective Date of Transfer. By submitting the Form 1034T to Freddie Mac, the Transferee Servicer and the Transferee Servicer's Document Custodian represent and warrant to Freddie Mac that they have made the certifications contained in the Form 1034T, and that each of them is bound by the information and certifications contained in the Form 1034T.
  • Retain the Form 1034T for at least three months from the date the certification is completed. See Section 8107.2(d)for information on imaging and retention.
  • Update its document tracking system
• Transfers of Servicing without a transfer of custody
  • The Transferor Servicer must:
    • Prepare and execute the Form 1034T
    • Prepare an assignment to the Transferee Servicer, which must be recorded and certified, unless the Mortgage is registered to MERS and the Transferee Servicer is a MERS member
    • Deliver the executed Form 1034T and the assignment to the Transferee Servicer's Document Custodian no later than 30 days after the Effective Date of Transfer
  • The Transferee Servicer's Document Custodian must:
    • Remove from the Mortgage file and destroy any recordable but unrecorded assignment, if prepared, from the Transferor Servicer to Freddie Mac
    • Execute Form 1034T on behalf of the Transferee Servicer and send a copy to Freddie Mac (see Directory 9)no later than 180 days after the Effective Date of Transfer
    • Retain the original or an imaged copy of the Form 1034T for at least three months from the date the certification is completed. See Section 8107.2(d) for information on imaging and retention.
  • The Transferee Servicer:
    • If it has elected to hold assignments for MERS-registered Mortgages in the Mortgage files, must provide the Document Custodian with documentation of that election. See Section 6304.1.
    • Is responsible for all representations and warranties with respect to the validity and enforceability of the Mortgage documents