Freddie Mac Single-Family Seller/Servicer Guide 9206.2 — Modification terms, trial period and conditions of a Freddie Mac Flex Modification®

This section contains information related to: ■ Determining the terms of a Freddie Mac Flex Modification® ■ Trial Period Plan requirements ■ Modified Mortgage conditions ■ Other modification conditions and requirements

(a) Determining the terms of a Freddie Mac Flex Modification Based on the information provided by the Servicer, Resolve® will determine the terms of the Freddie Mac Flex Modification Trial Period Plan and, following the Trial Period Plan, will determine the terms of the final modification agreement. Note: If the Borrower has previously made partial prepayments of principal (curtailments) and the monthly principal and interest installments were not recalculated in accordance with Section 8103.3(d), then the remaining Mortgage term must be calculated using the premodification interest-bearing UPB and the pre-modification principal and interest payment amount. The payment reduction target is considered satisfied once: ■ An incremental application of the steps to determine the terms of a Freddie Mac Flex Modification (i.e., interest rate application, Mortgage term extension, principal forbearance) achieves a post-modified Principal and Interest Payment reduction amount that just surpasses but is as close to 20% as possible (e.g., 20.01%) ■ The payment reduction target is not considered satisfied if the payment reduction amount is less than or precisely equal to 20% The Servicer must apply the steps to determine the terms for the Freddie Mac Flex Modification incrementally until the payment reduction target is achieved or until the steps are exhausted. The Servicer must offer the Freddie Mac Flex Modification if the modification will result in a post-modified Principal and Interest Payment amount that is less than or equal to the pre-modified payment amount. Based on the information provided by the Servicer, Resolve will determine the terms of the Freddie Mac Flex Modification according to the following steps: Determining the terms of a Freddie Mac Flex Modification Steps Requirements Step 1 Capitalize arrearages Capitalize arrearages in accordance with the requirements of Section 9206.3(b). Step 2 Establish the preliminary modification interest rate Set the preliminary modification interest rate to a fixed rate based on the following requirements using the interest rate in effect for the periodic payment due in the month of the evaluation date. Note: This step is solely to set the preliminary modification interest rate. Refer to step 3 for instructions on how to apply interest rate relief pursuant to Freddie Mac’s revised Freddie Mac Flex Modification waterfall requirements. If the existing Mortgage is: …then A fixed-rate Mortgage (including ARMs and Step-Rate Mortgages with no additional interest rate adjustments or steps scheduled) The Servicer must use the existing interest rate. An ARM or Step-Rate Mortgage that has not reached its final interest rate The Servicer must set the preliminary modification interest rate to the greater of: ■ The Freddie Mac modification interest rate in effect and posted as of the date the Servicer evaluates and determines the Borrower is eligible for a Trial Period Plan, or ■ The current interest rate Note: If the Freddie Mac modification interest rate is greater than the maximum step-rate/lifetime cap Note Rate, then the Servicer must set the modification rate to the maximum step-rate/lifetime cap Note Rate. Step 3 Determining the Freddie Mac Flex Modification interest rate If the post-modification mark-to-market loan-to-value (MTMLTV) is greater than or equal to 50% and The preliminary modification interest rate is: …then Greater than Freddie Mac’s modification interest rate in effect The Servicer must incrementally reduce the interest rate in 0.125% increments until the earlier of achieving: ■ The payment reduction target, or ■ The Freddie Mac modification interest rate Note: If the incremental reduction rate of 0.125% would cause the modification interest rate to fall below the posted modification interest rate, the Servicer must stop at the Freddie Mac modification interest rate. Less than or equal to Freddie Mac’s modification interest rate in effect The Mortgage will retain the preliminary modification interest rate as the postmodification contractual interest rate. If the post-modification MTMLTV is less than 50%, then the Borrower will retain the preliminary modification interest rate as the post-modification contractual interest rate. The interest rate used to calculate the Trial Period Plan payment must be the same rate that will be used to establish the terms of the modification agreement, and the Freddie Mac Flex Modification must result in a fixed-rate Mortgage. Step 4 Term extension If the payment reduction target has not been met after step 3, extend the remaining Mortgage term in monthly increments, if applicable, until the earlier of: ■ A Mortgage term in which the payment reduction target is reached, or ■ A Mortgage term of 480 months from the modification effective date Note: If a Mortgage has been subject to one or more previous principal curtailments, this could result in a post-modified maturity date that is earlier than the pre-modified maturity date. Step 5 Forbear principal If the payment reduction target has not been met after step 4 and the postmodification MTMLTV ratio (which includes capitalized amounts) is greater than 50%, forbear principal until the earlier of achieving: ■ The payment reduction target, ■ A result of 30% of the post-capitalized UPB (“the Forbearance Cap”), or ■ An amount that would create a post-modification MTMLTV ratio of 50% using the interest-bearing UPB Note: Interest must not accrue on any principal forbearance. Principal forbearance is payable upon the earliest of the maturity of the Mortgage loan modification, sale or transfer of the property, refinance of the Mortgage loan or payoff of the interest-bearing UPB. (i) Determination of eligibility based on Trial Period payment For a Freddie Mac Flex Modification, the estimated monthly modified principal and interest payment calculated when the terms of the Trial Period Plan are determined must comply with the applicable principal and interest payment reduction requirements set forth in Section 9206.1(c). If the Borrower makes all Trial Period payments timely, the Servicer must modify the Mortgage, even if, due to variances between estimated capitalization amounts and final capitalization amounts, the Freddie Mac Flex Modification does not meet the applicable requirements above. When determining eligibility for a Trial Period Plan offer, the Servicer is responsible for ensuring that its estimate of the amounts to be capitalized includes all known amounts. (ii) Resolve Servicers must use Resolve for all Mortgages for which Borrowers are being evaluated for a Trial Period Plan and modification under this chapter. Each Servicer shall use Resolve in accordance with (A) the requirements in this section, (B) the Payment Deferral and other instructions provided in Resolve Online Help and any other Documentation and (C) any other applicable provisions of the Guide, including Sections 2401.1 and 2404.2. Resolve does not adjust its terms for compliance with State-specific laws relating to loan modifications. Servicers must review the terms of any Trail Period Plan or modification agreement created using Resolve for compliance with applicable State laws and adjust the terms accordingly before transmitting them to the Borrower. The Servicer must access the Resolve application and submit all required data for Borrowers under consideration for a Freddie Mac Flex Modification: ■ For Borrowers who are current or less than 60 days delinquent, the Servicer must enter the information required for Resolve to make an imminent default determination in accordance with Section 9206.1(e) and enter the Imminent Default Hardship reason, if applicable, into Resolve ■ Upon successful completion of the Trial Period, the Servicer must update the principal balance as of the Modification Effective Date and any applicable fields to reflect the final amounts that must be capitalized If a Servicer is unable to complete a submission of a Trial Period Plan or modification agreement via Resolve, the Servicer should contact Customer Service at 800-FREDDIE.

(b) Trial Period Plan requirements A Borrower who is evaluated and determined eligible for a Freddie Mac Flex Modification must enter into a Trial Period Plan under which the Borrower will be required to remit three monthly payments at the estimated post-modified payment amount. (See also Section 9206.2(b)(ii) for Trial Period extension requirements for Borrowers in bankruptcy.) The Servicer may utilize a processing month following the end of the Trial Period to facilitate processing of the modification agreement in accordance with Section 9206.4(a)(ii). A payment is not required during the interim month. (i) Processing the Trial Period Plan offer If the Borrower qualifies for a modification, the Servicer must offer the Borrower a Trial Period Plan. ■ The Freddie Mac Flex Modification Trial Period Plan Notice Within five days of an evaluation decision, but no later than 30 days following receipt of the complete Borrower Response Package, the Servicer must send the Borrower a Borrower Evaluation Notice indicating the outcome of its decision. If the Borrower is approved for a Freddie Mac Flex Modification, the Servicer must send the Borrower a Freddie Mac Flex Modification Trial Period Plan Notice – Based on an Evaluation of a Complete BRP. The Freddie Mac Flex Modification Trial Period Plan Notice communicates the qualification decision to the Borrower and is included in Exhibit 93, Evaluation Notices. ■ The Freddie Mac Flex Modification Trial Period Plan Solicitation for offers under Section 9206.1(c)(iii) If the Borrower who is eligible under Section 9206.1(c)(iii) is approved for an offer for a Freddie Mac Flex Modification, the Servicer must send the Borrower a Freddie Mac Flex Modification Trial Period Plan Solicitation Offer – Not Based on an Evaluation of a BRP with Exhibit 1191, Freddie Mac Flex Modification® Solicitation Cover Letter, or Exhibit 1191B, Freddie Mac Flex Modification® Solicitation Cover Letter for Day 60 Rate Reset, as applicable, in accordance with the requirements described in Section 9102.5(a). If the Borrower is approved for a streamlined offer for a Freddie Mac Flex Modification due to an Eligible Disaster in accordance with the requirements of Section 9206.1(c)(v), the Servicer must send the Borrower the Freddie Mac Flex Modification Trial Period Plan Solicitation Offer – Not Based on an Evaluation of a BRP, amended as set forth in Exhibit 93 for Eligible Disasters, and Exhibit 1191A, Freddie Mac Flex Modification® Post-Disaster Forbearance Solicitation Cover Letter. The Freddie Mac Flex Modification Trial Period Plan Notice communicates the qualification decision to the Borrower and is included in Exhibit 93. ■ Special requirements for Mortgages with post-modification MTMLTV ratios less than 80% In addition to the requirements above, the Servicer must ensure the Trial Period Plan Notice for a Borrower whose Mortgage has a post-modified MTMLTV ratio less than 80% includes a statement reminding the Borrower that once the Mortgage has been modified, the Borrower can always pay more than the contractual payment without penalty if he or she desires to pay down the debt faster. ■ The Disaster Relief Modification Trial Period Plan Notice If the Borrower is approved for a Disaster Relief Modification in accordance with the requirements in Section 9203.4(i), the Servicer must send the Borrower a Disaster Relief Modification Trial Period Plan Notice. The Disaster Relief Modification Trial Period Plan Notice communicates the qualification decision to the Borrower and is included in Exhibit 93. ■ Authorized changes to Trial Period Plan Notices The Servicer may amend a Trial Period Plan Notice as necessary to request any Borrower cash contribution the Borrower promises to pay for expenses and delinquent amounts not capitalized, if applicable. Servicers may also amend a Trial Period Plan to condition the approval of the Mortgage modification on obtaining any necessary court and/or trustee approvals for Borrowers in bankruptcy and to address situations where a Borrower files for bankruptcy during the Trial Period. In addition, Servicers must amend the Trial Period Plan Notice as necessary to ensure compliance with applicable laws, rules and regulations. If the Borrower previously received a Chapter 7 bankruptcy discharge but did not reaffirm the Mortgage debt under applicable law, the Servicer must add the following language to the Trial Period Plan Notice under the section “Additional Trial Period Plan Information and Legal Notices:” If you previously received a Chapter 7 bankruptcy discharge, but did not reaffirm the mortgage debt under applicable law: You agree that you were discharged in a Chapter 7 bankruptcy proceeding subsequent to the execution of the Loan Documents. Based on this representation, Lender agrees that you will not have personal liability on the debt pursuant to this Trial Period Plan. If under applicable law, a Servicer may not establish an Escrow account, the Servicer must delete the following language from the Trial Period Plan Notice: Page 3: Your new monthly payment will include an escrow for property taxes, hazard insurance and other escrowed expenses. If the cost of your homeowners insurance, property tax assessment or other escrowed expenses increases, your monthly payment will increase as well. Page 3: If your monthly payment did not include escrows for taxes and insurance, you are now required to do so: You agree that any prior waiver that allowed you to pay directly for taxes and insurance is revoked. You agree to establish an escrow account and to pay required escrows into that account. ■ Effective Date of the Trial Period Plan When preparing the Trial Period Plan Notice, the Servicer must determine the Trial Period Plan Effective Date and the due date of the first Trial Period payment in accordance with the following instructions: Determining the Trial Period Plan Effective Date and the due date of the first Trial Period payment If the Servicer sends the Trial Period Plan Notice to the Borrower: … then the Trial Period Plan Effective Date and the due date of the first Trial Period payment is: On or before the 15th of the month The first day of the next month After the 15th of the month The first day of the month after the next month Example: If the Servicer sends the Trial Period Plan to the Borrower on June 10, the Trial Period Plan Effective Date and first Trial Period payment due dates are both July 1. If the Servicer sends the Trial Period Plan to the Borrower on June 17, the Trial Period Plan Effective Date and first Trial Period payment due date are both August 1. Notwithstanding the requirement above, after the Trial Period Plan Notice was sent to the Borrower, the Servicer may commence the Trial Period on the first day of the next month if the Borrower consents to commence the Trial Period earlier than the effective date requirements set forth above. If the Borrower fails to submit the first Trial Period payment on or before the last day of the first Trial Period month (e.g., on or before July 31st in the example above), the Servicer must consider the Trial Period Plan offer to be rejected by the Borrower. ■ Borrower acceptance of offer A Borrower’s notification to the Servicer indicating an intent to accept a Trial Period Plan offer within 14 days of the date of the offer constitutes sufficient notice solely for purposes of suspending foreclosure referral or sale in accordance with Sections 9301.2(c), 9301.2(d) and 9301.7(a). For purposes of legal acceptance, Borrowers are not required to sign or return the Trial Period Plan Notice. Timely receipt of the first payment due under the Trial Period Plan Notice is evidence of the Borrower’s acceptance of the Trial Period Plan terms and conditions. The Servicer must receive the Borrower’s first Trial Period payment on or before the last day of the month in which the Trial Period Plan Effective Date occurs (Trial Period Plan Offer Deadline). Otherwise, the Servicer must consider the Trial Period Plan offer to have expired. (ii) Requirements during the Trial Period The first Trial Period payment is due by the Trial Period Plan Offer Deadline. The Servicer must require the Borrower to remit timely payments. Each Trial Period payment must be received no later than the last day of the month in which the Trial Period payment is due. Borrowers who fail to make timely Trial Period payments are considered to have failed the Trial Period. Servicers must use good business judgment in determining whether Trial Period payments were received timely or if mitigating circumstances caused the payment to be late. Exceptions must be documented in the Servicer’s records. Although the Borrower may make scheduled Trial Period payments earlier than expected, the payments may not result in acceleration of the Modification Effective Date. During the Trial Period, the Servicer must: ■ Continue to report to Freddie Mac in accordance with the investor reporting requirements set forth in the Guide, which include the advancing of forecasted scheduled interest (and principal, if applicable) under the existing Mortgage terms to Freddie Mac, provided that the Servicer has not inactivated the Mortgage ■ Credit to an unapplied or suspense funds account, payments made by the Borrower during the Trial Period. Once enough funds have accumulated in the unapplied or suspense funds account to satisfy the oldest payment due under the existing Mortgage terms (including applying the portion of the Trial Period payment allocable to escrowed items to the existing or newly established Escrow account provided those amounts were due at the time of the oldest delinquent payment due date), the Servicer must apply the payment in accordance with the current Note and Security Instrument, or prior modification agreement, if applicable. ❑ Recommencement and/or initiation of collection efforts and foreclosure actions A Borrower is considered to have failed a Trial Period Plan if the Borrower fails to: ■ Make a Trial Period payment by the last day of the month in which the payment is due ■ Comply with the terms of the Trial Period Plan If the Borrower fails the Trial Period Plan because they did not meet the above requirements, the Servicer must begin or recommence collection efforts in accordance with Section 9102.4 or, if applicable, recommence any suspended foreclosure action or proceeding. Additionally, the Servicer must cancel the plan if the Borrower does not execute and return the modification agreement per the requirements set forth in Section 9206.4(a), the Servicer must begin or recommence collection efforts in accordance with Section 9102.4 or, if applicable, recommence any suspended foreclosure action or proceeding. After determining a Borrower has failed or the Trial Period was canceled according to the requirements under this Section 9206.2(b)(ii), the Servicer must report any initiated or resumed collection or foreclosure activity through EDR. See Section 9102.6 for information on EDR. Late charges may accrue during the Trial Period subject to the requirements of Section 9102.2. However, all accrued and unpaid late charges must be waived in the event the Mortgage is modified. ❑ Changes to tax and insurance premium payments If there are changes in a Borrower’s tax and insurance premium payments after the Borrower has been qualified for a Trial Period Plan, the Servicer is not required to re-qualify the Borrower based on the subsequent changes in taxes and insurance. However, the Servicer should provide written notice to the Borrower that explains the impact of the new Escrow payment on the modification. ❑ Borrowers in Trial Period Plans If a Borrower was in a Trial Period Plan prior to entering into a forbearance plan, the Borrower may be re-evaluated for a new Trial Period Plan within 30 days prior to or upon completion of the forbearance plan. Servicers must not resume or restart the terms of the previous Trial Period Plan prior to the start of the forbearance plan. Instead, the Servicer must evaluate the Borrower based on the status of the Mortgage at the time of the new evaluation and, if the Borrower meets all eligibility requirements, the Servicer must send a new Trial Period Plan offer to commence on or after the completion of the forbearance plan. For any subsequent modification submissions, the Trial Period Plan that the Borrower was in prior to the start of the forbearance plan will not be considered a failed Trial Period Plan for a Freddie Mac Flex Modification evaluation. ❑ Borrowers filing for bankruptcy during the Trial Period Borrowers who are in a Trial Period Plan and subsequently file for bankruptcy may not be denied a modification on the basis of the bankruptcy filing. The Servicer and its counsel must work with the Borrower or Borrower’s counsel to obtain any court and/or trustee approvals required in accordance with local court rules and procedures. Servicers should extend the Trial Period Plan as necessary to accommodate delays in obtaining court approvals or receiving a full remittance of the Borrower’s Trial Period payments when they are made to a trustee, but they must not extend the Trial Period beyond nine months, resulting in a total 12month Trial Period. In the event of a Trial Period extension, the Borrower must make a Trial Period payment for each month of the Trial Period, including any extension month, in order to remain eligible for a modification. See Section 9206.2(d)(i) for information on reporting an extended Trial Period Plan via EDR. ❑ Chapter 13 bankruptcy When a Borrower in an active Chapter 13 bankruptcy is in a Trial Period Plan and the Borrower has made post-petition payments on the Mortgage in the amount required by the Trial Period Plan, a Servicer must not object to confirmation of a Borrower’s Chapter 13 plan, move for relief from the automatic bankruptcy stay or move for dismissal of the Chapter 13 case on the basis that the Borrower paid only the amounts due under the Trial Period Plan, as opposed to the non-modified Mortgage payments. ❑ Chapter 7 bankruptcy Borrowers who have received a Chapter 7 bankruptcy discharge in a case involving the Mortgage and who did not reaffirm the Mortgage debt under applicable law, are eligible for a modification. ❑ Mortgages with temporary subsidy buydown plans When processing the Trial Period Plan offer on a Mortgage with a temporary subsidy buydown plan, the Servicer must make the appropriate changes to the applicable evaluation notice to reflect application of any buydown funds as a condition of completing the Mortgage modification, as applicable. See Section 9206.3(b)(i) for information about temporary subsidy buydown funds.

(c) Modified Mortgage conditions The Servicer must ensure that the modified Mortgage: 1. Retains its First Lien position and continues to be fully enforceable in accordance with its terms at the time of modification, throughout its modified term, and during any bankruptcy or foreclosure proceeding involving the Mortgage. The Servicer must record the modification agreement only when doing so is necessary to ensure its compliance with this First Lien retention and modification enforcement requirement. If recordation is not immediately necessary but may be required in the future to comply with this First Lien retention and modification enforcement requirement, the Servicer must have the modification agreement in recordable form. The modification agreement must be executed by the Borrower(s). Notwithstanding the foregoing, the Servicer must: (a) Ensure the following are current, as applicable: property taxes ground rents and assessments or other charges that, if delinquent, are or may become First Liens on the property or that if not paid would result in the subordination of Freddie Mac’s interests. (See Section 9301.6(e) regarding expenses that may become First Liens on the property.) (b) Obtain a title endorsement or similar title insurance product issued by a title insurance company prior to or at the time of the modification whenever it is necessary to record the modification agreement to retain the modified Mortgage’s First Lien position. For Cooperative Share Loans recognized as personal property, refer to Section 8801.1(f)(i) regarding certain Servicer warranties required in the event of a loan modification. (c) Obtain subordination agreements from any junior lienholders, if required by the title insurance company.

(d) Record the executed loan modification agreement, even if the jurisdiction where the property is located does not require the Servicer to do so, whenever recordation is necessary to retain the modified Mortgage’s First Lien position if, in the future, recordation is necessary to enforce the terms of the modified Mortgage (e.g., preforeclosure) or if it contains provisions related to the assignment of leases and rents. 2. Retains all living signers on the existing Note as obligors. Except as otherwise provided in Section 9206.2(d)(v), all Borrowers and any other signatory to the Security Instrument must sign the modification agreement and all other required documents. 3. Contains a due-on-transfer provision if the existing Mortgage documents do not contain such a provision (see Exhibit 78, Modification Due on Transfer Rider, for an example of a due-on-transfer rider) 4. Does not have any secondary financing included in the UPB 5. Does not provide any cash-out to the Borrower 6. Except as set forth in Section 9206.1(c)(v), has an Escrow account (see Chapter 8201) even if the existing Mortgage does not have an Escrow account 7. Retains mortgage insurance coverage if the existing Mortgage has such coverage, and the loss coverage percentage must remain the same 8. Contains an assignment of rents rider if the property is a 1-unit Investment Property or a 2- to 4-unit property (see Exhibit 77 for an example of an assignment of rents rider) 9. Retains any existing credit enhancement, such as an indemnification agreement. (Note: Mortgages subject to recourse are not eligible for a Freddie Mac Flex Modification®.) If the Servicer is not the provider of the credit enhancement, it must obtain written approval from the institution providing the enhancement. 10. Contains a Modification Bankruptcy Disclosure Rider for a Borrower who has been discharged from the Freddie Mac debt (see Exhibit 78A, Modification Bankruptcy Disclosure Rider, for an example of the rider) 11. Is a fully amortizing fixed-rate Mortgage. The Mortgage after modification must not be an interest-only Mortgage, a bi-weekly Mortgage or a daily simple interest Mortgage. 12. Has flood insurance coverage if the property is located in an area that has been identified by the Director of the Federal Emergency Management Agency (FEMA) as a Special Flood Hazard Area (SFHA). The Servicer must determine if the area where the property is located has been identified as a SFHA. This step must be taken even if the property was not located in a SFHA when the Mortgage was originated. If the property is located in a SFHA, then the Servicer must require that the Borrower purchase flood insurance as required in Section 8202.2. (d) Other modification conditions and requirements (i) EDR Resolve automatically reports the below EDR default action codes when applicable. Servicers may, but are not required to, report specific Freddie Mac Flex Modification activity to Freddie Mac as follows: ■ BF – “Standard Modification Trial Period.” Report default action code BF to notify Freddie Mac that the Borrower has entered into a Trial Period for the Freddie Mac Flex Modification. Servicers may report this code along with the Trial Period Plan Effective Date each month during the Trial Period. In addition, Servicers may report this code if they elect to use the interim month option under the Trial Period Plan or extend the Trial Period Plan to accommodate a Borrower’s bankruptcy filing. See Section 9206.4(a)(ii) for information on the interim month option and Section 9206.2(b)(ii) for information on extending a Borrower’s Trial Period Plan when the Borrower is in bankruptcy; or ■ HD – “Modification in Review.” Report default action code HD to notify Freddie Mac that the Borrower is being evaluated for a modification. Servicers may report this code along with the date they began reviewing the Borrower for the modification. Report this code one time in the month following the month in which the evaluation took place. ■ HE – “Ineligible/Cancel Modification.” Report default action code HE to notify Freddie Mac that the Borrower is ineligible for a modification or the Trial Period has been canceled. Servicers may report this code along with the date they made the decision. Report this code one time in the month following the month in which the decision took place. (ii) MI approval If the Mortgage is subject to mortgage insurance and approval and the Freddie Mac Flex Modification is not covered by delegation agreement, then the Servicer must obtain MI approval of a modification before offering the Borrower a Trial Period Plan. Additionally, if the Borrower cannot pay all amounts due plus the modification expenses, the Servicer must inquire if the MI will make an advance claim payment to pay all or part of the amounts due. (iii)Servicing Spread Upon modification, the Servicing Spread for Servicing a modified mortgage is equal to the lesser of: ■ The current Servicing Spread on the modified Mortgage, or ■ 25 basis points per annum multiplied by the interest-bearing UPB. For Mortgages with a partial principal forbearance, the Servicing Spread is based on the interestbearing UPB. (iv) Escrows Servicers must establish an Escrow account on the Mortgage if an Escrow account is not currently maintained on the Mortgage, provided its establishment is not prohibited under applicable federal, State or local law. Prior to or during the Servicer’s determination of the Borrower’s eligibility for a modification, the Servicer must perform an Escrow analysis in accordance with the Real Estate Settlement Procedures Act (RESPA) and any applicable federal, State or local law. The Servicer must then establish the Escrow account at the time the Trial Period Plan becomes effective and provide any disclosures required by applicable federal, State or local law within the time periods prescribed by such laws. In addition: ■ Any advances previously made by the Servicer or any advances that will be made during the Trial Period to pay property taxes or insurance premiums must be capitalized in the modified UPB as long as they were or will be paid to third parties prior to the Modification Effective Date. ■ For taxes and insurance premiums that are not yet due before the Modification Effective Date, the Servicer must determine the amount needed to establish the escrow account (Escrow shortage) that, together with the monthly Escrow payment included in the modified monthly Mortgage payment, will be sufficient to pay all future taxes and insurance premiums when they fall due. If the Borrower is unable to pay the Escrow shortage as a lump sum payment, then the Borrower must pay the shortage as part of the monthly payment on the modified Mortgage (“Project Monthly Escrow Shortage Payments”) as set forth in Section 9206.3(b)(ii). This amount may not be capitalized in the UPB of the Mortgage. ■ Once the Escrow account is established, the Borrower must continue to make monthly Escrow payments, even if the Borrower fails to comply with the Trial Period Plan and the Mortgage subsequently reinstates. (v) Execution of documents The Servicer must require all Borrowers and any other signatory to the Security Instrument to sign the modification agreement and all other required documents to qualify for a modification except the following: ■ A Borrower, co-Borrower or any signatory to the Security Instrument who is deceased, as evidenced by a death certificate or an obituary or newspaper article reporting the death ■ A Borrower, co-Borrower or any signatory to the Security Instrument who is divorced or legally separated from another party, as evidenced by a divorce decree signed by the court or court filed separation agreement, except for the Borrower or co-Borrower retaining possession and title to the property ■ A Borrower, co-Borrower or any signatory to the Security Instrument who is unrelated by marriage, civil union or similar domestic partnership under applicable law and who purchased or owned the property and has since vacated and no longer occupies the property, provided the remaining Borrower submits a copy of a recorded quit claim deed evidencing that the departed party has relinquished all rights to the property; or ■ Any signatory to a Security Instrument who is not a Borrower obligated on the Note, provided the Security Instrument contains a provision that authorizes any Borrower to modify the terms of the Security Instrument or the Note without such signatory’s consent Servicers may evaluate requests on a case-by-case basis when the Borrower is unable to sign due to circumstances such as mental incapacity, military deployment, etc. For Mortgages secured by a property owned by an eligible Living Trust all Freddie Mac Flex Modification-related documents must be executed by the Borrower as follows: ■ In his or her individual capacity; and ■ By the trustee on behalf of the Living Trust (vi) Texas Equity Section 50(a)(6) Mortgages When the Mortgaged Premises is secured by a Texas Equity Section 50(a)(6) Mortgage: ■ If the Borrower is eligible and qualifies for a Trial Period Plan and/or modification, the Servicer must offer the Borrower a Trial Period Plan and/or modification in accordance with Freddie Mac’s requirements in Chapters 9205 and 9206 ■ If the Servicer receives Borrower notification stating that the terms of the modification agreement do not comply with the provisions of Article XVI Section, 50(a)(6) of the Texas Constitution, the Servicer must notify Freddie Mac within seven Business Days of receipt of such objection or complaint via Freddie Mac Servicing Data Corrections and include the following: ❑ Freddie Mac loan number ❑ Servicer loan number ❑ Transaction type (i.e., Texas Home Equity modification) ❑ Accounting Cycle in which Freddie Mac settled the workout ❑ Servicer’s analysis (i.e., Borrower complaint related to Section 50(a)(6) of the Texas Constitution) ■ Upon receipt of Freddie Mac’s instructions, the Servicer must comply with any required response time frames to claims of defects and any other complaint in accordance with Section 8104.1(a) and the Texas Constitution

Refer to Bulletins 2026-G and 2026-11, which announced updates related to Freddie Mac’s new event-based default related reporting requirements. Beginning November 16, 2026, Servicers may implement the new requirements if they are operationally ready to do so. If a Servicer adopts the new event-based default related reporting standards before the mandatory effective date of September 27, 2027, it must comply with the associated Guide requirements that will be effective on September 27, 2027 and, upon such adoption, must discontinue monthly EDR reporting. This section contains information related to: ■ Determining the terms of a Freddie Mac Flex Modification® ■ Trial Period Plan requirements ■ Modified Mortgage conditions ■ Other modification conditions and requirements

(a) Determining the terms of a Freddie Mac Flex Modification Based on the information provided by the Servicer, Resolve® will determine the terms of the Freddie Mac Flex Modification Trial Period Plan and, following the Trial Period Plan, will determine the terms of the final modification agreement. Note: If the Borrower has previously made partial prepayments of principal (curtailments) and the monthly principal and interest installments were not recalculated in accordance with Section 8103.3(d), then the remaining Mortgage term must be calculated using the premodification interest-bearing UPB and the pre-modification principal and interest payment amount. The payment reduction target is considered satisfied once: ■ An incremental application of the steps to determine the terms of a Freddie Mac Flex Modification (i.e., interest rate application, Mortgage term extension, principal forbearance) achieves a post-modified Principal and Interest Payment reduction amount that just surpasses but is as close to 20% as possible (e.g., 20.01%) ■ The payment reduction target is not considered satisfied if the payment reduction amount is less than or precisely equal to 20% The Servicer must apply the steps to determine the terms for the Freddie Mac Flex Modification incrementally until the payment reduction target is achieved or until the steps are exhausted. The Servicer must offer the Freddie Mac Flex Modification if the modification will result in a post-modified Principal and Interest Payment amount that is less than or equal to the pre-modified payment amount. Based on the information provided by the Servicer, Resolve will determine the terms of the Freddie Mac Flex Modification according to the following steps: If the existing Mortgage is: …then A fixed-rate Mortgage (including ARMs and Step-Rate Mortgages with no additional interest rate adjustments or steps scheduled) The Servicer must use the existing interest rate. Determining the terms of a Freddie Mac Flex Modification Steps Requirements Step 1 Capitalize arrearages Capitalize arrearages in accordance with the requirements of Section 9206.3(b). Step 2 Establish the preliminary modification interest rate Set the preliminary modification interest rate to a fixed rate based on the following requirements using the interest rate in effect for the periodic payment due in the month of the evaluation date. Note: This step is solely to set the preliminary modification interest rate. Refer to step 3 for instructions on how to apply interest rate relief pursuant to Freddie Mac’s revised Freddie Mac Flex Modification waterfall requirements. An ARM or Step-Rate Mortgage that has not reached its final interest rate The Servicer must set the preliminary modification interest rate to the greater of: ■ The Freddie Mac modification interest rate in effect and posted as of the date the Servicer evaluates and determines the Borrower is eligible for a Trial Period Plan, or ■ The current interest rate Note: If the Freddie Mac modification interest rate is greater than the maximum step-rate/lifetime cap Note Rate, then the Servicer must set the modification rate to the maximum step-rate/lifetime cap Note Rate. Step 3 Determining the Freddie Mac Flex Modification interest rate If the post-modification mark-to-market loan-to-value (MTMLTV) is greater than or equal to 50% and The preliminary modification interest rate is: …then Greater than Freddie Mac’s modification interest rate in effect The Servicer must incrementally reduce the interest rate in 0.125% increments until the earlier of achieving: ■ The payment reduction target, or ■ The Freddie Mac modification interest rate Note: If the incremental reduction rate of 0.125% would cause the modification interest rate to fall below the posted modification interest rate, the Servicer must stop at the Freddie Mac modification interest rate. Less than or equal to Freddie Mac’s modification interest rate in effect The Mortgage will retain the preliminary modification interest rate as the postmodification contractual interest rate. If the post-modification MTMLTV is less than 50%, then the Borrower will retain the preliminary modification interest rate as the post-modification contractual interest rate. The interest rate used to calculate the Trial Period Plan payment must be the same rate that will be used to establish the terms of the modification agreement, and the Freddie Mac Flex Modification must result in a fixed-rate Mortgage. Step 4 Term extension If the payment reduction target has not been met after step 3, extend the remaining Mortgage term in monthly increments, if applicable, until the earlier of: ■ A Mortgage term in which the payment reduction target is reached, or ■ A Mortgage term of 480 months from the modification effective date Note: If a Mortgage has been subject to one or more previous principal curtailments, this could result in a post-modified maturity date that is earlier than the pre-modified maturity date. Step 5 Forbear principal If the payment reduction target has not been met after step 4 and the postmodification MTMLTV ratio (which includes capitalized amounts) is greater than 50%, forbear principal until the earlier of achieving: ■ The payment reduction target, ■ A result of 30% of the post-capitalized UPB (“the Forbearance Cap”), or ■ An amount that would create a post-modification MTMLTV ratio of 50% using the interest-bearing UPB Note: Interest must not accrue on any principal forbearance. Principal forbearance is payable upon the earliest of the maturity of the Mortgage loan modification, sale or transfer of the property, refinance of the Mortgage loan or payoff of the interest-bearing UPB. (i) Determination of eligibility based on Trial Period payment For a Freddie Mac Flex Modification, the estimated monthly modified principal and interest payment calculated when the terms of the Trial Period Plan are determined must comply with the applicable principal and interest payment reduction requirements set forth in Section 9206.1(c). If the Borrower makes all Trial Period payments timely, the Servicer must modify the Mortgage, even if, due to variances between estimated capitalization amounts and final capitalization amounts, the Freddie Mac Flex Modification does not meet the applicable requirements above. When determining eligibility for a Trial Period Plan offer, the Servicer is responsible for ensuring that its estimate of the amounts to be capitalized includes all known amounts. (ii) Resolve Servicers must use Resolve for all Mortgages for which Borrowers are being evaluated for a Trial Period Plan and modification under this chapter. Each Servicer shall use Resolve in accordance with (A) the requirements in this section, (B) the Payment Deferral and other instructions provided in Resolve Online Help and any other Documentation and (C) any other applicable provisions of the Guide, including Sections 2401.1 and 2404.2. Resolve does not adjust its terms for compliance with State-specific laws relating to loan modifications. Servicers must review the terms of any Trail Period Plan or modification agreement created using Resolve for compliance with applicable State laws and adjust the terms accordingly before transmitting them to the Borrower. The Servicer must access the Resolve application and submit all required data for Borrowers under consideration for a Freddie Mac Flex Modification: ■ For Borrowers who are current or less than 60 days delinquent, the Servicer must enter the information required for Resolve to make an imminent default determination in accordance with Section 9206.1(e) and enter the Imminent Default Hardship reason, if applicable, into Resolve ■ Upon successful completion of the Trial Period, the Servicer must update the principal balance as of the Modification Effective Date and any applicable fields to reflect the final amounts that must be capitalized If a Servicer is unable to complete a submission of a Trial Period Plan or modification agreement via Resolve, the Servicer should contact Customer Service at 800-FREDDIE.

(b) Trial Period Plan requirements A Borrower who is evaluated and determined eligible for a Freddie Mac Flex Modification must enter into a Trial Period Plan under which the Borrower will be required to remit three monthly payments at the estimated post-modified payment amount. (See also Section 9206.2(b)(ii) for Trial Period extension requirements for Borrowers in bankruptcy.) The Servicer may utilize a processing month following the end of the Trial Period to facilitate processing of the modification agreement in accordance with Section 9206.4(a)(ii). A payment is not required during the interim month. (i) Processing the Trial Period Plan offer If the Borrower qualifies for a modification, the Servicer must offer the Borrower a Trial Period Plan. ■ The Freddie Mac Flex Modification Trial Period Plan Notice Within five days of an evaluation decision, but no later than 30 days following receipt of the complete Borrower Response Package, the Servicer must send the Borrower a Borrower Evaluation Notice indicating the outcome of its decision. If the Borrower is approved for a Freddie Mac Flex Modification, the Servicer must send the Borrower a Freddie Mac Flex Modification Trial Period Plan Notice – Based on an Evaluation of a Complete BRP. The Freddie Mac Flex Modification Trial Period Plan Notice communicates the qualification decision to the Borrower and is included in Exhibit 93, Evaluation Notices. ■ The Freddie Mac Flex Modification Trial Period Plan Solicitation for offers under Section 9206.1(c)(iii) If the Borrower who is eligible under Section 9206.1(c)(iii) is approved for an offer for a Freddie Mac Flex Modification, the Servicer must send the Borrower a Freddie Mac Flex Modification Trial Period Plan Solicitation Offer – Not Based on an Evaluation of a BRP with Exhibit 1191, Freddie Mac Flex Modification® Solicitation Cover Letter, or Exhibit 1191B, Freddie Mac Flex Modification® Solicitation Cover Letter for Day 60 Rate Reset, as applicable, in accordance with the requirements described in Section 9102.5(a). If the Borrower is approved for a streamlined offer for a Freddie Mac Flex Modification due to an Eligible Disaster in accordance with the requirements of Section 9206.1(c)(v), the Servicer must send the Borrower the Freddie Mac Flex Modification Trial Period Plan Solicitation Offer – Not Based on an Evaluation of a BRP, amended as set forth in Exhibit 93 for Eligible Disasters, and Exhibit 1191A, Freddie Mac Flex Modification® Post-Disaster Forbearance Solicitation Cover Letter. The Freddie Mac Flex Modification Trial Period Plan Notice communicates the qualification decision to the Borrower and is included in Exhibit 93. ■ Special requirements for Mortgages with post-modification MTMLTV ratios less than 80% In addition to the requirements above, the Servicer must ensure the Trial Period Plan Notice for a Borrower whose Mortgage has a post-modified MTMLTV ratio less than 80% includes a statement reminding the Borrower that once the Mortgage has been modified, the Borrower can always pay more than the contractual payment without penalty if he or she desires to pay down the debt faster. ■ The Disaster Relief Modification Trial Period Plan Notice If the Borrower is approved for a Disaster Relief Modification in accordance with the requirements in Section 9203.4(i), the Servicer must send the Borrower a Disaster Relief Modification Trial Period Plan Notice. The Disaster Relief Modification Trial Period Plan Notice communicates the qualification decision to the Borrower and is included in Exhibit 93. ■ Authorized changes to Trial Period Plan Notices The Servicer may amend a Trial Period Plan Notice as necessary to request any Borrower cash contribution the Borrower promises to pay for expenses and delinquent amounts not capitalized, if applicable. Servicers may also amend a Trial Period Plan to condition the approval of the Mortgage modification on obtaining any necessary court and/or trustee approvals for Borrowers in bankruptcy and to address situations where a Borrower files for bankruptcy during the Trial Period. In addition, Servicers must amend the Trial Period Plan Notice as necessary to ensure compliance with applicable laws, rules and regulations. If the Borrower previously received a Chapter 7 bankruptcy discharge but did not reaffirm the Mortgage debt under applicable law, the Servicer must add the following language to the Trial Period Plan Notice under the section “Additional Trial Period Plan Information and Legal Notices:” If you previously received a Chapter 7 bankruptcy discharge, but did not reaffirm the mortgage debt under applicable law: You agree that you were discharged in a Chapter 7 bankruptcy proceeding subsequent to the execution of the Loan Documents. Based on this representation, Lender agrees that you will not have personal liability on the debt pursuant to this Trial Period Plan. If under applicable law, a Servicer may not establish an Escrow account, the Servicer must delete the following language from the Trial Period Plan Notice: Page 3: Your new monthly payment will include an escrow for property taxes, hazard insurance and other escrowed expenses. If the cost of your homeowners insurance, property tax assessment or other escrowed expenses increases, your monthly payment will increase as well. Page 3: If your monthly payment did not include escrows for taxes and insurance, you are now required to do so: You agree that any prior waiver that allowed you to pay directly for taxes and insurance is revoked. You agree to establish an escrow account and to pay required escrows into that account. ■ Effective Date of the Trial Period Plan When preparing the Trial Period Plan Notice, the Servicer must determine the Trial Period Plan Effective Date and the due date of the first Trial Period payment in accordance with the following instructions: Determining the Trial Period Plan Effective Date and the due date of the first Trial Period payment If the Servicer sends the Trial Period Plan Notice to the Borrower: … then the Trial Period Plan Effective Date and the due date of the first Trial Period payment is: On or before the 15th of the month The first day of the next month After the 15th of the month The first day of the month after the next month Example: If the Servicer sends the Trial Period Plan to the Borrower on June 10, the Trial Period Plan Effective Date and first Trial Period payment due dates are both July 1. If the Servicer sends the Trial Period Plan to the Borrower on June 17, the Trial Period Plan Effective Date and first Trial Period payment due date are both August 1. Notwithstanding the requirement above, after the Trial Period Plan Notice was sent to the Borrower, the Servicer may commence the Trial Period on the first day of the next month if the Borrower consents to commence the Trial Period earlier than the effective date requirements set forth above. If the Borrower fails to submit the first Trial Period payment on or before the last day of the first Trial Period month (e.g., on or before July 31st in the example above), the Servicer must consider the Trial Period Plan offer to be rejected by the Borrower. ■ Borrower acceptance of offer A Borrower’s notification to the Servicer indicating an intent to accept a Trial Period Plan offer within 14 days of the date of the offer constitutes sufficient notice solely for purposes of suspending foreclosure referral or sale in accordance with Sections 9301.2(c), 9301.2(d) and 9301.7(a). For purposes of legal acceptance, Borrowers are not required to sign or return the Trial Period Plan Notice. Timely receipt of the first payment due under the Trial Period Plan Notice is evidence of the Borrower’s acceptance of the Trial Period Plan terms and conditions. The Servicer must receive the Borrower’s first Trial Period payment on or before the last day of the month in which the Trial Period Plan Effective Date occurs (Trial Period Plan Offer Deadline). Otherwise, the Servicer must consider the Trial Period Plan offer to have expired. (ii) Requirements during the Trial Period The first Trial Period payment is due by the Trial Period Plan Offer Deadline. The Servicer must require the Borrower to remit timely payments. Each Trial Period payment must be received no later than the last day of the month in which the Trial Period payment is due. Borrowers who fail to make timely Trial Period payments are considered to have failed the Trial Period. Servicers must use good business judgment in determining whether Trial Period payments were received timely or if mitigating circumstances caused the payment to be late. Exceptions must be documented in the Servicer’s records. Although the Borrower may make scheduled Trial Period payments earlier than expected, the payments may not result in acceleration of the Modification Effective Date. During the Trial Period, the Servicer must: ■ Continue to report to Freddie Mac in accordance with the investor reporting requirements set forth in the Guide, which include the advancing of forecasted scheduled interest (and principal, if applicable) under the existing Mortgage terms to Freddie Mac, provided that the Servicer has not inactivated the Mortgage ■ Credit to an unapplied or suspense funds account, payments made by the Borrower during the Trial Period. Once enough funds have accumulated in the unapplied or suspense funds account to satisfy the oldest payment due under the existing Mortgage terms (including applying the portion of the Trial Period payment allocable to escrowed items to the existing or newly established Escrow account provided those amounts were due at the time of the oldest delinquent payment due date), the Servicer must apply the payment in accordance with the current Note and Security Instrument, or prior modification agreement, if applicable. ❑ Recommencement and/or initiation of collection efforts and foreclosure actions A Borrower is considered to have failed a Trial Period Plan if the Borrower fails to: ■ Make a Trial Period payment by the last day of the month in which the payment is due ■ Comply with the terms of the Trial Period Plan If the Borrower fails the Trial Period Plan because they did not meet the above requirements, the Servicer must begin or recommence collection efforts in accordance with Section 9102.4 or, if applicable, recommence any suspended foreclosure action or proceeding. Additionally, the Servicer must cancel the plan if the Borrower does not execute and return the modification agreement per the requirements set forth in Section 9206.4(a), the Servicer must begin or recommence collection efforts in accordance with Section 9102.4 or, if applicable, recommence any suspended foreclosure action or proceeding. After determining a Borrower has failed or the Trial Period was canceled according to the requirements under this Section 9206.2(b)(ii), the Servicer must report any initiated or resumed collection or foreclosure activity through EDR. See Section 9102.6 for information on EDR. Late charges may accrue during the Trial Period subject to the requirements of Section 9102.2. However, all accrued and unpaid late charges must be waived in the event the Mortgage is modified. ❑ Changes to tax and insurance premium payments If there are changes in a Borrower’s tax and insurance premium payments after the Borrower has been qualified for a Trial Period Plan, the Servicer is not required to re-qualify the Borrower based on the subsequent changes in taxes and insurance. However, the Servicer should provide written notice to the Borrower that explains the impact of the new Escrow payment on the modification. ❑ Borrowers in Trial Period Plans If a Borrower was in a Trial Period Plan prior to entering into a forbearance plan, the Borrower may be re-evaluated for a new Trial Period Plan within 30 days prior to or upon completion of the forbearance plan. Servicers must not resume or restart the terms of the previous Trial Period Plan prior to the start of the forbearance plan. Instead, the Servicer must evaluate the Borrower based on the status of the Mortgage at the time of the new evaluation and, if the Borrower meets all eligibility requirements, the Servicer must send a new Trial Period Plan offer to commence on or after the completion of the forbearance plan. For any subsequent modification submissions, the Trial Period Plan that the Borrower was in prior to the start of the forbearance plan will not be considered a failed Trial Period Plan for a Freddie Mac Flex Modification evaluation. ❑ Borrowers filing for bankruptcy during the Trial Period Borrowers who are in a Trial Period Plan and subsequently file for bankruptcy may not be denied a modification on the basis of the bankruptcy filing. The Servicer and its counsel must work with the Borrower or Borrower’s counsel to obtain any court and/or trustee approvals required in accordance with local court rules and procedures. Servicers should extend the Trial Period Plan as necessary to accommodate delays in obtaining court approvals or receiving a full remittance of the Borrower’s Trial Period payments when they are made to a trustee, but they must not extend the Trial Period beyond nine months, resulting in a total 12month Trial Period. In the event of a Trial Period extension, the Borrower must make a Trial Period payment for each month of the Trial Period, including any extension month, in order to remain eligible for a modification. See Section 9206.2(d)(i) for information on reporting an extended Trial Period Plan via EDR. ❑ Chapter 13 bankruptcy When a Borrower in an active Chapter 13 bankruptcy is in a Trial Period Plan and the Borrower has made post-petition payments on the Mortgage in the amount required by the Trial Period Plan, a Servicer must not object to confirmation of a Borrower’s Chapter 13 plan, move for relief from the automatic bankruptcy stay or move for dismissal of the Chapter 13 case on the basis that the Borrower paid only the amounts due under the Trial Period Plan, as opposed to the non-modified Mortgage payments. ❑ Chapter 7 bankruptcy Borrowers who have received a Chapter 7 bankruptcy discharge in a case involving the Mortgage and who did not reaffirm the Mortgage debt under applicable law, are eligible for a modification. ❑ Mortgages with temporary subsidy buydown plans When processing the Trial Period Plan offer on a Mortgage with a temporary subsidy buydown plan, the Servicer must make the appropriate changes to the applicable evaluation notice to reflect application of any buydown funds as a condition of completing the Mortgage modification, as applicable. See Section 9206.3(b)(i) for information about temporary subsidy buydown funds.

(c) Modified Mortgage conditions The Servicer must ensure that the modified Mortgage: 1. Retains its First Lien position and continues to be fully enforceable in accordance with its terms at the time of modification, throughout its modified term, and during any bankruptcy or foreclosure proceeding involving the Mortgage. The Servicer must record the modification agreement only when doing so is necessary to ensure its compliance with this First Lien retention and modification enforcement requirement. If recordation is not immediately necessary but may be required in the future to comply with this First Lien retention and modification enforcement requirement, the Servicer must have the modification agreement in recordable form. The modification agreement must be executed by the Borrower(s). Notwithstanding the foregoing, the Servicer must: (a) Ensure the following are current, as applicable: property taxes ground rents and assessments or other charges that, if delinquent, are or may become First Liens on the property or that if not paid would result in the subordination of Freddie Mac’s interests. (See Section 9301.6(e) regarding expenses that may become First Liens on the property.) (b) Obtain a title endorsement or similar title insurance product issued by a title insurance company prior to or at the time of the modification whenever it is necessary to record the modification agreement to retain the modified Mortgage’s First Lien position. For Cooperative Share Loans recognized as personal property, refer to Section 8801.1(f)(i) regarding certain Servicer warranties required in the event of a loan modification. (c) Obtain subordination agreements from any junior lienholders, if required by the title insurance company.

(d) Record the executed loan modification agreement, even if the jurisdiction where the property is located does not require the Servicer to do so, whenever recordation is necessary to retain the modified Mortgage’s First Lien position if, in the future, recordation is necessary to enforce the terms of the modified Mortgage (e.g., preforeclosure) or if it contains provisions related to the assignment of leases and rents. 2. Retains all living signers on the existing Note as obligors. Except as otherwise provided in Section 9206.2(d)(v), all Borrowers and any other signatory to the Security Instrument must sign the modification agreement and all other required documents. 3. Contains a due-on-transfer provision if the existing Mortgage documents do not contain such a provision (see Exhibit 78, Modification Due on Transfer Rider, for an example of a due-on-transfer rider) 4. Does not have any secondary financing included in the UPB 5. Does not provide any cash-out to the Borrower 6. Except as set forth in Section 9206.1(c)(v), has an Escrow account (see Chapter 8201) even if the existing Mortgage does not have an Escrow account 7. Retains mortgage insurance coverage if the existing Mortgage has such coverage, and the loss coverage percentage must remain the same 8. Contains an assignment of rents rider if the property is a 1-unit Investment Property or a 2- to 4-unit property (see Exhibit 77 for an example of an assignment of rents rider) 9. Retains any existing credit enhancement, such as an indemnification agreement. (Note: Mortgages subject to recourse are not eligible for a Freddie Mac Flex Modification®.) If the Servicer is not the provider of the credit enhancement, it must obtain written approval from the institution providing the enhancement. 10. Contains a Modification Bankruptcy Disclosure Rider for a Borrower who has been discharged from the Freddie Mac debt (see Exhibit 78A, Modification Bankruptcy Disclosure Rider, for an example of the rider) 11. Is a fully amortizing fixed-rate Mortgage. The Mortgage after modification must not be an interest-only Mortgage, a bi-weekly Mortgage or a daily simple interest Mortgage. 12. Has flood insurance coverage if the property is located in an area that has been identified by the Director of the Federal Emergency Management Agency (FEMA) as a Special Flood Hazard Area (SFHA). The Servicer must determine if the area where the property is located has been identified as a SFHA. This step must be taken even if the property was not located in a SFHA when the Mortgage was originated. If the property is located in a SFHA, then the Servicer must require that the Borrower purchase flood insurance as required in Section 8202.2. (d) Other modification conditions and requirements (i) EDR Resolve automatically reports the below EDR default action codes when applicable. Servicers may, but are not required to, report specific Freddie Mac Flex Modification activity to Freddie Mac as follows: ■ BF – “Standard Modification Trial Period.” Report default action code BF to notify Freddie Mac that the Borrower has entered into a Trial Period for the Freddie Mac Flex Modification. Servicers may report this code along with the Trial Period Plan Effective Date each month during the Trial Period. In addition, Servicers may report this code if they elect to use the interim month option under the Trial Period Plan or extend the Trial Period Plan to accommodate a Borrower’s bankruptcy filing. See Section 9206.4(a)(ii) for information on the interim month option and Section 9206.2(b)(ii) for information on extending a Borrower’s Trial Period Plan when the Borrower is in bankruptcy; or ■ HD – “Modification in Review.” Report default action code HD to notify Freddie Mac that the Borrower is being evaluated for a modification. Servicers may report this code along with the date they began reviewing the Borrower for the modification. Report this code one time in the month following the month in which the evaluation took place. ■ HE – “Ineligible/Cancel Modification.” Report default action code HE to notify Freddie Mac that the Borrower is ineligible for a modification or the Trial Period has been canceled. Servicers may report this code along with the date they made the decision. Report this code one time in the month following the month in which the decision took place. (ii) MI approval If the Mortgage is subject to mortgage insurance and approval and the Freddie Mac Flex Modification is not covered by delegation agreement, then the Servicer must obtain MI approval of a modification before offering the Borrower a Trial Period Plan. Additionally, if the Borrower cannot pay all amounts due plus the modification expenses, the Servicer must inquire if the MI will make an advance claim payment to pay all or part of the amounts due. (iii)Servicing Spread Upon modification, the Servicing Spread for Servicing a modified mortgage is equal to the lesser of: ■ The current Servicing Spread on the modified Mortgage, or ■ 25 basis points per annum multiplied by the interest-bearing UPB. For Mortgages with a partial principal forbearance, the Servicing Spread is based on the interestbearing UPB. (iv) Escrows Servicers must establish an Escrow account on the Mortgage if an Escrow account is not currently maintained on the Mortgage, provided its establishment is not prohibited under applicable federal, State or local law. Prior to or during the Servicer’s determination of the Borrower’s eligibility for a modification, the Servicer must perform an Escrow analysis in accordance with the Real Estate Settlement Procedures Act (RESPA) and any applicable federal, State or local law. The Servicer must then establish the Escrow account at the time the Trial Period Plan becomes effective and provide any disclosures required by applicable federal, State or local law within the time periods prescribed by such laws. In addition: ■ Any advances previously made by the Servicer or any advances that will be made during the Trial Period to pay property taxes or insurance premiums must be capitalized in the modified UPB as long as they were or will be paid to third parties prior to the Modification Effective Date. ■ For taxes and insurance premiums that are not yet due before the Modification Effective Date, the Servicer must determine the amount needed to establish the escrow account (Escrow shortage) that, together with the monthly Escrow payment included in the modified monthly Mortgage payment, will be sufficient to pay all future taxes and insurance premiums when they fall due. If the Borrower is unable to pay the Escrow shortage as a lump sum payment, then the Borrower must pay the shortage as part of the monthly payment on the modified Mortgage (“Project Monthly Escrow Shortage Payments”) as set forth in Section 9206.3(b)(ii). This amount may not be capitalized in the UPB of the Mortgage. ■ Once the Escrow account is established, the Borrower must continue to make monthly Escrow payments, even if the Borrower fails to comply with the Trial Period Plan and the Mortgage subsequently reinstates. (v) Execution of documents The Servicer must require all Borrowers and any other signatory to the Security Instrument to sign the modification agreement and all other required documents to qualify for a modification except the following: ■ A Borrower, co-Borrower or any signatory to the Security Instrument who is deceased, as evidenced by a death certificate or an obituary or newspaper article reporting the death ■ A Borrower, co-Borrower or any signatory to the Security Instrument who is divorced or legally separated from another party, as evidenced by a divorce decree signed by the court or court filed separation agreement, except for the Borrower or co-Borrower retaining possession and title to the property ■ A Borrower, co-Borrower or any signatory to the Security Instrument who is unrelated by marriage, civil union or similar domestic partnership under applicable law and who purchased or owned the property and has since vacated and no longer occupies the property, provided the remaining Borrower submits a copy of a recorded quit claim deed evidencing that the departed party has relinquished all rights to the property; or ■ Any signatory to a Security Instrument who is not a Borrower obligated on the Note, provided the Security Instrument contains a provision that authorizes any Borrower to modify the terms of the Security Instrument or the Note without such signatory’s consent Servicers may evaluate requests on a case-by-case basis when the Borrower is unable to sign due to circumstances such as mental incapacity, military deployment, etc. For Mortgages secured by a property owned by an eligible Living Trust all Freddie Mac Flex Modification-related documents must be executed by the Borrower as follows: ■ In his or her individual capacity; and ■ By the trustee on behalf of the Living Trust (vi) Texas Equity Section 50(a)(6) Mortgages When the Mortgaged Premises is secured by a Texas Equity Section 50(a)(6) Mortgage: ■ If the Borrower is eligible and qualifies for a Trial Period Plan and/or modification, the Servicer must offer the Borrower a Trial Period Plan and/or modification in accordance with Freddie Mac’s requirements in Chapters 9205 and 9206 ■ If the Servicer receives Borrower notification stating that the terms of the modification agreement do not comply with the provisions of Article XVI Section, 50(a)(6) of the Texas Constitution, the Servicer must notify Freddie Mac within seven Business Days of receipt of such objection or complaint via Freddie Mac Servicing Data Corrections and include the following: ❑ Freddie Mac loan number ❑ Servicer loan number ❑ Transaction type (i.e., Texas Home Equity modification) ❑ Accounting Cycle in which Freddie Mac settled the workout ❑ Servicer’s analysis (i.e., Borrower complaint related to Section 50(a)(6) of the Texas Constitution) ■ Upon receipt of Freddie Mac’s instructions, the Servicer must comply with any required response time frames to claims of defects and any other complaint in accordance with Section 8104.1(a) and the Texas Constitution

This section contains information related to: ■ Determining the terms of a Freddie Mac Flex Modification® ■ Trial Period Plan requirements ■ Modified Mortgage conditions ■ Other modification conditions and requirements

(a) Determining the terms of a Freddie Mac Flex Modification Based on the information provided by the Servicer, Resolve® will determine the terms of the Freddie Mac Flex Modification Trial Period Plan and, following the Trial Period Plan, will determine the terms of the final modification agreement. Note: If the Borrower has previously made partial prepayments of principal (curtailments) and the monthly principal and interest installments were not recalculated in accordance with Section 8103.3(d), then the remaining Mortgage term must be calculated using the premodification interest-bearing UPB and the pre-modification principal and interest payment amount. The payment reduction target is considered satisfied once: ■ An incremental application of the steps to determine the terms of a Freddie Mac Flex Modification (i.e., interest rate application, Mortgage term extension, principal forbearance) achieves a post-modified Principal and Interest Payment reduction amount that just surpasses but is as close to 20% as possible (e.g., 20.01%) ■ The payment reduction target is not considered satisfied if the payment reduction amount is less than or precisely equal to 20% The Servicer must apply the steps to determine the terms for the Freddie Mac Flex Modification incrementally until the payment reduction target is achieved or until the steps are exhausted. The Servicer must offer the Freddie Mac Flex Modification if the modification will result in a post-modified Principal and Interest Payment amount that is less than or equal to the pre-modified payment amount. Based on the information provided by the Servicer, Resolve will determine the terms of the Freddie Mac Flex Modification according to the following steps: If the existing Mortgage is: …then A fixed-rate Mortgage (including ARMs and Step-Rate Mortgages with no additional interest rate adjustments or steps scheduled) The Servicer must use the existing interest rate. An ARM or Step-Rate Mortgage that has not reached its final interest rate The Servicer must set the preliminary modification interest rate to the greater of: ■ The Freddie Mac modification interest rate in effect and posted as of the date the Servicer evaluates and determines the Borrower is eligible for a Trial Period Plan, or ■ The current interest rate Note: If the Freddie Mac modification interest rate is greater than the maximum step-rate/lifetime cap Note Rate, then the Servicer must set the modification rate to the maximum step-rate/lifetime cap Note Rate. Step 3 Determining the Freddie Mac Flex Modification interest rate Determining the terms of a Freddie Mac Flex Modification Steps Requirements Step 1 Capitalize arrearages Capitalize arrearages in accordance with the requirements of Section 9206.3(b). Step 2 Establish the preliminary modification interest rate Set the preliminary modification interest rate to a fixed rate based on the following requirements using the interest rate in effect for the periodic payment due in the month of the evaluation date. Note: This step is solely to set the preliminary modification interest rate. Refer to step 3 for instructions on how to apply interest rate relief pursuant to Freddie Mac’s revised Freddie Mac Flex Modification waterfall requirements. If the post-modification mark-to-market loan-to-value (MTMLTV) is greater than or equal to 50% and The preliminary modification interest rate is: …then Greater than Freddie Mac’s modification interest rate in effect The Servicer must incrementally reduce the interest rate in 0.125% increments until the earlier of achieving: ■ The payment reduction target, or ■ The Freddie Mac modification interest rate Note: If the incremental reduction rate of 0.125% would cause the modification interest rate to fall below the posted modification interest rate, the Servicer must stop at the Freddie Mac modification interest rate. Less than or equal to Freddie Mac’s modification interest rate in effect The Mortgage will retain the preliminary modification interest rate as the postmodification contractual interest rate. If the post-modification MTMLTV is less than 50%, then the Borrower will retain the preliminary modification interest rate as the post-modification contractual interest rate. The interest rate used to calculate the Trial Period Plan payment must be the same rate that will be used to establish the terms of the modification agreement, and the Freddie Mac Flex Modification must result in a fixed-rate Mortgage. Step 4 Term extension If the payment reduction target has not been met after step 3, extend the remaining Mortgage term in monthly increments, if applicable, until the earlier of: ■ A Mortgage term in which the payment reduction target is reached, or ■ A Mortgage term of 480 months from the modification effective date Note: If a Mortgage has been subject to one or more previous principal curtailments, this could result in a post-modified maturity date that is earlier than the pre-modified maturity date. Step 5 Forbear principal If the payment reduction target has not been met after step 4 and the postmodification MTMLTV ratio (which includes capitalized amounts) is greater than 50%, forbear principal until the earlier of achieving: ■ The payment reduction target, ■ A result of 30% of the post-capitalized UPB (“the Forbearance Cap”), or ■ An amount that would create a post-modification MTMLTV ratio of 50% using the interest-bearing UPB Note: Interest must not accrue on any principal forbearance. Principal forbearance is payable upon the earliest of the maturity of the Mortgage loan modification, sale or transfer of the property, refinance of the Mortgage loan or payoff of the interest-bearing UPB. (i) Determination of eligibility based on Trial Period payment For a Freddie Mac Flex Modification, the estimated monthly modified principal and interest payment calculated when the terms of the Trial Period Plan are determined must comply with the applicable principal and interest payment reduction requirements set forth in Section 9206.1(c). If the Borrower makes all Trial Period payments timely, the Servicer must modify the Mortgage, even if, due to variances between estimated capitalization amounts and final capitalization amounts, the Freddie Mac Flex Modification does not meet the applicable requirements above. When determining eligibility for a Trial Period Plan offer, the Servicer is responsible for ensuring that its estimate of the amounts to be capitalized includes all known amounts. (ii) Resolve Servicers must use Resolve for all Mortgages for which Borrowers are being evaluated for a Trial Period Plan and modification under this chapter. Each Servicer shall use Resolve in accordance with (A) the requirements in this section, (B) the Payment Deferral and other instructions provided in Resolve Online Help and any other Documentation and (C) any other applicable provisions of the Guide, including Sections 2401.1 and 2404.2. Resolve does not adjust its terms for compliance with State-specific laws relating to loan modifications. Servicers must review the terms of any Trail Period Plan or modification agreement created using Resolve for compliance with applicable State laws and adjust the terms accordingly before transmitting them to the Borrower. The Servicer must access the Resolve application and submit all required data for Borrowers under consideration for a Freddie Mac Flex Modification: ■ For Borrowers who are current or less than 60 days delinquent, the Servicer must enter the information required for Resolve to make an imminent default determination in accordance with Section 9206.1(e) and enter the Imminent Default Hardship reason, if applicable, into Resolve ■ Upon successful completion of the Trial Period, the Servicer must update the principal balance as of the Modification Effective Date and any applicable fields to reflect the final amounts that must be capitalized If a Servicer is unable to complete a submission of a Trial Period Plan or modification agreement via Resolve, the Servicer should contact Customer Service at 800-FREDDIE.

(b) Trial Period Plan requirements A Borrower who is evaluated and determined eligible for a Freddie Mac Flex Modification must enter into a Trial Period Plan under which the Borrower will be required to remit three monthly payments at the estimated post-modified payment amount. (See also Section 9206.2(b)(ii) for Trial Period extension requirements for Borrowers in bankruptcy.) The Servicer may utilize a processing month following the end of the Trial Period to facilitate processing of the modification agreement in accordance with Section 9206.4(a)(ii). A payment is not required during the interim month. (i) Processing the Trial Period Plan offer If the Borrower qualifies for a modification, the Servicer must offer the Borrower a Trial Period Plan. ■ The Freddie Mac Flex Modification Trial Period Plan Notice Within five days of an evaluation decision, but no later than 30 days following receipt of the complete Borrower Response Package, the Servicer must send the Borrower a Borrower Evaluation Notice indicating the outcome of its decision. If the Borrower is approved for a Freddie Mac Flex Modification, the Servicer must send the Borrower a Freddie Mac Flex Modification Trial Period Plan Notice – Based on an Evaluation of a Complete BRP. The Freddie Mac Flex Modification Trial Period Plan Notice communicates the qualification decision to the Borrower and is included in Exhibit 93, Evaluation Notices. ■ The Freddie Mac Flex Modification Trial Period Plan Solicitation for offers under Section 9206.1(c)(iii) If the Borrower who is eligible under Section 9206.1(c)(iii) is approved for an offer for a Freddie Mac Flex Modification, the Servicer must send the Borrower a Freddie Mac Flex Modification Trial Period Plan Solicitation Offer – Not Based on an Evaluation of a BRP with Exhibit 1191, Freddie Mac Flex Modification® Solicitation Cover Letter, or Exhibit 1191B, Freddie Mac Flex Modification® Solicitation Cover Letter for Day 60 Rate Reset, as applicable, in accordance with the requirements described in Section 9102.5(a). If the Borrower is approved for a streamlined offer for a Freddie Mac Flex Modification due to an Eligible Disaster in accordance with the requirements of Section 9206.1(c)(v), the Servicer must send the Borrower the Freddie Mac Flex Modification Trial Period Plan Solicitation Offer – Not Based on an Evaluation of a BRP, amended as set forth in Exhibit 93 for Eligible Disasters, and Exhibit 1191A, Freddie Mac Flex Modification® Post-Disaster Forbearance Solicitation Cover Letter. The Freddie Mac Flex Modification Trial Period Plan Notice communicates the qualification decision to the Borrower and is included in Exhibit 93. ■ Special requirements for Mortgages with post-modification MTMLTV ratios less than 80% In addition to the requirements above, the Servicer must ensure the Trial Period Plan Notice for a Borrower whose Mortgage has a post-modified MTMLTV ratio less than 80% includes a statement reminding the Borrower that once the Mortgage has been modified, the Borrower can always pay more than the contractual payment without penalty if he or she desires to pay down the debt faster. ■ The Disaster Relief Modification Trial Period Plan Notice If the Borrower is approved for a Disaster Relief Modification in accordance with the requirements in Section 9203.4(i), the Servicer must send the Borrower a Disaster Relief Modification Trial Period Plan Notice. The Disaster Relief Modification Trial Period Plan Notice communicates the qualification decision to the Borrower and is included in Exhibit 93. ■ Authorized changes to Trial Period Plan Notices The Servicer may amend a Trial Period Plan Notice as necessary to request any Borrower cash contribution the Borrower promises to pay for expenses and delinquent amounts not capitalized, if applicable. Servicers may also amend a Trial Period Plan to condition the approval of the Mortgage modification on obtaining any necessary court and/or trustee approvals for Borrowers in bankruptcy and to address situations where a Borrower files for bankruptcy during the Trial Period. In addition, Servicers must amend the Trial Period Plan Notice as necessary to ensure compliance with applicable laws, rules and regulations. If the Borrower previously received a Chapter 7 bankruptcy discharge but did not reaffirm the Mortgage debt under applicable law, the Servicer must add the following language to the Trial Period Plan Notice under the section “Additional Trial Period Plan Information and Legal Notices:” If you previously received a Chapter 7 bankruptcy discharge, but did not reaffirm the mortgage debt under applicable law: You agree that you were discharged in a Chapter 7 bankruptcy proceeding subsequent to the execution of the Loan Documents. Based on this representation, Lender agrees that you will not have personal liability on the debt pursuant to this Trial Period Plan. If under applicable law, a Servicer may not establish an Escrow account, the Servicer must delete the following language from the Trial Period Plan Notice: Page 3: Your new monthly payment will include an escrow for property taxes, hazard insurance and other escrowed expenses. If the cost of your homeowners insurance, property tax assessment or other escrowed expenses increases, your monthly payment will increase as well. Page 3: If your monthly payment did not include escrows for taxes and insurance, you are now required to do so: You agree that any prior waiver that allowed you to pay directly for taxes and insurance is revoked. You agree to establish an escrow account and to pay required escrows into that account. ■ Effective Date of the Trial Period Plan When preparing the Trial Period Plan Notice, the Servicer must determine the Trial Period Plan Effective Date and the due date of the first Trial Period payment in accordance with the following instructions: Determining the Trial Period Plan Effective Date and the due date of the first Trial Period payment If the Servicer sends the Trial Period Plan Notice to the Borrower: … then the Trial Period Plan Effective Date and the due date of the first Trial Period payment is: On or before the 15th of the month The first day of the next month Determining the Trial Period Plan Effective Date and the due date of the first Trial Period payment If the Servicer sends the Trial Period Plan Notice to the Borrower: … then the Trial Period Plan Effective Date and the due date of the first Trial Period payment is: After the 15th of the month The first day of the month after the next month Example: If the Servicer sends the Trial Period Plan to the Borrower on June 10, the Trial Period Plan Effective Date and first Trial Period payment due dates are both July 1. If the Servicer sends the Trial Period Plan to the Borrower on June 17, the Trial Period Plan Effective Date and first Trial Period payment due date are both August 1. Notwithstanding the requirement above, after the Trial Period Plan Notice was sent to the Borrower, the Servicer may commence the Trial Period on the first day of the next month if the Borrower consents to commence the Trial Period earlier than the effective date requirements set forth above. If the Borrower fails to submit the first Trial Period payment on or before the last day of the first Trial Period month (e.g., on or before July 31st in the example above), the Servicer must consider the Trial Period Plan offer to be rejected by the Borrower. ■ Borrower acceptance of offer A Borrower’s notification to the Servicer indicating an intent to accept a Trial Period Plan offer within 14 days of the date of the offer constitutes sufficient notice solely for purposes of suspending foreclosure referral or sale in accordance with Sections 9301.2(c), 9301.2(d) and 9301.7(a). For purposes of legal acceptance, Borrowers are not required to sign or return the Trial Period Plan Notice. Timely receipt of the first payment due under the Trial Period Plan Notice is evidence of the Borrower’s acceptance of the Trial Period Plan terms and conditions. The Servicer must receive the Borrower’s first Trial Period payment on or before the last day of the month in which the Trial Period Plan Effective Date occurs (Trial Period Plan Offer Deadline). Otherwise, the Servicer must consider the Trial Period Plan offer to have expired. (ii) Requirements during the Trial Period The first Trial Period payment is due by the Trial Period Plan Offer Deadline. The Servicer must require the Borrower to remit timely payments. Each Trial Period payment must be received no later than the last day of the month in which the Trial Period payment is due. Borrowers who fail to make timely Trial Period payments are considered to have failed the Trial Period. Servicers must use good business judgment in determining whether Trial Period payments were received timely or if mitigating circumstances caused the payment to be late. Exceptions must be documented in the Servicer’s records. Although the Borrower may make scheduled Trial Period payments earlier than expected, the payments may not result in acceleration of the Modification Effective Date. During the Trial Period, the Servicer must: ■ Continue to report to Freddie Mac in accordance with the investor reporting requirements set forth in the Guide, which include the advancing of forecasted scheduled interest (and principal, if applicable) under the existing Mortgage terms to Freddie Mac, provided that the Servicer has not inactivated the Mortgage ■ Credit to an unapplied or suspense funds account, payments made by the Borrower during the Trial Period. Once enough funds have accumulated in the unapplied or suspense funds account to satisfy the oldest payment due under the existing Mortgage terms (including applying the portion of the Trial Period payment allocable to escrowed items to the existing or newly established Escrow account provided those amounts were due at the time of the oldest delinquent payment due date), the Servicer must apply the payment in accordance with the current Note and Security Instrument, or prior modification agreement, if applicable. ❑ Report the Trial Payment Received default related reporting event in accordance with Section 9102.6 and Exhibit 82, Default Reporting Dataset Guidelines, each time the Servicer receives a full Trial Period payment ❑ Recommencement and/or initiation of collection efforts and foreclosure actions A Borrower is considered to have failed a Trial Period Plan if the Borrower fails to: ■ Make a Trial Period payment by the last day of the month in which the payment is due ■ Comply with the terms of the Trial Period Plan If the Borrower fails the Trial Period Plan because they did not meet the above requirements, the Servicer must begin or recommence collection efforts in accordance with Section 9102.4 or, if applicable, recommence any suspended foreclosure action or proceeding. Additionally, the Servicer must cancel the plan if the Borrower does not execute and return the modification agreement per the requirements set forth in Section 9206.4(a), the Servicer must begin or recommence collection efforts in accordance with Section 9102.4 or, if applicable, recommence any suspended foreclosure action or proceeding. After determining a Borrower has failed or the Trial Period was canceled according to the requirements under this Section 9206.2(b)(ii), the Servicer must report any default related events related to initiated or resumed collection or foreclosure activity in accordance with Section 9102.6 and Exhibit 82. Late charges may accrue during the Trial Period subject to the requirements of Section 9102.2. However, all accrued and unpaid late charges must be waived in the event the Mortgage is modified. ❑ Changes to tax and insurance premium payments If there are changes in a Borrower’s tax and insurance premium payments after the Borrower has been qualified for a Trial Period Plan, the Servicer is not required to re-qualify the Borrower based on the subsequent changes in taxes and insurance. However, the Servicer should provide written notice to the Borrower that explains the impact of the new Escrow payment on the modification. ❑ Borrowers in Trial Period Plans If a Borrower was in a Trial Period Plan prior to entering into a forbearance plan, the Borrower may be re-evaluated for a new Trial Period Plan within 30 days prior to or upon completion of the forbearance plan. Servicers must not resume or restart the terms of the previous Trial Period Plan prior to the start of the forbearance plan. Instead, the Servicer must evaluate the Borrower based on the status of the Mortgage at the time of the new evaluation and, if the Borrower meets all eligibility requirements, the Servicer must send a new Trial Period Plan offer to commence on or after the completion of the forbearance plan. For any subsequent modification submissions, the Trial Period Plan that the Borrower was in prior to the start of the forbearance plan will not be considered a failed Trial Period Plan for a Freddie Mac Flex Modification evaluation. ❑ Borrowers filing for bankruptcy during the Trial Period Borrowers who are in a Trial Period Plan and subsequently file for bankruptcy may not be denied a modification on the basis of the bankruptcy filing. The Servicer and its counsel must work with the Borrower or Borrower’s counsel to obtain any court and/or trustee approvals required in accordance with local court rules and procedures. Servicers should extend the Trial Period Plan as necessary to accommodate delays in obtaining court approvals or receiving a full remittance of the Borrower’s Trial Period payments when they are made to a trustee, but they must not extend the Trial Period beyond nine months, resulting in a total 12month Trial Period. In the event of a Trial Period extension, the Borrower must make a Trial Period payment for each month of the Trial Period, including any extension month, in order to remain eligible for a modification. ❑ Chapter 13 bankruptcy When a Borrower in an active Chapter 13 bankruptcy is in a Trial Period Plan and the Borrower has made post-petition payments on the Mortgage in the amount required by the Trial Period Plan, a Servicer must not object to confirmation of a Borrower’s Chapter 13 plan, move for relief from the automatic bankruptcy stay or move for dismissal of the Chapter 13 case on the basis that the Borrower paid only the amounts due under the Trial Period Plan, as opposed to the non-modified Mortgage payments. ❑ Chapter 7 bankruptcy Borrowers who have received a Chapter 7 bankruptcy discharge in a case involving the Mortgage and who did not reaffirm the Mortgage debt under applicable law, are eligible for a modification. ❑ Mortgages with temporary subsidy buydown plans When processing the Trial Period Plan offer on a Mortgage with a temporary subsidy buydown plan, the Servicer must make the appropriate changes to the applicable evaluation notice to reflect application of any buydown funds as a condition of completing the Mortgage modification, as applicable. See Section 9206.3(b)(i) for information about temporary subsidy buydown funds.

(c) Modified Mortgage conditions The Servicer must ensure that the modified Mortgage: 1. Retains its First Lien position and continues to be fully enforceable in accordance with its terms at the time of modification, throughout its modified term, and during any bankruptcy or foreclosure proceeding involving the Mortgage. The Servicer must record the modification agreement only when doing so is necessary to ensure its compliance with this First Lien retention and modification enforcement requirement. If recordation is not immediately necessary but may be required in the future to comply with this First Lien retention and modification enforcement requirement, the Servicer must have the modification agreement in recordable form. The modification agreement must be executed by the Borrower(s). Notwithstanding the foregoing, the Servicer must: (a) Ensure the following are current, as applicable: property taxes ground rents and assessments or other charges that, if delinquent, are or may become First Liens on the property or that if not paid would result in the subordination of Freddie Mac’s interests. (See Section 9301.6(e) regarding expenses that may become First Liens on the property.) (b) Obtain a title endorsement or similar title insurance product issued by a title insurance company prior to or at the time of the modification whenever it is necessary to record the modification agreement to retain the modified Mortgage’s First Lien position. For Cooperative Share Loans recognized as personal property, refer to Section 8801.1(f)(i) regarding certain Servicer warranties required in the event of a loan modification. (c) Obtain subordination agreements from any junior lienholders, if required by the title insurance company.

(d) Record the executed loan modification agreement, even if the jurisdiction where the property is located does not require the Servicer to do so, whenever recordation is necessary to retain the modified Mortgage’s First Lien position if, in the future, recordation is necessary to enforce the terms of the modified Mortgage (e.g., preforeclosure) or if it contains provisions related to the assignment of leases and rents. 2. Retains all living signers on the existing Note as obligors. Except as otherwise provided in Section 9206.2(d)(v), all Borrowers and any other signatory to the Security Instrument must sign the modification agreement and all other required documents. 3. Contains a due-on-transfer provision if the existing Mortgage documents do not contain such a provision (see Exhibit 78, Modification Due on Transfer Rider, for an example of a due-on-transfer rider) 4. Does not have any secondary financing included in the UPB 5. Does not provide any cash-out to the Borrower 6. Except as set forth in Section 9206.1(c)(v), has an Escrow account (see Chapter 8201) even if the existing Mortgage does not have an Escrow account 7. Retains mortgage insurance coverage if the existing Mortgage has such coverage, and the loss coverage percentage must remain the same 8. Contains an assignment of rents rider if the property is a 1-unit Investment Property or a 2- to 4-unit property (see Exhibit 77 for an example of an assignment of rents rider) 9. Retains any existing credit enhancement, such as an indemnification agreement. (Note: Mortgages subject to recourse are not eligible for a Freddie Mac Flex Modification®.) If the Servicer is not the provider of the credit enhancement, it must obtain written approval from the institution providing the enhancement. 10. Contains a Modification Bankruptcy Disclosure Rider for a Borrower who has been discharged from the Freddie Mac debt (see Exhibit 78A, Modification Bankruptcy Disclosure Rider, for an example of the rider) 11. Is a fully amortizing fixed-rate Mortgage. The Mortgage after modification must not be an interest-only Mortgage, a bi-weekly Mortgage or a daily simple interest Mortgage. 12. Has flood insurance coverage if the property is located in an area that has been identified by the Director of the Federal Emergency Management Agency (FEMA) as a Special Flood Hazard Area (SFHA). The Servicer must determine if the area where the property is located has been identified as a SFHA. This step must be taken even if the property was not located in a SFHA when the Mortgage was originated. If the property is located in a SFHA, then the Servicer must require that the Borrower purchase flood insurance as required in Section 8202.2. (d) Other modification conditions and requirements (i) Default reporting Resolve automatically reports applicable default reporting related to Freddie Mac Flex Modifications. (ii) MI approval If the Mortgage is subject to mortgage insurance and approval and the Freddie Mac Flex Modification is not covered by delegation agreement, then the Servicer must obtain MI approval of a modification before offering the Borrower a Trial Period Plan. Additionally, if the Borrower cannot pay all amounts due plus the modification expenses, the Servicer must inquire if the MI will make an advance claim payment to pay all or part of the amounts due. (iii)Servicing Spread Upon modification, the Servicing Spread for Servicing a modified mortgage is equal to the lesser of: ■ The current Servicing Spread on the modified Mortgage, or ■ 25 basis points per annum multiplied by the interest-bearing UPB. For Mortgages with a partial principal forbearance, the Servicing Spread is based on the interestbearing UPB. (iv) Escrows Servicers must establish an Escrow account on the Mortgage if an Escrow account is not currently maintained on the Mortgage, provided its establishment is not prohibited under applicable federal, State or local law. Prior to or during the Servicer’s determination of the Borrower’s eligibility for a modification, the Servicer must perform an Escrow analysis in accordance with the Real Estate Settlement Procedures Act (RESPA) and any applicable federal, State or local law. The Servicer must then establish the Escrow account at the time the Trial Period Plan becomes effective and provide any disclosures required by applicable federal, State or local law within the time periods prescribed by such laws. In addition: ■ Any advances previously made by the Servicer or any advances that will be made during the Trial Period to pay property taxes or insurance premiums must be capitalized in the modified UPB as long as they were or will be paid to third parties prior to the Modification Effective Date. ■ For taxes and insurance premiums that are not yet due before the Modification Effective Date, the Servicer must determine the amount needed to establish the escrow account (Escrow shortage) that, together with the monthly Escrow payment included in the modified monthly Mortgage payment, will be sufficient to pay all future taxes and insurance premiums when they fall due. If the Borrower is unable to pay the Escrow shortage as a lump sum payment, then the Borrower must pay the shortage as part of the monthly payment on the modified Mortgage (“Project Monthly Escrow Shortage Payments”) as set forth in Section 9206.3(b)(ii). This amount may not be capitalized in the UPB of the Mortgage. ■ Once the Escrow account is established, the Borrower must continue to make monthly Escrow payments, even if the Borrower fails to comply with the Trial Period Plan and the Mortgage subsequently reinstates. (v) Execution of documents The Servicer must require all Borrowers and any other signatory to the Security Instrument to sign the modification agreement and all other required documents to qualify for a modification except the following: ■ A Borrower, co-Borrower or any signatory to the Security Instrument who is deceased, as evidenced by a death certificate or an obituary or newspaper article reporting the death ■ A Borrower, co-Borrower or any signatory to the Security Instrument who is divorced or legally separated from another party, as evidenced by a divorce decree signed by the court or court filed separation agreement, except for the Borrower or co-Borrower retaining possession and title to the property ■ A Borrower, co-Borrower or any signatory to the Security Instrument who is unrelated by marriage, civil union or similar domestic partnership under applicable law and who purchased or owned the property and has since vacated and no longer occupies the property, provided the remaining Borrower submits a copy of a recorded quit claim deed evidencing that the departed party has relinquished all rights to the property; or ■ Any signatory to a Security Instrument who is not a Borrower obligated on the Note, provided the Security Instrument contains a provision that authorizes any Borrower to modify the terms of the Security Instrument or the Note without such signatory’s consent Servicers may evaluate requests on a case-by-case basis when the Borrower is unable to sign due to circumstances such as mental incapacity, military deployment, etc. For Mortgages secured by a property owned by an eligible Living Trust all Freddie Mac Flex Modification-related documents must be executed by the Borrower as follows: ■ In his or her individual capacity; and ■ By the trustee on behalf of the Living Trust (vi) Texas Equity Section 50(a)(6) Mortgages When the Mortgaged Premises is secured by a Texas Equity Section 50(a)(6) Mortgage: ■ If the Borrower is eligible and qualifies for a Trial Period Plan and/or modification, the Servicer must offer the Borrower a Trial Period Plan and/or modification in accordance with Freddie Mac’s requirements in Chapters 9205 and 9206 ■ If the Servicer receives Borrower notification stating that the terms of the modification agreement do not comply with the provisions of Article XVI Section, 50(a)(6) of the Texas Constitution, the Servicer must notify Freddie Mac within seven Business Days of receipt of such objection or complaint via Freddie Mac Servicing Data Corrections and include the following: ❑ Freddie Mac loan number ❑ Servicer loan number ❑ Transaction type (i.e., Texas Home Equity modification) ❑ Accounting Cycle in which Freddie Mac settled the workout ❑ Servicer’s analysis (i.e., Borrower complaint related to Section 50(a)(6) of the Texas Constitution) ■ Upon receipt of Freddie Mac’s instructions, the Servicer must comply with any required response time frames to claims of defects and any other complaint in accordance with Section 8104.1(a) and the Texas Constitution