Freddie Mac Single-Family Seller/Servicer Guide 1101.2 — Legal effect of the Guide and other Purchase Documents
Freddie Mac Single-Family Seller/Servicer Guide section 1101.2 — Legal effect of the Guide and other Purchase Documents. Full verbatim section text, substring-verified against snapshot 5869ee9e606cd4ae.
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Verbatim provisions from Freddie Mac Single-Family Seller/Servicer Guide 1101.2 — Legal effect of the Guide and other Purchase Documents — each quote is a verified substring of the regulator-published source snapshot, not retyped. Quoted for reference; this is not legal advice. The operational layer (P&P updates, prompts) lives in the regulation update kits.
Freddie Mac Single-Family Seller/Servicer Guide 1101.2 — Legal effect of the Guide and other Purchase Documents
13 sections · 47,919 characters of verbatim text. Open a section to read it, or . Every section below is in the page source whether open or closed.
§This section contains requirements related to: ■ Status of the…342 ch
This section contains requirements related to: ■ Status of the Guide as a contract ■ Reliance upon the advice of counsel ■ Assignments; security interests ■ Freddie Mac and Seller/Servicer notice exchange ■ Severability ■ Defined terms ■ Construction of the Guide ■ Entire agreement ■ Governing law ■ Copyright ■ Headings and design features
aStatus of the Guide as a contract (i) Effect of the Guide and…9,373 ch
(a) Status of the Guide as a contract (i) Effect of the Guide and other Purchase Documents The Guide governs the business relationship between a Seller/Servicer and Freddie Mac relating to the sale of Mortgages to, and Servicing of such Mortgages for, Freddie Mac. Each Seller/Servicer must complete and submit an Annual Certification Report (as described in Section 2101.10) that certifies that the Seller/Servicer has access to the Guide and complies with all requirements of the Purchase Documents. In connection with the sale of a Mortgage or pool of Mortgages to Freddie Mac, the Seller/Servicer: ■ Agrees that each transaction is governed by the Guide, the applicable Purchase Contract and all other Purchase Documents, and ■ Makes all appliable representations and warranties to, and agreements and covenants with, Freddie Mac as set forth in the Purchase Documents Regardless of the Servicing option selected upon a sale of Mortgages to Freddie Mac, a Seller/Servicer agrees to service all such Mortgages that the Seller/Servicer has sold to Freddie Mac in accordance with the requirements set forth in the Seller/Servicer’s Purchase Documents. As set forth in Section 7101.1(b) and the applicable Transfer of Servicing agreement, each Transferee Servicer agrees to service all Mortgages related to a Transfer of Servicing in accordance with the requirements set forth in the Transferee Servicer’s Purchase Documents. All of a Seller/Servicer’s obligations to service Mortgages for Freddie Mac constitute, and must be performed pursuant to, the Servicing Contract, and the Servicing obligations assumed pursuant to any contract to sell Mortgages to Freddie Mac are merged into and must be performed pursuant to such Servicing Contract. Upon the Settlement Date of the sale of a Mortgage (or group of Mortgages) to Freddie Mac, or the Effective Date of Transfer of any Transfer of Servicing, the Seller/Servicer or Transferee Servicer agrees that the Servicing Contract and related Servicing Contracts Rights that are the subject of a Concurrent or Subsequent Transfer of Servicing, as well as any proceeds to be paid to the Seller/Servicer as Transferor Servicer for such Transfer of Servicing, are subject to the Lien as defined in Section 1101.2(c). A Seller/Servicer acknowledges that Freddie Mac’s agreement to purchase Mortgages from the Seller/Servicer pursuant to any individual Purchase Contract is based upon the Seller/Servicer’s agreement that the Mortgages purchased will be serviced by such Seller/Servicer pursuant to the Servicing Contract, which Servicing Contract and related Servicing Contract Rights may be assigned to another Servicer pursuant to a Transfer of Servicing, subject to obtaining Freddie Mac’s prior written approval as set forth in Chapter 7101. The following summarizes the legal and accounting treatment of Servicing Contract Rights, including their non-ownership and implications for contract breaches with Freddie Mac: ■ Under no circumstance does a Seller/Servicer retain any legal ownership of the Servicing Contract or any related Servicing Contract Rights ■ Freddie Mac acknowledges that a Seller/Servicer may recognize Servicing Contract Rights as assets on its balance sheet in the form of “mortgage servicing rights” in accordance with generally accepted accounting principles (GAAP); however, such recognition as under GAAP does not confer to a Seller/Servicer any legal ownership interest in any Servicing Contract Rights ■ The Seller/Servicer agrees that any failure to service any Mortgage in accordance with the terms of the Servicing Contract, or any breach of any of the Seller/Servicer’s obligations under any aspect of the Servicing Contract, shall be deemed to constitute a breach of the entire contract and shall entitle Freddie Mac to terminate all or a portion of the Servicing Contract and any related Servicing Contract Rights ■ The termination of a portion of the Servicing Contract shall not alter the unitary, indivisible nature of the Servicing Contract If a Servicer that services Mortgages for Freddie Mac is not also the Seller of the Mortgages to Freddie Mac, the Servicer must agree to service Mortgages for Freddie Mac by separate agreement (e.g., Form 960, Agreement for Concurrent Transfer of Servicing of Single-Family Mortgages, or Electronic Agreement for Subsequent Transfer of Servicing of Single-Family Mortgages (STOS Agreement)), which incorporates the applicable Purchase Documents. In such case, the separate agreement shall be deemed to be one of the “Purchase Documents” that constitute the Servicing Contract. In addition, in certain cases, a Seller and/or Servicer who uses certain Freddie Mac services will, by virtue of the provisions of the Guide, be deemed to have agreed upon certain terms and conditions related to such services and their use. (ii) Amendments to the Guide Freddie Mac may, in its sole discretion, amend or supplement the Guide from time to time. Amendments to the Guide may be a paper Record or an Electronic Record, as those terms are defined in Chapter 1401. The Guide may not be amended orally. Freddie Mac may amend the Guide by: ■ Publishing Bulletins (applicable to all Sellers/Servicers), or ■ Entering into a Purchase Contract or other written or Electronic agreement applicable only to the Seller/Servicer that is a party to the Purchase Contract or agreement Bulletins expressly amend, supplement, revise or terminate specific provisions of the Guide. An amendment, supplement, revision or termination of a provision in the Guide is effective as of the date specified by Freddie Mac in the applicable Bulletin. A Purchase Contract or other written agreement or Electronic agreement amends or supplements specific provisions of the Guide for purposes of such Purchase Contract or other agreement, as applicable. Such amendments or supplements to the Guide are effective as of the date specified in the Purchase Contract or other agreement. Refer to the following Guide provisions for additional information related to amendments to the Guide: Other Guide provisions related to amendments to the Guide Guide provision Guide location Seller’s Purchase Contracts and Purchase Documents Section 1501.1(b)(iv) Servicer agreements Section 1301.4(c) Freddie Mac rights Section 9102.1(f) (iii)Publication of Guide and Bulletins The Guide is posted on the AllRegs® website of ICE Mortgage Technology, Inc., which operates the AllRegs brand (“AllRegs”) and which posts the Guide under license from and with the express permission of Freddie Mac. AllRegs is the exclusive third-party electronic publisher of the Guide. Seller/Servicers also can access the Guide on the AllRegs website by using the link on FreddieMac.com. Freddie Mac makes no representation or warranty regarding availability, features or functionality of the AllRegs website. By using the website, Seller/Servicers acknowledge and agree (individually and on behalf of the entity for which they access the Guide) that neither Freddie Mac nor AllRegs shall be liable to them (or the entity for which they access the Guide) for: ■ Any Claims whatsoever resulting directly or indirectly from Freddie Mac’s designation of the Guide as found on the AllRegs website as the official Electronic version, as an Electronic Record ■ The results to be obtained by Seller/Servicers (and the entity for which Seller/Servicers access the Guide) from use of the AllRegs website ■ Any damages arising directly or indirectly out of the use of the AllRegs website by them (and the entity for which they access the Guide) Seller/Servicers may use the Guide in structured or data-driven formats (including, without limitation, application programming interfaces, JavaScript Object Notation, Microsoft® Excel, artificial intelligence, machine learning tools or other technological capabilities) to support their internal business processes. Notwithstanding such use, Seller/Servicers remain responsible for compliance with the official Guide as published on AllRegs. Freddie Mac disclaims all liability associated with such use by Seller/Servicers, and Seller/Servicers agree that Freddie Mac shall have no liability arising from such use by Seller/Servicers. Bulletins are published on AllRegs and FreddieMac.com. A Seller/Servicer with an AllRegs subscription may receive notice of Bulletins directly from AllRegs. If a Seller/Servicer does not receive notice of Bulletins through AllRegs, the Seller/Servicer must take the steps necessary to receive the applicable Freddie Mac Single-Family Update e-mails, which will notify the Seller/Servicer of Bulletin publications. Seller/Servicers who do not engage with Single-Family Update e-mails—by opening or clicking any content—at least once every six months will be removed from the subscriber list and must re-engage, which could include opening an e-mail, clicking a link within an e-mail or navigating to the Single-Family subscription center to update preferences to resume receiving notifications. Note: A Seller/Servicer’s failure to take the appropriate steps to receive notices of Bulletins does not relieve the Seller/Servicer of its legal obligations to comply with the terms of the Bulletins. (iv) Effective date The effective date of each section of the Guide is located at the beginning of each section, to the right of the section number and name.
bReliance upon the advice of counsel By entering into a Purchase…698 ch
(b) Reliance upon the advice of counsel By entering into a Purchase Contract or into the Servicing Contract with Freddie Mac (e.g., in connection with the sale of Mortgages to Freddie Mac or a Concurrent or Subsequent Transfer of Servicing), the Seller/Servicer acknowledges that: ■ It is not relying upon Freddie Mac or any employee, agent or representative thereof, in making its decision to enter into the contract, and ■ It has relied upon the advice and counsel of its own employees, agents and representatives as to the regulatory, business, corporate, tax, accounting and other consequences of entering into and performing its obligations under a Purchase Contract or the Servicing Contract
cAssignments; security interests Except as set forth below, for…11,290 ch
(c) Assignments; security interests Except as set forth below, for purposes of this subsection (c), the following terms have the prescribed meanings set forth below or in Exhibit 33A, Acknowledgment Agreement Incorporated Provisions, Exhibit 33B, Acknowledgment Agreement (Syndication) Incorporated Provisions, Exhibit 33C, Acknowledgment Agreement (Cashflow) Incorporated Provisions, or Exhibit 33D, Acknowledgment Agreement (Combination) Incorporated Provisions, as applicable, notwithstanding that a Seller/Servicer may not have executed and delivered an Acknowledgment Agreement to Freddie Mac: ■ Acknowledgment Agreement ■ Collateral ■ Conveyance: Means any assignment, sale, hypothecation, pledge or transfer of, or grant of a security interest in, or through any other method that is intended to convey any or all the obligations, rights or interests of a Seller/Servicer, whether in whole or in part, under (or derived from) any Purchase Contract, Servicing Contract or any rights or obligations under the Guide or any of Seller/Servicer’s Purchase Documents or proceeds derived therefrom, to another Person ■ Covered Mortgages ■ Default: Means any misrepresentation or breach of warranty or the failure to observe or perform any covenant or agreement (after the passage of an applicable cure period or the giving of notice to any party, but only to the extent expressly provided in the Guide or any other Purchase Document) in favor of Freddie Mac in the Guide, any other Purchase Document or the Servicing Contract ■ Freddie Mac Collateral: Means all of Seller/Servicer’s right and interest in, to and under all of the following, whether now or hereafter owned, held or acquired and wherever located: ❑ The Servicing Contract, including the Servicing Contract Rights ❑ All books, correspondence, files, data and records, including computer disks and other records or physical or virtual data or information, related to the foregoing (but excluding computer programs); and ❑ All monies due or to become due to Seller/Servicer relating to any of the foregoing, including, but not limited to, all cashflows derived from the foregoing and all proceeds relating to any of the foregoing ■ Financing ■ Financing Documents ■ Lien: Means any lien, pledge, grant, charge, security interest, security title, Mortgage, hypothecation, option or preferential arrangement which has the practical effect of constituting a security interest or encumbrance or servitude of any kind in respect of any interest or asset to secure or assure payment of any indebtedness or other obligations, including any guaranty, whether by consensual agreement or by operation of statute or other law, or by any agreement, contingent or otherwise, to provide any of the foregoing ■ Person ■ Secured Obligations: Means (i) each and every representation, warranty, covenant and agreement of Seller/Servicer set forth in the Guide, any other Purchase Document and the Servicing Contract, and (ii) FRE Claims ■ UCC (i) General prohibition The Servicer shall not suffer, cause or permit a direct or indirect Conveyance without Freddie Mac’s prior express written consent. Any purported or attempted Conveyance without Freddie Mac’s prior written consent is prohibited and shall be null and void. (ii) Servicer request for Freddie Mac’s consent to a Conveyance regarding Financing To request Freddie Mac’s consent to a Conveyance regarding a Financing, a Servicer may send an e-mail to Freddie Mac (see Directory 1) with the following information: 1. Purpose of the Financing 2. Term sheet or draft Financing Documents; and 3. Identification of the Covered Mortgages (e.g., all loans serviced under one or more Seller/Servicer number(s) or a loan list that includes the Freddie Mac loan number, Servicer loan number and Seller/Servicer number for each loan in either CSV format or as an Excel spreadsheet, etc.) Freddie Mac reserves the right to request additional information and documents from the Servicer and its proposed Secured Party (as defined in the Acknowledgment Agreement) concerning the terms and conditions of the Financing. Freddie Mac may require revisions to the Financing Documents and other elements of the Financing as a condition to its consent to the proposed Financing. For an overview of the operational process related to requesting and obtaining Freddie Mac’s consent to a Conveyance regarding Financing, Servicers should review the Process Overview: Financing Freddie Mac Servicing Contract Rights – Process Overview available at https://sf.freddiemac.com/docs/fact-sheet/fre-financing-servicing-contract-rightsprocess-overview-final.pdf (iii) Freddie Mac consent to a Conveyance regarding a Financing Other than a Transfer of Servicing, which requires separate Freddie Mac consent pursuant to Series 7000, or a Seller/Servicer’s grant of security interest to Freddie Mac under Section 1101.2(c)(vi), Freddie Mac will indicate its consent to a Conveyance regarding Financing by executing an Acknowledgment Agreement, which also must be executed by the Servicer and its Secured Party (together with any other parties named therein) in a form and substance acceptable to Freddie Mac. A Servicer’s grant to a Secured Party of a security interest in the Servicing Contract Rights, as more specifically defined in the Acknowledgment Agreement, notwithstanding the date, time, method, manner or order of grant, attachment or perfection of any other liens: ■ Is subject and subordinate in each and every respect to all rights, powers, and prerogatives of Freddie Mac and the first-priority and continuing Lien of Freddie Mac in the Freddie Mac Collateral, and ■ May be made only for a purpose as set forth in Exhibit 33A or Exhibit 33B, as applicable, and any other purpose as specified in the Acknowledgment Agreement Any purported or attempted grant of a security interest in any other rights or interest of the Servicer under the Servicing Contract, or for the purpose of securing any other type of obligation, is prohibited and shall be null and void. In addition, a Servicer’s purported or attempted grant to a lender of a security interest in the Servicing Contract Rights without the Servicer and the lender also having executed an Acknowledgment Agreement acceptable to, and executed by, Freddie Mac is prohibited and shall be null and void. The Collateral encumbered by the Secured Party’s security interest must not include any of the following: ■ Servicing advance reimbursement rights ■ Borrower payments of principal, interest or Escrow Funds ■ The right to perform Servicing ■ The right to designate who may perform the Servicing ■ The right to terminate the Servicer or the Servicing Contract, or ■ The right to transfer any of the Collateral. No Financing transaction shall be construed as a division of the Servicing Contract Rights. A Servicer may make a separate request to Freddie Mac for consent to enter into a financing transaction secured by advance reimbursement rights, defined as an Advance Financing pursuant to Section 9701.5(c) and Exhibit 103, Consent Agreement Incorporated Provisions. In no event shall any Advance Financing be cross-collateralized with any Collateral under any Servicing Contract Rights Financing (as defined in Section 9701.5(c)(iii)). Any Collateral under any Servicing Contract Rights Financing is and will continue to be at all times separate and distinct from any and all collateral under any Advance Financing. (iv) Unauthorized Conveyances Any unauthorized Conveyance constitutes grounds for suspension (to the extent such Secured Party is a Freddie Mac Seller/Servicer) or disqualification of both the Seller/Servicer and the purported Secured Party as Seller/Servicers. In addition, Freddie Mac may exercise any of its other rights under the Purchase Documents. If a Servicer attempts a Conveyance without Freddie Mac’s written consent as set forth in an Acknowledgment Agreement consistent with the requirements of this section and Exhibit 33A or Exhibit 33B, as applicable: ■ Freddie Mac will assess a compensatory fee not to exceed 1% of Freddie Mac’s share of the UPB of the Mortgages that were related to the unauthorized Conveyance ■ 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 (to the extent such Secured Party is a Freddie Mac Seller/Servicer) or disqualification of both the Seller/Servicer and its purported Secured Party as Seller/Servicers If an unauthorized Conveyance occurs, the Servicer and purported Secured Party, to the extent such Secured Party is a Freddie Mac Seller/Servicer, are jointly and severally liable to Freddie Mac with respect to Claims incurred by Freddie Mac arising out of or related to the unauthorized Conveyance. In the event that the Secured Party involved in an unauthorized Conveyance is not a Freddie Mac Seller/Servicer, Freddie Mac reserves the right to add such Secured Party to the Freddie Mac Exclusionary List per Section 3101.1. (v) Freddie Mac’s rights to assign its rights and interests Freddie Mac has the unconditional right to sell, assign, convey, hypothecate, pledge or in any way transfer, in whole or in part, its rights and interest under the Purchase Documents with respect to any Mortgage it purchases. Freddie Mac has the right to direct the Servicer to send remittances, notices, reports and other communications to any party designated by Freddie Mac and may designate any such party to exercise any and all of Freddie Mac’s rights hereunder. (vi) Seller/Servicers grant of a security interest to Freddie Mac Seller/Servicers grant of a security interest to Freddie Mac are as follows: (a) Grant of security interest: Seller/Servicers hold, and may hold in the future, Servicing Contract Rights related to the Servicing Contract it has entered into, and continues to enter into, with Freddie Mac upon the sale of loans to Freddie Mac and/or in connection with the entry into the Servicing Contract and assumption of the Servicing Contract Rights as a Transferee Servicer in connection with a Transfer of Servicing. These provisions become applicable in the following circumstances: ■ Through a Seller’s sale of loans to Freddie Mac through Loan Selling Advisor® ■ When a Transferee Servicer enters into the Servicing Contract and assumption of the Servicing Contract Rights in connection with a Transfer of Servicing, or ■ By virtue of any Servicer’s continuing Servicing of Mortgages due to their access to any Freddie Mac System (as defined in Section 2401.1(b)) via Freddie Mac Gateway (b) Pledge of Servicing Contract Rights: Seller/Servicer pledges its Servicing Contract Rights and the other Freddie Mac Collateral to Freddie Mac as security for the prompt payment and/or performance by Seller/Servicer of the Secured Obligations. (c) Material inducement to Freddie Mac: Seller/Servicer’s agreement to the provisions of this Section 1101.2(c)(vi) is a material inducement to Freddie Mac permitting or continuing to permit the Seller/Servicer to: ■ Sell Mortgages to Freddie Mac under the Purchase Documents ■ Perform Servicing of the Mortgages pursuant to the Servicing Contract, and ■ Generally conduct business with Freddie Mac
dGrant of first-priority Lien: Seller/Servicer pledges,…328 ch
(d) Grant of first-priority Lien: Seller/Servicer pledges, hypothecates, assigns, transfers, sets over and delivers unto Freddie Mac all its right and interest to, and hereby grants to Freddie Mac a first-priority and continuing Lien on, all of Seller/Servicer’s right and interest in, to, and under the Freddie Mac Collateral.
ePurpose of the Lien: The Lien created under this Section…189 ch
(e) Purpose of the Lien: The Lien created under this Section 1101.2(c)(vi) is granted to Freddie Mac to secure the prompt performance and payment in full of all of the Secured Obligations.
fAuthorization for UCC Filings: Seller/Servicer authorizes Freddie…670 ch
(f) Authorization for UCC Filings: Seller/Servicer authorizes Freddie Mac and its designees, attorneys and agents to file (at Seller/Servicer’s expense, at any time, whether such filing has previously occurred or will occur in the future) and in each jurisdiction deemed necessary or appropriate by Freddie Mac, including without limitation, Seller/Servicer’s State of formation, a financing statement naming Seller/Servicer as debtor and Freddie Mac as secured party and describing the Freddie Mac Collateral, (including amendments and continuation statements) to perfect, protect or more fully evidence Freddie Mac’s first-priority Lien in the Freddie Mac Collateral.
gNotice of organizational changes: Seller/Servicer agrees to…678 ch
(g) Notice of organizational changes: Seller/Servicer agrees to promptly notify Freddie Mac in writing of any change in: ■ Its legal name ■ Its identity or type of organization or corporate structure ■ The jurisdiction of its organization, or ■ Seller/Servicer’s chief executive office, principal place of business or location of its books and records relating to the Freddie Mac Collateral In each case, in accordance with the time frames set forth in Section 2101.12, Seller/Servicer agrees to promptly pay the expense of such filings as set forth on invoices to be sent to Seller/Servicer from time to time, and, to the extent not paid, the expenses shall become FRE Claims.
hRequirement for stand-alone pledge agreement: In furtherance of…957 ch
(h) Requirement for stand-alone pledge agreement: In furtherance of this Section 1101.2(c) and the further assurances provided by Seller/Servicer to Freddie Mac pursuant to Section 3601.1, and only if specifically requested by Freddie Mac, Seller/Servicer shall execute and deliver to Freddie Mac, within five (5) Business Days of such request, a standalone pledge and security agreement in the form of Exhibit 105, Pledge and Security Agreement, further evidencing the Seller/Servicer’s grant of a Lien to Freddie Mac in the Freddie Mac Collateral, consistent with purposes of this Section 1101.2(c)(vi), and with such State-specific revisions as necessary as to Seller/Servicer’s jurisdiction of its organization. Notwithstanding the foregoing, any executed pledge and security agreement delivered to Freddie Mac, now or in the future, shall remain enforceable in all respects regardless of whether Freddie Mac specifically requested the document or not.
iFreddie Mac’s appointment as attorney-in-fact; Lien…4,517 ch
(i) Freddie Mac’s appointment as attorney-in-fact; Lien…1,145 ch
(i) Freddie Mac’s appointment as attorney-in-fact; Lien: Seller/Servicer irrevocably constitutes and appoints Freddie Mac, and any officer or agent thereof, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of Seller/Servicer and in the name of Seller/Servicer or in its own name, from time to time in Freddie Mac’s discretion. Without limiting the generality of the foregoing, Seller/Servicer gives Freddie Mac the power and right, on behalf of Seller/Servicer, without assent by, but with notice to, Seller/Servicer, if a Default shall have occurred and be continuing, to do the following: ■ Take possession of and endorse and collect any checks, drafts, notes, acceptances or other instruments for the payment of moneys due with respect to any Freddie Mac Collateral; and ■ File any claim or take any other action or proceeding in any court of law or equity or otherwise deemed appropriate by Freddie Mac for the purpose of collecting any and all such moneys due with respect to any Freddie Mac Collateral whenever payable Additionally, Freddie Mac may:
iDirect any party liable for any payment under any Freddie Mac…201 ch
i. Direct any party liable for any payment under any Freddie Mac Collateral to make payment of any and all moneys due or to become due thereunder directly to Freddie Mac or as Freddie Mac shall direct
iiDemand and collect any and all moneys, claims and other amounts…160 ch
ii. Demand and collect any and all moneys, claims and other amounts due or to become due at any time in respect of or arising out of any Freddie Mac Collateral
iiiTake any and all appropriate action and to execute and deliver…198 ch
iii. Take any and all appropriate action and to execute and deliver any and all documents and instruments that may be necessary or desirable to accomplish the purposes of this Section 1101.2(c)(vi)
ivSign and endorse any invoices, assignments, verifications,…137 ch
iv. Sign and endorse any invoices, assignments, verifications, notices and other documents in connection with any Freddie Mac Collateral
vCommence and prosecute any suits, actions or proceedings at law…249 ch
v. Commence and prosecute any suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect the Freddie Mac Collateral or any part thereof and to enforce any other right in respect of any Freddie Mac Collateral
viIn connection with the above, give such discharges or releases as…108 ch
vi. In connection with the above, give such discharges or releases as Freddie Mac may deem appropriate; and
viiSell, transfer, pledge and make any agreement with respect to or…2,319 ch
vii. Sell, transfer, pledge and make any agreement with respect to or otherwise deal with any of the Freddie Mac Collateral as fully and completely as though Freddie Mac were the absolute owner thereof for all purposes, and to do, at Freddie Mac’s option and Seller/Servicer’s expense, at any time, or from time to time, all acts and things which Freddie Mac deems necessary to protect, preserve or realize upon the Freddie Mac Collateral and the Lien of Freddie Mac thereon and to effect the intent of this Section 1101.2(c)(vi), all as fully and effectively as Seller/Servicer might do In furtherance of the foregoing, Seller/Servicer shall execute and deliver to Freddie Mac, within one (1) Business Day of a request by Freddie Mac, documentation further evidencing the limited power of attorney granted pursuant to this Section 1101.2(c)(vi), in such a form as set forth in Section 14.03 of Exhibit 33A or Exhibit 33B, as applicable, and with such revisions as necessary to be enforceable in the applicable jurisdiction. Seller/Servicer ratifies all that said attorneys shall lawfully do or cause to be done by virtue of this Section 1101.2(c)(vi). The power of attorney is a power coupled with an interest and is irrevocable. Seller/Servicer authorizes Freddie Mac, at any time and from time to time, to execute, in connection with any sale or assignment, as applicable, provided for in this Section 1101.2(c), any endorsements, assignments or other instruments of conveyance or transfer reasonably required with respect to the Freddie Mac Collateral. The powers conferred on Freddie Mac under this Section 1101.2(c)(vi): i. Are solely to protect Freddie Mac’s first-priority Lien in the Freddie Mac Collateral and shall not impose any duty upon Freddie Mac to exercise any such powers. Freddie Mac shall be accountable only for amounts that it receives as a result of the exercise of such powers, and neither Freddie Mac nor any of its officers, directors or employees shall be responsible to Seller/Servicer for any act or failure to act under this Section 1101.2(c)(vi); and ii. Shall be deemed to be in addition to, and shall not limit the scope of, any power of attorney granted by Seller/Servicer to Freddie Mac in the Guide, in connection with any Acknowledgment Agreement or in any other power of attorney
jRemedies for Default of this Section 1101.2: Seller/Servicer…4,701 ch
(j) Remedies for Default of this Section 1101.2: Seller/Servicer agrees upon the occurrence of any Default under this Section 1101.2(c)(vi) that is continuing, Freddie Mac, in addition to all other rights and remedies under the Guide and the other Purchase Documents or otherwise, shall have the right to: ■ Require Seller/Servicer to assemble, at Seller/Servicer’s expense, all of the Freddie Mac Collateral in its possession ■ Exercise all rights and remedies provided under applicable law, which rights shall be cumulative and shall be exercised at Freddie Mac’s sole discretion All actual out-of-pocket costs incurred by Freddie Mac in the collection of Seller/Servicer’s obligations pursuant to this Section 1101.2(c)(vi) and the other Purchase Documents, and the enforcement of its rights under this Section 1101.2(c)(vi), including reasonable attorneys’ fees, court costs and other expenses and the reasonable fees and expenses of accountants, investment banks and any other experts reasonably engaged by Freddie Mac to assist it with the enforcement of remedies under this Section 1101.2(c)(vi), shall be paid out of the Freddie Mac Collateral prior to the payment of any other amounts due as provided in this Section 1101.2(c)(vi). Any sale or assignment, as applicable, of the Freddie Mac Collateral pursuant to applicable law shall be conducted in a commercially reasonable manner and in accordance with applicable law. Seller/Servicer acknowledges to the extent notice of sale or assignment, as applicable, shall be required by applicable law, at least ten (10) calendar days’ notice to Seller/Servicer of the time and place of any public sale or assignment, as applicable, or the time after which any private sale or assignment, as applicable, is to be made shall constitute reasonable notice, but notice given in any other reasonable manner or at any other reasonable time shall also constitute reasonable notification. Seller/Servicer agrees that in any sale or assignment, as applicable, of any of the Freddie Mac Collateral, Freddie Mac is hereby authorized to comply with any limitation or restriction in connection with such sale or assignment, as applicable: (A) As it may be advised by counsel is necessary in order to avoid any violation of applicable law, rule or regulation, the Guide, the other Purchase Documents and/or the Servicing Contract, or (B) In order to obtain any required approval of the sale or assignment, as applicable, or of the purchaser or Transferee Servicer by any governmental authority. Such compliance may include, but is not limited to: ■ Compliance with such procedures as may restrict the number of prospective bidders and purchasers or Transferee Servicers ■ Requiring that such prospective bidders and purchasers or Transferee Servicers have certain qualifications, including, but not limited to, that any potential purchaser or Transferee Servicer be an approved Freddie Mac Single-Family Seller/Servicer; and ■ Restricting prospective bidders and purchasers or Transferee Servicers to Persons who will represent and agree that they are purchasing or assuming for their own account for investment and not with a view to the distribution or resale or reassignment of such Freddie Mac Collateral, as applicable The Seller/Servicer further agrees that such compliance shall not result in such sale or assignment, as applicable, being considered or deemed not to have been made in a commercially reasonable manner. Freddie Mac shall not be liable for any sale or assignment, as applicable, private or public, conducted in accordance with this Section 1101.2(c)(vi). All proceeds from each sale or assignment, as applicable, of, or other realization upon, all or any part of the Freddie Mac Collateral following a Default shall be applied to FRE Claims subject to the payment or reimbursement of Freddie Mac’s out-of-pocket costs as set forth above (with Seller/Servicer being liable for any deficiency) with the balance (if any), paid to whomsoever is entitled thereto in accordance with the terms and provisions of this Section 1101.2(c)(vi) and applicable law. Freddie Mac may, in addition to and not in abrogation of the rights set forth in this Section 1101.2(c)(vi) and the Purchase Documents, proceed by a suit or suits in law or in equity or by any other appropriate proceeding or remedy to either: (A) Specifically enforce payment or the performance of any term, covenant, condition or agreement of this Section 1101.2(c)(vi) or any other right, and/or (B) Pursue any other remedy available to it, all as Freddie Mac determines at its sole discretion Seller/Servicer waives any right to require any marshaling of assets and any similar right.
kRepresentations and warranties: Seller/Servicer represents and…2,746 ch
(k) Representations and warranties: Seller/Servicer represents…103 ch
(k) Representations and warranties: Seller/Servicer represents and warrants to Freddie Mac as follows:
iFormation: Seller/Servicer is duly organized or chartered and…366 ch
i. Formation: Seller/Servicer is duly organized or chartered and validly existing in the State of its formation or validly chartered under applicable federal law. The correct legal name of Seller/Servicer and Seller/Servicer’s place of formation are set forth in Seller/Servicer’s annual certification documents submitted to Freddie Mac pursuant to Section 2101.10.
iiLiens: None of the Freddie Mac Collateral is subject or will be…2,277 ch
ii. Liens: None of the Freddie Mac Collateral is subject or will be subject to any Lien or to any agreement purporting to grant to any third party a security interest or lien in any or all of the Freddie Mac Collateral, except for the Lien granted under this Section 1101.2(c) and the rights of Freddie Mac pursuant to the Guide and the other Purchase Documents, and only to the extent applicable, a grant of a subordinate lien expressly made pursuant to an executed and delivered Acknowledgment Agreement. Seller/Servicer represents and warrants that the Lien in, the pledge of and the assignment and delivery of (if applicable) the Freddie Mac Collateral under this Section 1101.2(c) creates a valid, perfected (upon the filing of a financing statement) first-priority Lien in favor of Freddie Mac in and to the Freddie Mac Collateral. 1. Chief Executive Office: The chief executive office and principal place of business of Seller/Servicer and the location of Seller/Servicer’s books and records relating to the Freddie Mac Collateral have been previously provided to Freddie Mac pursuant to Seller/Servicer’s annual certification documents submitted to Freddie Mac pursuant to Section 2101.10 2. Authority: Seller/Servicer has the requisite organizational power and authority to pledge and grant a Lien in the Freddie Mac Collateral in the manner done or contemplated under this Section 1101.2(c)(vi) 3. No violation: The agreement by Seller/Servicer under, and performance of the Seller/Servicer pursuant to, this Section 1101.2(c)(vi) and the exercise by Freddie Mac of its rights and remedies under this Section 1101.2(c)(vi) do not and will not result in the violation of the organizational documents of Seller/Servicer or any agreement, indenture or instrument, any license, judgement, decree, order, law, statute or other governmental rule or regulation 4. No approval: No consent, filing, approval, registration or recording is required (i) for the pledge by Seller/Servicer of the Freddie Mac Collateral pursuant to this Section 1101.2(c)(vi) or (ii) to perfect the Lien created by this Section 1101.2(c)(vi), except for the filing of a UCC-1 financing statement (which Seller/Servicer consents to such filing by Freddie Mac pursuant to this Section 1101.2(c)(vi))
lCovenants: Seller/Servicer unconditionally covenants and agrees…11,430 ch
(l) Covenants: Seller/Servicer unconditionally covenants and…113 ch
(l) Covenants: Seller/Servicer unconditionally covenants and agrees as follows as to the Freddie Mac Collateral:
iDefending title to Freddie Mac Collateral: Seller/Servicer…289 ch
i. Defending title to Freddie Mac Collateral: Seller/Servicer covenants and agrees, at its sole cost and expense, that it will defend Freddie Mac’s right, title and Lien in and to the Freddie Mac Collateral and the proceeds thereof against the claims and demands of all Persons whomsoever
iiBooks and records: Seller/Servicer shall keep accurate, complete…1,080 ch
ii. Books and records: Seller/Servicer shall keep accurate, complete and adequate books and records relating to the Freddie Mac Collateral, Mortgages, Servicing Contract and Purchase Documents in accordance with the Servicing Contract, the Guide and other Purchase Documents (m)Reimbursement of Freddie Mac: In addition to any other rights to reimbursement provided by this Guide, Seller/Servicer agrees to pay upon demand to Freddie Mac the amount of any and all reasonable expenses, including reasonable attorneys’ fees and the reasonable disbursements and other charges of its counsel and of any experts or agents, that Freddie Mac may incur in connection with: i. The administration of this Section 1101.2(c), including, but not limited to, the actual cost of filing a financing statement in connection with the pledge granted under this Section 1101.2(c) to protect Freddie Mac’s rights in the Freddie Mac Collateral ii. The custody or preservation of, or any sale or assignment, as applicable, of, collection from or other realization upon any of the Freddie Mac Collateral
iiiThe exercise or enforcement of any of the rights of Freddie Mac…124 ch
iii. The exercise or enforcement of any of the rights of Freddie Mac under the Guide and applicable Purchase Documents, and
ivThe failure by Seller/Servicer to perform or observe any of the…9,824 ch
iv. The failure by Seller/Servicer to perform or observe any of…2,716 ch
iv. The failure by Seller/Servicer to perform or observe any of the provisions of this Section 1101.2(c) Any such amounts payable as provided under this Section 1101.2(c) shall be additional Secured Obligations. (n) Indemnification: Seller/Servicer agrees to indemnify and hold Freddie Mac and any entity controlling, controlled by or under common control with Freddie Mac and any officer, attorney, director, shareholder, agent or employee of Freddie Mac or any such entity (each an “Indemnified Person”) harmless from and against any Claims brought against or incurred by an Indemnified Person in any manner arising out of or, directly or indirectly, related to or connected with this Section 1101.2(c), including the exercise by Freddie Mac of any of its rights and remedies under this Section 1101.2(c) or any other action taken by Freddie Mac pursuant to the terms of this Section 1101.2(c); however, Seller/Servicer shall not be liable to an Indemnified Person for any Claims to the extent that such Claims are solely and directly the result of the gross negligence or willful misconduct of such Indemnified Person as determined by a final non-appealable order from a court of competent jurisdiction. Seller/Servicer’s obligations under this Section 1101.2(c) shall survive the payment in full of the Secured Obligations. (o) Continuing Lien: Seller/Servicer and Freddie Mac agree that the Lien created by this Section 1101.2(c) in the Freddie Mac Collateral shall not terminate and shall continue and remain in full force and effect until released by Freddie Mac in writing as determined by Freddie Mac in its sole and absolute discretion. (p) Cumulative rights; no waiver: Notwithstanding anything in this Section 1101.2(c) to the contrary, all of Freddie Mac’s rights and remedies provided in the Guide or any other Purchase Document together with those granted by law or at equity are cumulative and may be exercised by Freddie Mac at any time and from time to time. Freddie Mac’s exercise of any right or remedy shall not constitute a cure of any Default, unless all sums then due and payable to Freddie Mac under this Section 1101.2(c) are repaid and Seller/Servicer has cured all other Defaults. Neither the failure on the part of Freddie Mac to exercise, nor the delay on its part in exercising any right, power or remedy hereunder, nor any course of dealing between Freddie Mac and Seller/Servicer shall operate as a waiver or modification thereof, nor shall any single or partial exercise of any such right, power or remedy hereunder preclude any other or the further exercise thereof or the exercise of any other right, power or remedy. (vii) Release of the security interest granted to Freddie Mac
aSolely as it relates to a Transferor Servicer in connection with…2,145 ch
(a) Solely as it relates to a Transferor Servicer in connection with a Freddie Macapproved Transfer of Servicing (including a VPC Transfer of Servicing or Flow VPC Transfer of Servicing as defined in Exhibit 30, Voluntary Partial Cancellation of Servicing Contract Rights Agreement (RPL & NPL) Incorporated Provisions, or Exhibit 31, Flow Voluntary Partial Cancellation of Servicing Contract Rights Agreement Incorporated Provisions, respectively), effective as of the Effective Date of Transfer, and without the need for any action by any Person or Freddie Mac, Freddie Mac shall be deemed to automatically release (in each case, a “Freddie Mac Partial Release”) its Lien in the Freddie Mac Collateral pertaining to Transferor Servicer’s Servicing Contract Rights subject to the Transfer of Servicing. For the avoidance of doubt, to the extent an Unauthorized Servicing Transfer occurs as to any of Transferor Servicer’s Servicing Contract Rights, Freddie Mac shall retain its Lien in all Freddie Mac Collateral, including, without limitation, any “Proceeds” as defined under the UCC in connection with such Unauthorized Servicing Transfer pertaining to such Servicing Contract Rights. Notwithstanding the occurrence of any Freddie Mac Partial Release, Freddie Mac shall continue to retain any and all of its rights against Seller/Servicer pursuant to the Guide and the Purchase Documents, at law or in equity, and no Freddie Mac Partial Release shall be deemed a waiver, release, discharge or impairment or otherwise affect Seller/Servicer’s obligations to Freddie Mac pursuant to the Guide and the other Purchase Documents. In the event that Transferor Servicer desires that a UCC financing statement filed in connection with this Section 1101.2(c) be terminated, Transferor Servicer must send a written request to Freddie Mac for authorization for Transferor Servicer to file, at Transferor Servicer’s sole cost and expense, such UCC termination statement. Following the filing by Transferor Servicer of such Freddie Mac-authorized UCC termination statement, Transferor Servicer will promptly provide evidence of such filing to Freddie Mac.
bSolely as it relates to a Transferee Servicer in connection with…4,963 ch
(b) Solely as it relates to a Transferee Servicer in connection with a Transfer of Servicing, effective as of the Effective Date of Transfer, such Transferee Servicer shall be deemed, automatically, without the need for any action by Freddie Mac or Seller/Servicer pursuant to this Section 1101.2(c), to have granted to Freddie Mac a Lien in the Freddie Mac Collateral pertaining to Transferee Servicer’s Servicing Contract Rights subject to the Transfer of Servicing. (d) Freddie Mac and Seller/Servicer notice exchange (i) Seller/Servicer notices to Freddie Mac Except as otherwise provided in the Guide or other Purchase Documents, any communication, advice, consent, document, notice or direction given, made, sent or withdrawn by the Seller/Servicer pursuant to the Purchase Documents must be in writing and will be deemed to have been duly given to and received by Freddie Mac on the day such communication, advice, consent, document, notice or direction is actually received by Freddie Mac in the manner specified below: ■ In writing to Freddie Mac (see Directory 1) by first-class mail, or ■ Via such other first-class mail addresses or electronic addresses (e.g., e-mail addresses) as may be specified by Freddie Mac from time to time (ii) Freddie Mac notices to Seller/Servicer Any communication, advice, consent, document, notice or direction given, made, sent or withdrawn by Freddie Mac pursuant to the Purchase Documents may be in writing or may be in electronic form in accordance with Chapter 1401. Such notice will be deemed to have been duly given to the Seller/Servicer on the date such communication, advice, consent, document, notice or direction is: ■ Received in writing by first-class mail by the Seller/Servicer at the address set forth in the Purchase Documents, or ■ Received in electronic form (e-mail) as an Electronic Record by the Seller/Servicer’s computer information processing system at its internet e-mail address provided to Freddie Mac by the Seller/Servicer, or ■ Received in electronic form (facsimile) as a Record or Electronic Record by the Seller/Servicer’s electronic facsimile machine or system at the facsimile telephone number provided to Freddie Mac by the Seller/Servicer Other addresses may be substituted for the above upon notice of the substitution. (e) Severability If any provision of this Guide shall be held invalid, the legality and enforceability of all remaining provisions shall not in any way be affected or impaired thereby, and this Guide shall be interpreted as if such invalid provision were not contained herein. (f) Defined terms Initial capitalization of words in the Guide generally denotes terms that are defined in (i) the Glossary, (ii) the chapter in which capitalized words appear, or (iii) an expressly referenced chapter. (g) Construction of the Guide This Guide shall not be construed against Freddie Mac as being the drafter hereof. (h) Entire agreement This Guide, including the exhibits attached to the Guide and all Purchase Documents incorporated by reference in the Guide, constitutes the entire understanding between Freddie Mac and the Seller/Servicer and supersedes all other agreements, covenants, representations, warranties, understandings and communications between the parties, whether oral or written or Electronic, with respect to the transactions contemplated by the Guide. (i) Governing law This Guide shall be construed, and the rights and obligations of Freddie Mac and the Seller/Servicer hereunder determined, in accordance with the laws of the United States. Insofar as there may be no applicable precedent, and insofar as to do so would not frustrate any provision of this Guide or the transactions governed thereby, the laws of the State of New York shall be deemed reflective of the laws of the United States. (j) Copyright The Guide (including related supplements and Bulletins) and Industry Letters are copyrighted. Limited permission to reproduce the Guide is granted to Seller/Servicers strictly for their own use in originating and selling Mortgages to, and in Servicing Mortgages for, Freddie Mac. No part of the Guide may be reproduced for any other reason (in any form or by any means) without the express written permission of Freddie Mac. Requests for such permission to reproduce the Guide must be sent to Freddie Mac (see Directory 1). Requests will be reviewed and answered by Freddie Mac in the ordinary course of business. Freddie Mac reserves the right to revoke permission to reproduce the Guide upon 60 days’ notice to any and all Seller/Servicers. Under no circumstances will Freddie Mac permit the Guide to be reproduced by any Electronic or mechanical means, including, but not limited to, reproduction in, or as a component of, any information storage and retrieval system. (k) Headings and design features Headings and design features are written for convenience of reference only and do not constitute a part of this Purchase Document.
Operationalizing Freddie Mac Single-Family Seller/Servicer Guide 1101.2 — Legal effect of the Guide and other Purchase Documents
This is verbatim, source-snapshotted regulator text from the Claude for Compliance open corpus. To turn a rule like this into compliance work product: gap-analyze your policies and procedures (P&Ps) against these requirements to surface stale, conflicting, or missing provisions; operationalize any change with a ready-to-run update kit; and produce audit-ready evidence — every step grounded only in the regulator’s own words, never invented.
To work from the whole rulebook rather than this one page: download the corpus — every register on this site, verbatim, each with its source snapshot and effective date — then follow the methodology. It asks your assistant to answer only from the downloaded text, cite the register id and effective date it used, and tell you when the corpus does not cover something instead of filling the gap from memory. Running it locally also means no one sees which regulations you are looking at.
Source of record: https://claudeforcompliance.com/regs/fhlmc-1101-2/
· register fhlmc-1101-2 · Claude for Compliance. Free to read and download;
see regulatory updates and methodology.