Freddie Mac Single-Family Seller/Servicer Guide 8303.3 — Payoff and liquidation reporting and drafting requirements

This section contains information related to: ■ Payoff – matured or prepaid reporting and drafting requirements ■ Third-party foreclosure sale reporting and drafting requirements ■ Short sale reporting and drafting requirements ■ Make-whole preforeclosure sale reporting and drafting requirements ■ Reporting a charge-off to Freddie Mac ■ Repurchase reporting and drafting requirements ■ Loan-level transaction reporting ■ Newly funded Mortgage reporting and drafting requirements ■ Reporting inactivation of a Mortgage ■ Reinstatement ■ Principal balance correction ■ Deed-in-lieu of foreclosure reporting and remittance requirements ■ FHA and VA foreclosure conveyance reporting and drafting requirements ■ REO reporting and drafting requirements

(a) Payoff – matured or prepaid reporting and drafting requirements A payoff is the repayment of a Mortgage due to full amortization or prepayment-in-full. The Servicer must report the payoff as of the Payoff Date or the date the Servicer receives the funds (as applicable) and may not alter it for any reason. The Servicer must complete the following steps to report a payoff of a Mortgage: 1. To report a prepayment-in-full, report the payoff by the second Business Day after the Payoff Date. To report the payoff of a matured Mortgage, report the payoff by the earlier of the maturity date or within two Business Days of the date the Servicer receives the funds. For Mortgages registered on the MERS® System, the Servicer must, by the second Business Day after the Payoff Date, update the MERS System to a loan status of “Paid in full” for Mortgages reported to Freddie Mac as matured or prepaid. 2. Do not report on this Mortgage in future Accounting Cycles Freddie Mac will draft the payoff amount directly from the Servicer’s designated Custodial Account as follows. (i) Principal For standard payoff remittances: ■ For a payoff of a matured Mortgage or a prepayment-in-full that is successfully reported within two Business Days of the Exception Date, Freddie Mac will draft the UPB due as reported in the previous Accounting Cycle on the fifth Business Day after the Payoff Date ■ For a payoff of a matured Mortgage, or a prepayment-in-full that is successfully reported more than two Business Days after the exception date (which is considered late), Freddie Mac will draft the UPB due as reported in the previous Accounting Cycle on the second Business Day after the reported payoff is successfully processed For Payoff Draft Date 18 Mortgage payoff remittances: ■ For Payoff Draft Date 18 Mortgages successfully reported on the first or second Business Day of the month, Freddie Mac will draft the UPB due as reported in the previous Accounting Cycle on the 18th calendar day of the month in which the payoff was successfully reported ■ For Payoff Draft Date 18 Mortgages successfully reported on or after the third Business Day of the month, Freddie Mac will draft the UPB on the 18th calendar day of the following month (ii) Interest For Standard payoff remittances: ■ For a payoff of a matured Mortgage or a prepayment-in-full that is successfully reported within two Business Days of the exception date, Freddie Mac will draft the Exception Interest on the fifth Business Day after the Payoff Date ■ For a payoff of a matured Mortgage or a prepayment-in-full that is successfully reported more than two Business Days after the exception date, Freddie Mac will draft the Exception Interest on the second Business Day after the reported payoff is successfully processed For Payoff Draft Date 18 Mortgage payoff remittances: ■ For Payoff Draft Date 18 Mortgages paid off and successfully reported on the first or second Business Day of the month, Freddie Mac will draft the Exception Interest on the 18th calendar day of the month in which the payoff was successfully reported ■ For Payoff Draft Date 18 Mortgages successfully reported on or after the third Business Day of the month, Freddie Mac will draft the Monthly Interest (i.e., Exception Interest + Compensating Interest) on the 18th calendar day of the following month ■ For Payoff Draft Date 18 Mortgages that are timely and successfully reported on the first Business Day of a month for a payoff that occurred in the previous month (i.e., the previous Accounting Cycle), Freddie Mac will draft the Monthly Interest (i.e., Exception Interest + Compensating Interest) for the month of payoff on the 18th calendar day of the month in which the payoff was successfully reported ■ For Payoff Draft Date 18 Mortgages that are timely and successfully reported on the second Business Day of the month for a payoff that occurred in the previous month (i.e., the previous Accounting Cycle), Freddie Mac will not draft Exception or Compensating Interest for the previous Accounting Cycle if such interest was previously drafted per Section 8303.2(c) Note: Refer to Sections 8303.2(a) and 8303.4(a) for information regarding an erroneously reported payoff or rescinded payoff.

(b) Third-party foreclosure sale reporting and drafting requirements A third-party foreclosure sale is a sale of the property where title to the property is not conveyed to Freddie Mac. The Servicer must comply with the requirements of Chapter 9301 regarding foreclosures and Section 8106.2(b) regarding the submission on Freddie Mac’s behalf of Internal Revenue Service (IRS) Form 1099-A, Acquisition or Abandonment of Secured Property. In accordance with Section 9301.9(a), the Servicer must notify Freddie Mac of the thirdparty foreclosure sale no later than one Business Day immediately following the date of the foreclosure sale. The Servicer must complete the following steps when the Servicer receives the entire amount of the third-party foreclosure sale proceeds: 1. Report the transaction ID of “Foreclosure” and the sale result of “third-party sale” in the Loan Level Reporting tool (see Exhibit 88, Servicing Tools) no later than the second Business Day after the Servicer receives the proceeds. When reporting, the Servicer must ensure that the: ■ Foreclosure sale date is the date that the foreclosure sale occurred ■ Ending gross UPB is zero ■ Principal due field is completed with the gross UPB as of the last reporting Accounting Cycle before the Mortgage was inactivated ■ DDLPI is the date of the last fully paid monthly installment 2. Freddie Mac will draft directly from the Servicer’s designated Custodial Account as follows: ■ Freddie Mac will draft the prior Accounting Cycle Ending UPB on the fifth Business Day after the reported transaction is successfully processed in Loan Level Reporting ■ Freddie Mac will draft the exception and delinquent interest on the fifth Business Day after the reported transaction is successfully processed in Loan Level Reporting 3. Charge-off adjustments for third-party foreclosure sales that settle in Freddie Mac systems on or before the Payoff Determination Date will be reflected in the Draft Report on the same date as the payoff draft. For transactions that settle in Freddie Mac systems after the Payoff Determination Date, charge-off adjustments will be reflected in the Draft Report on the second Business Day after the foreclosure sale settles in Freddie Mac systems. The Servicer must review the Draft Report with respect to charge-offs and report any discrepancies to Freddie Mac via the Freddie Mac Servicing Data Corrections tool (see Exhibit 88) within the same Accounting Cycle in which Freddie Mac posts the amount to the Draft Report. Servicers may access the Draft Report through the Freddie Mac Cash Manager tool (see Exhibit 88). When reporting a discrepancy, Servicers must input the calculation used to determine the variance and upload any documentation to support the request in the Servicing Data Corrections tool. Discrepancies that are after the Accounting Cycle in which the initial adjustment is posted to the Draft Report closes will be processed at Freddie Mac’s discretion and may be subject to a contract noncompliance and contract change compensatory fee (see Section 8303.5(i)). If the post-settlement correction request is denied, the Servicer may be liable for any additional losses. 4. Do not report on this Mortgage in future cycles

(c) Short sale reporting and drafting requirements A short sale is the sale of a Mortgaged Premises for which the Servicer has received Freddie Mac’s approval to sell for less than the total amount necessary to satisfy the Mortgage obligation. The Servicer must comply with the requirements of Sections 9208.1(a) through 9208.3(a) regarding a short sale and charging off a deficiency and Section 8106.2(c) regarding the submission on Freddie Mac’s behalf of IRS Form 1099-C. The Servicer must complete the following steps to report when the Servicer receives the funds for a short sale: 1. Report the short sale as “Short Sale/Charge-off/Make-whole” in the Loan Level Reporting tool (see Exhibit 88) by the second Business Day after the Servicer receives the settlement proceeds 2. Freddie Mac will draft the Ending UPB and delinquent and Exception Interest on the fifth Business Day after the exception date. If the short sale settles in Freddie Mac systems on or before the Payoff Draft Determination Date, charge-off adjustments will be reflected in the Draft Report on the same day as the payoff draft. If the short sale settles in Freddie Mac systems after the Payoff Draft Determination Date, the charge-off adjustment will be reflected in the Draft Report on the second Business Day after the short sale settles in Freddie Mac systems. See Section 8303.3(d) for additional requirements related to makewhole preforeclosure sales. 3. The Servicer must review the Draft Report with respect to charge-offs and report any discrepancies to Freddie Mac via the Freddie Mac Servicing Data Corrections tool (see Exhibit 88) within 30 calendar days following Freddie Mac’s posting of the amount to the Draft Report. Servicers may access the Draft Report through the Freddie Mac Cash Manager tool. When reporting a discrepancy, Servicers must input the calculation used to determine the variance and upload any documentation to support the request in the Servicing Data Corrections tool. Discrepancies submitted more than 60 calendar days after the initial adjustment is posted to the Draft Report will be processed at Freddie Mac’s discretion and may be subject to a contract noncompliance and contract change compensatory fee (see Section 8303.5(i)). If the post-settlement correction request is denied, the Servicer may be liable for any additional losses. Additionally, Freddie Mac may recover any workout incentives that were paid. 4. Do not report on this Mortgage in future Accounting Cycles

(d) Make-whole preforeclosure sale reporting and drafting requirements A make-whole preforeclosure sale is the sale of a Mortgaged Premises for which the Servicer has received Freddie Mac’s approval to sell the property for less than the total amount necessary to satisfy the Mortgage obligation; however, there is a mortgage insurance claim payment or a Borrower contribution that satisfies the deficiency. The Servicer must comply with the requirements of Sections 9208.1(c)(i)(B) and 9208.2(a)(ii) regarding a make-whole preforeclosure sale. The Servicer must complete the following steps to report and remit when the Servicer receives the proceeds from a make-whole preforeclosure sale: 1. Report the Mortgage as “Short Sale/Charge-off/Make-whole” in the Loan Level Reporting tool (see Exhibit 88) by the second Business Day after the Servicer receives the settlement proceeds 2. Not report on this Mortgage in future Accounting Cycles Freddie Mac will draft the Ending UPB plus delinquent and Exception Interest on the fifth Business Day after the exception date. If the make-whole preforeclosure sale settles in Freddie Mac systems on or before the Payoff Draft Determination Date, charge-off adjustments will be reflected in the Draft Report on the same day as the payoff draft. If the make-whole preforeclosure settles in Freddie Mac systems after the Payoff Draft Determination Date, the charge-off adjustment will be reflected in the Draft Report on the second Business Day after the make-whole preforeclosure sale settles in Freddie Mac systems.

(e) Reporting a charge-off to Freddie Mac Freddie Mac’s approval of a charge-off request ceases collection efforts on a delinquent Mortgage when the debt is deemed to be uncollectible or that a foreclosure should not be completed. In most cases, a charge-off will be accompanied by a lien release and cancelation of the Note (see Section 9210.1(c)). The Servicer must comply with the requirements of Sections 9210.1 and 9210.2 regarding a charge-off. The Servicer must complete the following steps to report a charge-off: 1. Report the charge-off as “Short Sale/Charge-off/Make-whole” in the Loan Level Reporting tool (see Exhibit 88) within two Business Days of the workout approval date reflected in Resolve® or following receipt of funds when a short-payoff has been approved by Freddie Mac 2. Freddie Mac will draft the Ending UPB and delinquent and Exception Interest on the fifth Business Day after the exception date. If the charge-off settles in Freddie Mac systems on or before the Payoff Draft Determination Date, charge-off adjustments will be reflected in the Draft Report on the same day as the payoff draft. If the charge-off settles in Freddie Mac systems after the Payoff Draft Determination Date, the charge-off adjustment will be reflected in the Draft Report on the second Business Day after the charge-off settles in Freddie Mac systems. 3. The Servicer must review the Draft Report with respect to charge-offs and report any discrepancies to Freddie Mac via the Freddie Mac Servicing Data Corrections tool (see Exhibit 88) within 30 calendar days following Freddie Mac’s posting of the amount to the Draft Report. Servicers may access the Draft Report through the Freddie Mac Cash Manager tool. When reporting a discrepancy, Servicers must input the calculation used to determine the variance and upload any documentation to support the request in Servicing Data Corrections. Discrepancies submitted more than 60 calendar days after the initial adjustment is posted to the Draft Report will be processed at Freddie Mac’s discretion and may be subject to a contract noncompliance and contract change compensatory fee (see Section 8303.5(i)). If the postsettlement correction request is denied, the Servicer may be liable for any additional losses. 4. Do not report on this Mortgage in future Accounting Cycles

(f) Repurchase reporting and drafting requirements Repurchased Mortgages may be Active or Inactive Mortgages or Mortgages transferred to REO. The Servicer must comply with the requirements of Chapter 3602 regarding a repurchase. For a repurchase required by Freddie Mac or a repurchase approved by Freddie Mac at the Servicer’s request, the Servicer must document the Mortgage file with Freddie Mac’s written notification requiring the repurchase or with Freddie Mac’s prior written approval of the Servicer’s request. There are three types of repurchases and their corresponding reporting and remitting requirements as described in the table below. Types of repurchases and their corresponding reporting and remitting requirements Repurchase type Reporting Drafting Voluntary Freddie Mac has approved the Servicer’s written request to repurchase a Mortgage. (Note: Only under exceptional circumstances, and on an individual basis, will Freddie Mac allow the Servicer to repurchase Freddie Mac’s interest in a Mortgage. Generally, Freddie Mac will only allow the Servicer to repurchase a Mortgage that is 90 or more days delinquent or in foreclosure.) Servicer must report within 30 days following the date of Freddie Mac’s notification approving the Servicer’s repurchase request, using the transaction type “Payoff – Repurchase.” Standard payoff remittance: Freddie Mac will draft the principal and interest on the fifth Business Day after the repurchase is successfully reported: ■ UPB as reported in the previous Accounting Cycle ■ Exception Interest and delinquent/ reinstatement interest (if applicable) due Freddie Mac as of the Payoff Determination Date Payoff Draft Date 18 Mortgage payoff remittance: ■ For Payoff Draft Date 18 Mortgages, paid off and successfully reported on the first or second Business Day of the month, Freddie Mac will draft the UPB due as reported in the previous Accounting Cycle, Exception Interest and delinquent/ reinstatement interest (if applicable) due Freddie Mac, as of the Payoff Determination Date, on the 18th calendar day of the month in which the payoff was successfully reported ■ For Payoff Draft Date18 Mortgages successfully reported on or after the third Business Day through the end of the month, Freddie Mac will draft the UPB due as reported in the previous Accounting Cycle, Monthly Interest (Exception Interest and Compensating Interest) and delinquent/ reinstatement interest (if applicable) due Freddie Mac, as of the Payoff Determination Types of repurchases and their corresponding reporting and remitting requirements Repurchase type Reporting Drafting Date, on the 18th calendar day of the following month ■ For Payoff Draft Date 18 Mortgages that are timely and successfully reported on the first Business Day of a month for a payoff that occurred in the previous month (i.e., the previous Accounting Cycle), Freddie Mac will draft the Monthly Interest (i.e., Exception Interest + Compensating Interest) for the month of payoff on the 18th calendar day of the month in which the payoff was successfully reported ■ For Payoff Draft Date 18 Mortgages that are timely and successfully reported on the second Business Day of the month for a payoff that occurred in the previous month (i.e., the previous Accounting Cycle), Freddie Mac will not draft Exception or Compensating Interest for the previous Accounting Cycle if such interest was previously drafted per Section 8303.2(c) Refer to Section 3602.3(a) for the calculation of the repurchase price for Active Mortgages or Inactive Mortgages. Involuntary Freddie Mac requires the Servicer to repurchase a Mortgage. Servicer must report within 30 days if the repurchase request is pursuant to Section 3602.2(a) or 60 days if the repurchase request is pursuant Section 3602.2(b) following the date of Freddie Mac’s notification requiring the repurchase, using the Standard payoff remittance Freddie Mac will draft the principal and interest on the fifth Business Day after the repurchase is successfully reported: ■ UPB as reported in the previous Accounting Cycle ■ Exception Interest and delinquent/ reinstatement interest (if applicable) due Freddie Mac as of the Payoff Determination Date Types of repurchases and their corresponding reporting and remitting requirements Repurchase type Reporting Drafting transaction type “Payoff – Repurchase.” Payoff Draft Date 18 Mortgage payoff remittance: ■ For Payoff Draft Date 18 Mortgages, paid off and successfully reported on the first or second Business Day of the month, Freddie Mac will draft the UPB due as reported in the previous Accounting Cycle, Exception Interest and delinquent/ reinstatement interest (if applicable) due Freddie Mac, as of the Payoff Determination Date, on the 18th calendar day of the month in which the payoff was successfully reported ■ For Payoff Draft Date18 Mortgages successfully reported on or after the third Business Day through the end of the month, Freddie Mac will draft the UPB due as reported in the previous Accounting Cycle, Monthly Interest (Exception Interest and Compensating Interest) and delinquent/ reinstatement interest (if applicable) due Freddie Mac, as of the Payoff Determination Date, on the 18th calendar day of the following month ■ For Payoff Draft Date 18 Mortgages that are timely and successfully reported on the first Business Day of a month for a payoff that occurred in the previous month (i.e., the previous Accounting Cycle), Freddie Mac will draft the Monthly Interest (i.e., Exception Interest + Compensating Interest) for the month of payoff on the 18th calendar day of the month in which the payoff was successfully reported ■ For Payoff Draft Date 18 Mortgages that are timely and successfully Types of repurchases and their corresponding reporting and remitting requirements Repurchase type Reporting Drafting reported on the second Business Day of the month for a payoff that occurred in the previous month (i.e., the previous Accounting Cycle), Freddie Mac will not draft Exception or Compensating Interest for the previous Accounting Cycle, if such interest was previously drafted per Section 8303.2(c) Refer to Section 3602.3(a) for the calculation of the repurchase price for Active Mortgages or Inactive Mortgages. REO Servicer must report the Mortgage as transferred to REO. An REO repurchase must not be reported through Resolve or any other reporting medium. ■ Freddie Mac will not draft. The Servicer must submit the proceeds to Freddie Mac (see Directory 6) with a copy of the repurchase letter and a copy of the Single-Family Servicing All-In Economic Gain/Loss Calculation that Freddie Mac sends to the Servicer within 30 days following the date of Freddie Mac’s letter requiring or approving the repurchase. ■ In the Servicer’s monthly remittance, the Servicer must remit the monthly and/or reinstatement interest due to Freddie Mac in which the Servicer repurchased the Mortgage based on the remittance Due Date The Servicer must not report on these Mortgages in future Accounting Cycles.

(g) Loan-level transaction reporting The loan-level transaction is what Freddie Mac calls the monthly reporting of each Active and Inactive Mortgage the Servicer services for Freddie Mac, including reporting monthly net yield interest, principal reductions and principal increases due to Negative Amortization. Principal reductions include curtailments and Negative Amortization decreases since the end of the previous Accounting Cycle, Scheduled Principal and prepaid Scheduled Principal. Refer to Exhibit 60, Loan-Level Data Reporting Description, and Exhibit 61, Interest and Principal Due Freddie Mac, for what the Servicer must report and how to calculate the draft due to Freddie Mac. For Biweekly Mortgages, Servicers must: ■ Report the biweekly contractual principal and interest payment as stated on the Note. If the Servicer reports more than one payment in an Accounting Cycle, then each loan-level transaction must reflect the cumulative principal received and forecasted scheduled interest for that Accounting Cycle. ■ Report the DDLPI for each biweekly installment. However, if the Due Date falls on the first day of the month, Servicers must report that DDLPI as the second day of the month. Note: This does not apply to Mortgages where the Servicer and Borrower agree to a biweekly payment plan in accordance with Section 8104.1(b) after the Mortgage has been sold to Freddie Mac. Requirements for reporting and drafting of monthly Principal and Interest Activity and certain exception activities are detailed in Section 8303.2(d)(i).

(h) Newly funded Mortgage reporting and drafting requirements A newly funded Mortgage is a Mortgage sold to Freddie Mac during the current Accounting Cycle. The Funding Date and the Mortgage balance at the end of the Accounting Cycle determine when the Servicer must report a newly funded Mortgage. The Servicer must comply with the requirements of Section 8302.3(f) regarding the initial reporting and drafting of a newly funded Mortgage. To report a newly funded Mortgage, the Servicer must: 1. Report prepayments or principal curtailments, if applicable, on a newly funded Mortgage to Freddie Mac in the current Accounting Cycle. The Servicer may report forecasted scheduled interest by the end of the current Accounting Cycle 2. If prepayments or principal curtailments are reported prior to the P&I Determination Date, Freddie Mac will draft principal due to Freddie Mac on the P&I Draft Date. If prepayments or principal curtailments are received after the P&I Determination Date, they must be reported by the end of the Accounting Cycle and principal will be drafted on the P&I Draft Date of the next Accounting Cycle 3. Continue to report monthly. See Section 8303.1(c)(i) for monthly reporting requirements.

(i) Reporting inactivation of a Mortgage Inactivation is the process to suspend remitting funds to Freddie Mac for a Mortgage that is 120 days delinquent. The Servicer must change the Reporting Status to inactive either by selecting “inactivation” in the Freddie Mac Loan Level Reporting tool (see Exhibit 88) or reporting Loan Level Reporting exception code 40 (Inactivation). If the Servicer does not inactivate a Mortgage in the Accounting Cycle in which the Mortgage becomes 120 days delinquent, Freddie Mac will inactivate the Mortgage. Once a Mortgage is inactivated, no monthly principal and interest will be drafted unless the Mortgage is partially or fully reinstated. Note: This does not apply to Biweekly Mortgages that were originated and delivered with biweekly payment schedules that become 120 days delinquent. Servicers should report $0 principal and $0 scheduled interest and not advance the DDLPI until at least one full biweekly payment is collected from the Borrower. If a Servicer attempts to inactivate a Biweekly Mortgage that becomes 120 days delinquent by doing either of the following, it will receive an edit: 1. Selecting “inactivation” in the Loan Level Reporting tool or 2. Reporting loan-level reporting exception code 40 (Inactivation) To clear the edit, the Servicer must report $0 principal and $0 scheduled interest and not advance the DDLPI until at least one full biweekly payment is collected from the Borrower. Note: Mortgages where the Borrower and Servicer agree to a biweekly payment plan, pursuant to Section 8104.1(b), after the Mortgage was delivered to Freddie Mac must be inactivated in accordance with this Section 8303.3(i). The Servicer must not report the forecasted scheduled interest in the month for which the Mortgage is inactivated. Once the Servicer has inactivated the Mortgage, the Servicer must report it to Freddie Mac monthly as principal and interest activity with zero principal and zero interest due. The Servicer must continue to report it in this manner until the Mortgage is reactivated by a full or partial reinstatement, paid off, sold at foreclosure sale or transferred to REO. The Servicer may accept and report partial payments, in increments of one full monthly payment for Inactive Mortgages. Note: See Section 8303.3(j)(ii) for information on partial reinstatements.

(j) Reinstatement Reinstatement is the process of restoring a delinquent Mortgage or a Mortgage in foreclosure to current status. A full reinstatement requires full payment of all past-due amounts and brings an Inactive Mortgage current. A partial reinstatement occurs when the Borrower makes a payment (at minimum, at least one full monthly principal payment and delinquent interest, if applicable) on an Inactive Mortgage, but does not bring the Mortgage current. The Servicer must comply with the requirements as specified in Sections 9203.1(c) through 9203.1(g) regarding full and partial reinstatements. (i) Full reinstatement of an Inactive Mortgage The Servicer must complete the following steps to report and remit when the Servicer fully reinstates an Inactive Mortgage: 1. Report all delinquent principal and interest collected from the Borrower and forecasted scheduled interest for the next Accounting Cycle as follows: ■ If the DDLPI is on or before the inactivation date, Servicers must report principal from the previously reported DDLPI to the current Accounting Cycle (or later) and interest from the inactivation date to the current Accounting Cycle plus forecasted scheduled interest for the next Accounting Cycle ■ If the DDLPI is after the inactivation date, Servicers must report principal from the previously reported DDLPI to the current Accounting Cycle (or later) and interest from the previously reported DDLPI to the current Accounting Cycle plus forecasted scheduled interest for the next Accounting Cycle ■ If the Servicer reports principal and interest on or prior to the P&I Determination Date, Freddie Mac will draft the full amount of any principal due to Freddie Mac on the P&I Draft Date of the current Accounting Cycle. If reported after the P&I Determination Date, Freddie Mac will draft any principal due to Freddie Mac on the P&I Draft Date of the following Accounting Cycle. ■ Delinquent and forecasted scheduled interest will be drafted on the P&I Draft Date of the following Accounting Cycle 2. Resume monthly P&I reporting on this Mortgage in future Accounting Cycles unless the reinstatement resulted in a payoff. Note: Servicers are encouraged, but not required, to report Loan Level Reporting exception code 50 (Reinstatement). If exception code 50 is not entered prior to the end of the Accounting Cycle, Freddie Mac will update the Loan Level Reporting system with a reinstatement transaction. (ii) Partial reinstatement of an Inactive Mortgage The Servicer must complete the following steps to report when the Servicer partially reinstates an Inactive Mortgage: If the Servicer accepts at least one full monthly principal payment and delinquent interest, then the Servicer must advance the DDLPI one month for each full payment received. Until brought current, the Inactivation Date will not change, and the Mortgage will remain inactive regardless of the number of delinquent payments accepted by the Servicer. If the DDLPI is on or prior to the Inactivation Date, the Servicer must report the principal (increments of at least one full expected principal payment as of the new DDLPI) accepted and zero interest. If the Servicer reports the partial reinstatement on or before the P&I Determination Date, Freddie Mac will draft the principal on the P&I Draft Date. If reported after the P&I Determination Date, Freddie Mac will draft the principal on the P&I Draft Date in the following Accounting Cycle. If the Servicer advances the DDLPI beyond the Inactivation Date, the Servicer must report the principal (increments of at least one full expected principal payment as of the new DDLPI) received and the Freddie Mac expected delinquent interest. If the Servicer reports the partial reinstatement on or before the P&I Determination Date, Freddie Mac will draft the principal on the P&I Draft Date. If reported after the P&I Determination Date, Freddie Mac will draft the principal on the P&I Draft Date in the following Accounting Cycle. Delinquent interest will be drafted on the P&I Draft Date in the following Accounting Cycle.

(k) Principal balance correction If the Servicer reports an erroneous principal reduction amount, the Servicer must comply with the following requirements: (i) Understated principal reduction If the Servicer understates a principal reduction during an Accounting Cycle, it may adjust the amount of the understatement during the current Accounting Cycle’s loanlevel transaction by increasing the amount of total principal reduction. However, if the Servicer is unable to correct the understated amount during the current Accounting Cycle, then they must adjust the amount of the understatement in the following Accounting Cycle. (ii) Overstated principal reduction If the Servicer overstates a principal reduction during an Accounting Cycle, then it may adjust the amount of the overstatement during the current Accounting Cycle's loan-level transaction by reporting Loan Level Reporting exception code 80 (Principal Balance Correction) and decreasing the amount of total principal reduction. However, if the Servicer is unable to correct the overstated amount during the current Accounting Cycle, then they must adjust the amount of the understatement in the following Accounting Cycle. This will result in an increase in the UPB of that Mortgage, which Freddie Mac refers to as negative principal reduction. The Servicer may confirm the processing of the UPB adjustment on the Negative Principal Reduction Report and the Loan Reconciliation Difference Report accessible through Freddie Mac Gateway®. Freddie Mac may contact the Servicer should it require additional documentation or information regarding the negative principal reduction.

(l) Deed-in-lieu of foreclosure reporting and remittance requirements A deed-in-lieu of foreclosure is a Borrower’s voluntary conveyance of clear title to the property in exchange for a discharge of debt. The Servicer must comply with the requirements of Sections 9209.1 through 9209.6(b) regarding a deed-in-lieu of foreclosure. The Servicer must submit two separate transactions to Freddie Mac to report a deed-in-lieu of foreclosure as follows: 1. Report the deed execution in Resolve (see Exhibit 88) within one Business Day of receiving the executed deed or, in the case of a leasehold Mortgage, an executed lease assignment or new lease (collectively the “lease”). If the Borrower was required to make a cash contribution as a condition of acceptance of the deed-in-lieu of foreclosure, the Servicer must remit the funds, see Section 9209.6 for remittance requirements, no later than the fifth Business Day after the receipt of funds. 2. In the Loan Level Reporting tool (see Exhibit 88), report the Mortgage as a Transfer to REO transaction by the end of the Accounting Cycle in which the Servicer receives the executed deed or executed lease If the Mortgage was inactive as of the previous Accounting Cycle, a credit for the reimbursement of advanced interest (calculated from the DDLPI up to, but not including, the month the Servicer inactivated the Mortgage), if applicable, will be reflected in the current Accounting Cycle Draft Report if reported as REO on or before the P&I Determination Date or the next Accounting Cycle if reported as REO after the P&I Determination Date. If the Mortgage was active as of the previous Accounting Cycle, a credit for the reimbursement of advanced interest (calculated from the DDLPI through the end of the previous Accounting Cycle), if applicable, will be reflected in the current Accounting Cycle Draft Report if reported as REO on or before the P&I Determination Date or the next Accounting Cycle if reported as REO after the P&I Determination Date. Do not report on this Mortgage for future Accounting Cycles.

(m) FHA and VA foreclosure conveyance reporting and drafting requirements An FHA and VA foreclosure conveyance occurs when the Servicer forecloses on a Mortgage insured by the FHA or guaranteed by the VA and the property is not sold to a third party at the foreclosure sale. The Servicer must comply with the requirements of Chapter 9301 and Sections 9603.2(a) and 9603.2(b) regarding FHA and VA foreclosures. In accordance with Section 9301.9(a), the Servicer must notify Freddie Mac of the foreclosure sale no later than one Business Day immediately following the date of the foreclosure sale. If the Mortgage was inactive as of the previous Accounting Cycle, a credit for the reimbursement of advanced interest (calculated from the DDLPI up to, but not including, the month the Servicer inactivated the Mortgage), if applicable, will be reflected in the current Accounting Cycle Draft Report if reported as FHA and VA conveyance on or before the P&I Determination Date or the next Accounting Cycle if reported as FHA and VA conveyance after the P&I Determination Date. If the Mortgage was active as of the previous Accounting Cycle, a credit for the reimbursement of advanced interest (calculated from the DDLPI through the end of the previous Accounting Cycle), if applicable, will be reflected in the current Accounting Cycle Draft Report if reported as FHA and VA conveyance on or before the P&I Determination Date or the next Accounting Cycle if reported as FHA and VA conveyance after the P&I Determination Date. The Servicer must not report on this Mortgage for future Accounting Cycles.

(n) REO reporting and drafting requirements A transfer to REO occurs when the Mortgaged Premises is not sold to a third party at the foreclosure sale and Freddie Mac acquires the property. The Servicer must comply with the requirements of Sections 8106.2(b), 9301.9(a) and 9301.9(b) and Chapter 9603 regarding the submission on Freddie Mac’s behalf of IRS Form 1099-A, Acquisition or Abandonment of Secured Property. In accordance with Section 9301.9(a), the Servicer must notify Freddie Mac of the foreclosure sale no later than one Business Day immediately following the date of the foreclosure sale. The Servicer must complete the following steps to report for a transfer to REO: 1. The Servicer must report the transfer of the property to REO in the Loan Level Reporting tool (see Exhibit 88) in the same Accounting Cycle in which the foreclosure sale occurs 2. For the interest the Servicer advanced for the delinquent Mortgage, the Servicer will be provided a credit calculated as follows: ■ If the Mortgage was inactive as of the end of the Accounting Cycle prior to the foreclosure, a credit for the reimbursement of advanced interest, if applicable, will be reflected in the current Accounting Cycle Draft Report if reported as REO on or before the P&I Determination Date, or the next Accounting Cycle if reported as REO after the P&I Determination Date ■ If the Mortgage was active as of the end of the Accounting Cycle prior to the foreclosure, a credit for the reimbursement of advanced interest, if applicable, will be reflected in the current Accounting Cycle Draft Report if reported as REO on or before the P&I Determination Date, or the next Accounting Cycle if reported as REO after the P&I Determination Date 3. Do not report on this Mortgage in future Accounting Cycles Servicers are not required to wait until the end of the redemption period to report the REO transaction to recover the delinquent interest advanced to Freddie Mac.