Freddie Mac Single-Family Seller/Servicer Guide 9205.1 — Transfers of Servicing and document retention requirements

This chapter provides Servicing requirements with respect to those Borrowers who received a modification under the Home Affordable Modification ProgramSM (HAMP®). Servicers may no longer evaluate Borrowers for a HAMP Trial Period Plan or enter into a HAMP modification agreement with a Borrower. This section contains information related to: ■ Transfers of Servicing ■ Document retention requirements

(a) Transfers of Servicing When a Transfer of Servicing includes Mortgages modified under HAMP, the Transferor Servicer must provide special notification to the Transferee Servicer. This includes: ■ Informing the Transferee Servicer that Mortgages modified under HAMP are part of the portfolio being transferred, and ■ Confirming that the Transferee Servicer is aware of and agrees to assume the additional responsibilities associated with the Servicing of these Mortgages If the portfolio being transferred includes Mortgages modified under HAMP, the Transferor Servicer must: ■ Indicate this in the Servicing Transfer Manager tool (see Exhibit 88, Servicing Tools) as part of its request for Freddie Mac’s approval for the Subsequent Transfer of Servicing ■ Specify if the transfer includes modified Mortgages that have a step-rate provision, where the interest rate is subject to incremental increases beginning in year 6 of the modification ■ Identify any Mortgages that include a partial principal forbearance For electronically modified Mortgages, the Transferor Servicer must: ■ Indicate that the eModification Agreement is Electronic (as defined in Section 1402.1(a)) ■ Provide a list of such Mortgages and indicate the name of the repository holding the eModification Agreement Servicers must comply with all other requirements with respect to Transfers of Servicing provided under Chapter 7101.

(b) Document retention requirements Servicers must retain all documents and information received during the process of determining Borrower eligibility for a modification under HAMP, including: ■ The Borrower Response Package ■ Total monthly Mortgage payment and total monthly gross debt payment calculations ■ Net present value (NPV) calculations and results (Treasury NPV Model and version used, assumptions, inputs and outputs) ■ Evidence of the Servicer’s application of each step of the waterfall ■ Escrow analysis, Escrow advances, and Escrow set up Servicers must retain all documents and information related to the monthly payments during and after the Trial Period, as well as incentive payment calculations and such other required documents. All documents, records, data and information required to be maintained by the Servicer under this Chapter 9205 are, will be, and will remain at all times, the property of Freddie Mac. The Servicer must retain such documents, records, data and information in a custodial capacity and otherwise comply with the Mortgage file retention requirements set forth in Chapter 3302. All documents required to be maintained under this Chapter 9205 must be maintained in the Mortgage file. As it relates to imminent default a Servicer must: ■ Document in its servicing system the basis for its determination that a Borrower is in imminent default; and ■ Retain all documentation and data used to reach its conclusion. The Servicer’s documentation must also include any Imminent Default Indicator® input and output files and data. Servicers must retain detailed records of Borrower solicitations or Borrower-initiated inquiries regarding HAMP, the outcome of the evaluation for modification under HAMP and specific justification with supporting details if the Borrower was determined to be ineligible for a modification under HAMP. Servicers must maintain appropriate documentary evidence of their HAMP-related activities, including, but not limited to, the following: ■ The Servicer’s process for pre-screening non-performing Mortgages against the basic HAMP requirements ■ All HAMP-related communications, whether verbal or written, with or to the Borrower or person identified in a written authorization by the Borrower and provided to the Servicer in accordance with Section 9102.5(c) (Authorized Person) (including, but not limited to, the dates of communications, names of contact person(s), and a summary of the conversation), including any e-mail correspondence to or from the Borrower or Authorized Person ■ Phone contact with Borrowers or Authorized Persons relating to HAMP ■ Policies and procedures that include HAMP-related activities ■ Training materials relating to HAMP ■ Pre-screening of Mortgages for HAMP prior to referring any Mortgage to foreclosure or conducting scheduled foreclosure sales ■ Postponement of scheduled foreclosure sales in applicable scenarios ■ Substitution of income documents for Borrowers in active Chapter 7 or Chapter 13 bankruptcy ■ Certification prior to foreclosure sale ■ Evidence of receipt of the Borrower Response Package from a Borrower ■ Any reports, memoranda, or other documentation relating to HAMP ■ The decision-making process when applying good business judgment in accordance with HAMP and, where applicable, referencing the Servicer’s associated policies and procedures With respect to phone contact with Borrowers or Authorized Persons related to HAMP, welldocumented Servicer system notes (including, but not limited to date, names of contact persons, and a summary of the conversation) constitute appropriate documentation. Written correspondence should be retained in the Mortgage file and made available upon request by Freddie Mac. Records must also be retained to document the reason(s) for a Borrower’s failure to successfully complete the Trial Period, including: ■ When a HAMP modification is not pursued because the NPV test result is negative. The Servicer must document its consideration of other alternatives to foreclosure. ■ When a Borrower under a HAMP modification loses good standing by becoming 90 days or more past due (e.g., three monthly payments are due and unpaid on the last day of the third month). The Servicer must retain documentation of its consideration of the Borrower for other loss mitigation alternatives. With respect to requirements related to the request for Borrower and co-Borrower information for government monitoring purposes, the Servicer must retain the appropriate documentation in the Mortgage file. Servicers must retain required documents for the period set forth in Section 3302.1(c). If the Mortgage is subject to an indemnification agreement, the Servicer must remit to Freddie Mac an annual payment for the amount of all modification-related costs (e.g., interest rate shortfall) as calculated by Freddie Mac pursuant to Freddie Mac’s “Modification Loss Amount” methodology. The Modification Loss Amounts due will be calculated on a monthly basis and billed on an annual basis for the life of the modified Mortgage. If the Mortgage is subject to a partial indemnification, each year the Servicer will be billed the appropriate percentage of the Modification Loss Amount that corresponds with the partial indemnification agreement. Modification Loss Amounts will be determined by Freddie Mac in accordance with a process described in Bulletins 2016-5 and 2017-1. Note: Pursuant to Section 9204.3(a), the Servicer is not eligible to receive an incentive for completing a modification on a Mortgage that is subject to an indemnification agreement.