Freddie Mac Single-Family Seller/Servicer Guide Section 3402.1 — Quality control program structure

Freddie Mac Single-Family Seller/Servicer Guide Section 3402.1 — Quality control program structure

3402.1: Quality control program structure (05/06/26) This section contains requirements related to: ■ Seller’s quality control program ■ Use of third-party quality control services ■ Transfers of Servicing (a) Seller’s quality control program The Seller must operate a quality control program for Home Mortgages that is acceptable to Freddie Mac. Organizations with a commitment to quality control recognize that quality begins before an application is taken and continues throughout the entire Mortgage origination process. The purpose of a quality control program is to monitor and evaluate the integrity of the origination process and to provide feedback to the organization about its originations. This feedback is used to adjust and improve production processes. Effective quality control programs are designed to monitor and evaluate the specific characteristics of the Seller’s organization and reflect: ■ The size and structure of the organization ■ The experience and expertise of the staff ■ The geographic areas of operation ■ The branch structure ■ The volume and types of Mortgages originated ■ The origination sources used (e.g., from Mortgage Brokers or Correspondents or via the internet) ■ Any significant changes in the product lines, origination sources or production process ■ Controls in place to ensure that internal policies and procedures are followed Freddie Mac Single-Family Seller/Servicer Guide Chapter 3402 As of 05/06/26 Page 3402-2 Although no single specific quality control program can meet the needs of all Sellers, there are certain characteristics found in all effective quality control programs. The Seller’s quality control program must: ■ Be in writing ■ Provide for standard operating procedures for all employees who will be involved with or affected by the quality control process ■ Be capable of evaluating and monitoring the overall quality of Mortgage production on a regular and timely basis ■ Include both: • Preclosing quality control reviews, and • Post-closing quality control reviews ■ Include procedures to ensure timely: • Sample selection, • Mortgage file reviews, and • Reporting of findings to Senior Management The Seller may use any combination of preclosing or post-closing quality control reviews based on its specific operations and needs. The Seller’s post-closing in-house quality control program must operate independently of the Mortgage origination and underwriting departments. However, for Sellers with annual production of less than 5,000 Home Mortgages, the post-closing quality control function may be housed with the origination and underwriting departments. The Seller must also comply with the requirements of Section 3201.1(c) relating to fraud prevention and detection in its quality control program, as well as other applicable requirements of Chapter 3201 relating to fraud prevention, detection and reporting. A variety of reference guides, tools and technology resources designed to assist Seller/Servicers with their in-house quality control program can be found on Freddie Mac’s website at https://sf.freddiemac.com/working-with-us/selling-delivery/delivery-options- pricing/quality-control. (b) Use of third-party quality control services The Seller may use third-party quality control services for all or part of its quality control program. The Seller using third-party quality control services must: Freddie Mac Single-Family Seller/Servicer Guide Chapter 3402 As of 05/06/26 Page 3402-3 ■ Ensure that the services performed by third-party quality control services comply with Freddie Mac’s requirements ■ Monitor and evaluate the performance of third-party quality control services on a regular basis The Seller must review third-party quality control findings and take the same corrective actions as it would with respect to quality control findings made by its own staff. (c) Transfers of Servicing The Seller’s post-closing quality control program must include policies and procedures addressing Transfers of Servicing. When Servicing is transferred, the Seller must: ■ Retain copies of the file documents to complete the quality control reviews, or ■ Make arrangements with the new Servicer to assist in the quality control reviews Records of completed quality control reviews must be provided to the new Servicer upon request.

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