Freddie Mac Single-Family Seller/Servicer Guide 9204.1 — Freddie Mac workout options and Servicer responsibilities

Freddie Mac Single-Family Seller/Servicer Guide 9204.1 — Freddie Mac workout options and Servicer responsibilities

Effective 2025-11-19 · Freddie Mac's stamp for this section

This section contains requirements related to: ■ Freddie Mac workout options ■ Servicer approval authority for workouts ■ Freddie Mac’s rights related to workout options (a) Freddie Mac workout options Servicers must evaluate Borrowers in accordance with the Freddie Mac loss mitigation evaluation hierarchy set forth in Section 9201.2. The evaluation hierarchy states the order in which a Servicer is to evaluate a Borrower for Freddie Mac’s available workout options which include Mortgage modifications, workout Mortgage assumptions, short sales, deedsin-lieu of foreclosure and charge-offs. If a Borrower’s situation does not meet all the requirements for a particular workout option but the Servicer believes that the workout option is still the best solution to the Delinquency, then the Servicer may submit a recommendation and rationale for the recommendation to Freddie Mac for review, in accordance with the submission procedures in this chapter. (b) Servicer approval authority for workouts Freddie Mac Servicers are delegated to approve the following: ■ A Freddie Mac Flex Modification®, which is a modification that meets the requirements of Sections 9206.1(b) through 9206.4(c) in accordance with the requirements of the Guide or other Purchase Documents. Note: Refer to Sections 1301.2(h) and 9206.1(c) for additional information about delegated authority and adverse action notice requirements. ■ A Freddie Mac Standard Short Sale (“short sale”), including the Streamlined Short Sale, that meets the requirements of Sections 9208.1(a) through 9208.3(a). All other short sales must be submitted to Freddie Mac for review and approval. ■ A Freddie Mac Standard Deed-in-Lieu of Foreclosure (“deed-in-lieu of foreclosure”), including the Streamlined Deed-in-Lieu of Foreclosure, that meets the requirements of Sections 9209.1 through 9209.6. All other deeds-in-lieu of foreclosure must be submitted to Freddie Mac for review and approval. For all other workouts in the Guide, the Servicer must submit its recommendation for a workout to Freddie Mac (see Directory 5) for review. Additionally, if the Mortgage is an FHA, VA or RHS Mortgage, the Servicer must obtain approval from the FHA, RHS, or VA, if applicable. The Servicer must also obtain any necessary approvals from the MI for any workout on a Mortgage with mortgage insurance. (c) Freddie Mac’s rights related to workout options Freddie Mac’s approval or settlement of a workout does not limit its right to review the Mortgage file and invoke its remedies under the Guide. If Freddie Mac’s review of the Mortgage file discloses any failure to comply with the Guide or any other Purchase Documents, Freddie Mac has the right to require the Servicer to: 1. Compensate Freddie Mac and hold it harmless for any loss, damage or expense (including court costs, attorney fees and incentive payments) that Freddie Mac sustains 2. Repurchase Freddie Mac’s interest in the Mortgage at any time under any of the circumstances outlined in Sections 3602.2(a) and 3602.2(b)

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