Freddie Mac Single-Family Seller/Servicer Guide §9301.6 — Deficiency rights and property considerations (09/10/25)
Freddie Mac Guide §9301.6 (Deficiency rights and property considerations). Gap-fill (verbatim, ID-diff).
Verbatim regulatory text
Verbatim provisions from Freddie Mac Single-Family Seller/Servicer Guide §9301.6 — Deficiency rights and property considerations (09/10/25) — each quote is a verified substring of the regulator-published source snapshot, not retyped. Quoted for reference; this is not legal advice. The operational layer (P&P updates, prompts) lives in the regulation update kits.
Freddie Mac Guide 9301.6
(09/10/25) This section contains requirements related to: ■ Obtaining judgment for less than total indebtedness and preserving deficiency rights ■ Circumstances where preserving deficiency rights requires additional expense ■ Borrower abandonment of the property ■ Preserving the property during the foreclosure process ■ Expenses that may become First Liens on the property (a) Obtaining judgment for less than total indebtedness and preserving deficiency rights (i) Obtaining judgment for less than total indebtedness While Servicers are required to obtain judgment against the Borrower for the total indebtedness due under the Note and Mortgage in accordance with applicable law and the Guide, there may be cases where the foreclosure proceeding will be significantly shortened if the Servicer only seeks judgment for any amount less than the total indebtedness (e.g., for only principal and interest owed by the Borrower). If the Servicer determines that obtaining judgment for any amount less than the total indebtedness is in Freddie Mac’s best interest, it may do so. The Servicer must record the decision to obtain judgment for a lesser amount and the grounds for its decision in the Mortgage file. Prior to obtaining final judgment of foreclosure on any amount less than the total indebtedness, the Servicer must ensure that: ■ All requirements of the Guide have been met ■ The ratio of the sum of principal and interest to the market value of the Mortgaged Premises is 100% or more. The Servicer must obtain the value of the Mortgaged Premises in accordance with Section 9202.4(a), as if the Servicer were obtaining an “estimated market value” of the Mortgaged Premises for a short sale (see Section 9208.2(a)(ii) for instructions on obtaining a short sale property value.)
Freddie Mac Guide 9301.6
301-35 ■ In the event the Borrower reinstates or satisfies the Mortgage after judgment is obtained, the Servicer must instruct foreclosure counsel to vacate the judgment. If this is not possible and the Servicer has unreimbursed expenses or advances that are not collectable because it obtained judgment for an amount less than the total indebtedness, the Servicer may not seek reimbursement from Freddie Mac for those expenses or advances. (ii) When to preserve/waive deficiency rights ■ When to preserve deficiency rights In all instances, except as set forth in this section, where the foreclosure timeline will not be extended or additional fees/costs will not be incurred above the approved expense limits set forth in Exhibit 57A, Approved Attorney, Foreclosure, Mediation, Postponement Fees and Title Expenses, Servicers must work with their foreclosure attorney to preserve Freddie Mac’s right to pursue a deficiency action. Freddie Mac reserves the right to pursue deficiencies after the foreclosure sale on a case-by-case basis If the Mortgage has mortgage insurance, the Servicer must follow the MI’s instructions for pursuing deficiency judgments or waiving deficiency judgments. ■ When to waive deficiency rights The Servicer must adhere to the requirements provided in this section in order to waive Freddie Mac’s right to pursue a deficiency judgment against a Borrower. In many jurisdictions, applicable law provides Freddie Mac the right to pursue a deficiency balance after a foreclosure sale. In some instances, it may be in Freddie Mac’s best interest to waive the right to collect the deficiency including, but not limited to, cases where a waiver will do one of the following: ❑ Expedite the foreclosure ❑ Expeditiously resolve litigation and/or bankruptcy in Freddie Mac’s favor ❑ Result in a consent judgment conveying the Mortgaged Premises to Freddie Mac in Illinois ❑ Obtain a Borrower’s consent to the final judgment of foreclosure on an expedited basis ❑ Expedite or result in the entry of an order confirming or ratifying the foreclosure sale by the court
Freddie Mac Guide 9301.6
301-36 ❑ Minimize or avoid the imposition of additional redemption, confirmation or ratification periods, if State law would impose such additional periods If the Servicer determines that waiving Freddie Mac’s right to pursue a deficiency is in Freddie Mac’s best interest, then the Servicer may use its discretion without obtaining Freddie Mac’s prior approval to waive Freddie Mac’s right to pursue a deficiency. If the Servicer waives Freddie Mac’s right to pursue a deficiency, then at the time it reports the foreclosure sale results as required by Section 9301.9(a), the Servicer must notify Freddie Mac that the deficiency rights have not been preserved. The Servicer must record that it waived Freddie Mac’s deficiency rights, as well as the grounds for its decision, in the Mortgage file. Servicers must meet the requirements of Section 9301.9(a) when waiving deficiency rights. (b) Circumstances where preserving deficiency rights requires additional expense If the Servicer knows that additional attorney fees will be incurred when preserving Freddie Mac’s right to pursue a deficiency action, and the Servicer believes it is in Freddie Mac’s best interest to preserve Freddie Mac’s right to pursue a deficiency action against the Borrower, the Servicer must submit a request for pre-approval (RPA) to Freddie Mac via PAID (Payments Automated Intelligent and Dynamic) (see Exhibit 88, Servicing Tools) to recommend incurring additional attorney fees to perfect Freddie Mac’s rights to pursue a deficiency action. If possible, the Servicer should send the recommendation to Freddie Mac before the Servicer refers a Mortgage to foreclosure. However, under no circumstances should the Servicer delay referring a Mortgage to foreclosure to obtain Freddie Mac’s approval to preserve Freddie Mac’s deficiency rights. When submitting a recommendation to Freddie Mac, the Servicer must follow the instructions provided below. Servicers must only send a recommendation to Freddie Mac if the Servicer or its attorney is able to provide justification that would outweigh both the delays in the foreclosure process, and the increased fees and costs. Servicers should include an explanation for the request in the RPA comment field along with the electronic attachment of any supporting documentation. Servicers will not receive foreclosure timeline compensatory fee consideration for delaying the foreclosure process unless explicitly stated by Freddie Mac in its response to the Servicer’s recommendation. For all other issues related to preserving deficiency rights where additional expenses are required, Servicers should direct their questions to Freddie Mac (see Directory 5). (c) Borrower abandonment of the property
Freddie Mac Guide 9301.6
301-37 Preservation of deficiency rights should be sought against a Borrower who has abandoned the property. When these cases fall outside of the requirements set forth in Section 9301.6(a)(ii), it is the Servicer’s responsibility to send a recommendation to Freddie Mac by submitting a request for pre-approval to Freddie Mac within five Business Days of discovering the property is abandoned. For all other issues related to abandonment as it relates to the preservation of deficiency rights, Servicers should direct their questions to Freddie Mac (see Directory 5). (d) Preserving the property during the foreclosure process The Servicer must take the following actions to preserve and maintain the property during the foreclosure process: 1. Ensure the property is covered by property insurance throughout the foreclosure process, in accordance with the requirements of Section 9603.1(d). This includes taking all actions required in the mortgage clause of all applicable property insurance policies, including, but not limited to, providing all notices to the insurer required under such clause, in order to preserve the coverage and its maximum benefits for the Servicer and/or Freddie Mac, as mortgagee. 2. Take all necessary steps to protect the property from waste, damage and vandalism, and winterize, as appropriate (see Exhibit 57, 1- to 4-Unit Property Approved Expense Amounts, for an outline of winterization requirements.) Obtain approval from Freddie Mac for any property preservation expenses that either exceed Freddie Mac’s approval limits or will be incurred after the date of a foreclosure sale, including where the property is sold to a third party by submitting a request for pre- approval of expenses (RPA) to Freddie Mac via PAID (see Exhibit 88, Servicing Tools). (Refer to Section 9701.2(d) regarding reimbursement for property preservation expenses.) 3. Comply with any property preservation requirements of the FHA, RHS, VA or MI, if applicable 4. For leasehold Mortgages, ensure that payments required under the terms of the lease (i.e., ground rents) are made to prevent termination of the lease, if termination of the lease will impair Freddie Mac’s lien position or interest in the property Reporting lead-based paint violations If during the foreclosure process the Servicer becomes aware of lead-based paint violations on the property, then the Servicer must report such violations to Freddie Mac (see Directory 5) within five Business Days of learning of the violation. The Servicer must include:
Freddie Mac Guide 9301.6
301-38 ■ A copy of the citation ■ Copies of documentation related to a lead-based paint violation (e) Expenses that may become First Liens on the property The Servicer must obtain bills and make payment for all expenses requiring payment under the Security Instrument. Such expenses may include, but are not limited to, property taxes, ground rents, and assessments or other charges (e.g., utility assessments, condominium/homeowners association (HOA) or Cooperative Corporation assessments, and Condominium Unit maintenance fees or Cooperative Unit Maintenance Fees) that, if delinquent, are or may become First Liens priority on the property or that if not paid would result in the subordination of Freddie Mac’s interests. (See Section 8801.2(c) regarding Cooperative Share Loan expenses that may become First Liens on the property.) If the Borrower’s Escrow Funds are insufficient to pay these items as they become due during foreclosure, or, if there is no Escrow account or if the Escrow account does not hold funds for these expenses, the Servicer must advance funds to pay these expenses, when and to the extent necessary, to protect Freddie Mac’s interests. Additionally, the Servicer must contact Freddie Mac (see Directory 5) and obtain Freddie Mac’s written approval before making payments to taxing authorities when federal, State or local income tax liens would take priority over Freddie Mac’s First Lien position.
Freddie Mac Guide 9301.6
Complete Borrower Response Packages received after referral to foreclosure and other actions prior to foreclosure sale (09/10/25) This section contains requirements related to: ■ Complete Borrower Response Packages received after referral to foreclosure ■ Reviews and certifications prior to foreclosure sale ■ Foreclosure sale date extensions (a) Complete Borrower Response Packages received after referral to foreclosure (i) First Complete Borrower Response Package received after referral to foreclosure and greater than 37 days prior to the foreclosure sale date Refer to Section 9101.3.
Freddie Mac Guide 9301.6
301-39 (ii) All other Borrower Response Packages received after referral to foreclosure and greater than 37 days prior to the foreclosure sale date If the Servicer receives a complete Borrower Response Package after referral to foreclosure, the Servicer is not required to suspend foreclosure proceedings to review the complete Borrower Response Package and notify the Borrower of the decision. To accept an offer A Borrower’s notification to the Servicer that he or she intends to accept an offer may be demonstrated as follows: ■ Verbal notification ■ Written notification If a payment is required to legally accept an alternative to foreclosure offer, and the Borrower does not communicate a verbal or written rejection of the alternative to foreclosure offer, the Servicer must: ■ Postpone foreclosure actions where legally permitted at least through the last day of the month that the first payment is due under the terms of the alternative to foreclosure offer or until the deadline for Borrower acceptance has passed. ■ Delay the next legal action if the Servicer receives the first payment timely in accordance with the terms of a Trial Period Plan, repayment plan or forbearance plan, unless the Borrower breaches the plan. In the event a foreclosure sale occurs, the Servicer’s performance will be measured against Freddie Mac’s State foreclosure timelines without consideration given to the Servicer’s postponement of the foreclosure sale (refer to Exhibit 83, Freddie Mac State Foreclosure Timelines). Borrower Response Package received without a short sale purchase offer and foreclosure sale date is scheduled If the foreclosure sale has been scheduled and the Servicer sends the Borrower a Borrower Evaluation Notice that is an intent to pursue a short sale based on receipt of a complete Borrower Response Package, but a purchase offer was not received, then the Borrower Evaluation Notice must be amended to indicate the following: ■ Contact a real estate broker to list your property for sale if it is not currently listed ■ Once you receive a potential buyer’s offer, contact us immediately and we will review the offer to determine whether to accept it in full or partial satisfaction of your obligation
Freddie Mac Guide 9301.6
301-40 Short sale evaluations Once the Mortgage has been referred to foreclosure, the Servicer must continue with foreclosure proceedings during the short sale process, except where delay for motion of judgment is provided for Mortgages subject to judicial proceedings. However, the Servicer must not complete a foreclosure sale if the short sale has been approved based on a review of a purchase offer and a complete Borrower Response Package (or other streamlined documentation permitted in Section 9208.1(c)). The Servicer must suspend the foreclosure sale where permitted under State or local law. Deed-in-lieu of foreclosure evaluations Once the Mortgage has been referred to foreclosure, the Servicer must continue with foreclosure proceedings during the deed-in-lieu of foreclosure process, except where delay for motion of judgment is provided for Mortgages subject to judicial proceedings. The Servicer may only suspend a foreclosure sale after the executed deed and all required deed-in-lieu of foreclosure documents have been received by the Servicer. Additionally, the Servicer must receive an executed deed from the Borrower no later than 30 days prior to the scheduled foreclosure sale date. When considering a Borrower for a deed-in-lieu of foreclosure, the Servicer must ensure that there is sufficient time to complete processing of the deed-in-lieu of foreclosure (inclusive of sending the deed-in-lieu of foreclosure offer to the Borrower) so that the Servicer receives the executed deed no later than 30 days prior to the foreclosure sale date. (iii)Borrower Response Package received 37-15 days prior to the scheduled foreclosure sale date If a complete Borrower Response Package (including a short sale purchase offer, as applicable) is submitted between 37 and 15 days before a scheduled foreclosure sale date, the Servicer must expedite its review and make a determination regarding the Borrower’s request for assistance at least seven days before the scheduled foreclosure sale date. This will ensure that the Servicer will be able to determine whether it must send a foreclosure certification to the foreclosure counsel at least seven, but no more than 15 days prior to a scheduled foreclosure sale date, if appropriate or offer the Borrower an alternative to foreclosure. For a short sale transaction, if the Servicer has approved the short sale based on a review of a purchase offer and a complete Borrower Response Package (or other streamlined documentation as permitted), the Servicer must suspend the foreclosure sale where permitted under State or local law. If the Servicer sends the Borrower a Borrower Evaluation Notice that is an intent to pursue a Freddie Mac Standard Short Sale based on receipt of a complete Borrower
Freddie Mac Guide 9301.6
301-41 Response Package, but a purchase offer was not received, then the Borrower Evaluation Notice must be amended to indicate the following: ■ Contact a real estate broker to list your property for sale if it is not currently listed. If your property is not currently listed, there may not be adequate time to market the property or to review a potential buyer’s offer prior to the foreclosure sale date. ■ Once you receive a potential buyer’s offer, contact us immediately and we will review the offer to determine whether to accept it in full or partial satisfaction of your obligation The “Standard Short Sale – All Other Scenarios” model clause included in Exhibit 93, Evaluation Notices, is representative of this Borrower Evaluation Notice. (iv) Borrower Response Package received less than 15 days prior to the scheduled foreclosure sale date If a complete Borrower Response Package is received less than 15 days prior to a scheduled foreclosure sale date, the Servicer must first determine whether it can conduct an expedited review of the Borrower Response Package and render a decision by the latest foreclosure certification date (i.e., seven days prior to the scheduled foreclosure sale date) and if so, the Servicer must complete the review. If the Servicer offers the Borrower a home retention alternative to foreclosure, and the expiration of the 14-day Borrower response period will occur on or after a scheduled foreclosure sale date, it must not provide the certification to the foreclosure counsel and must make every effort to suspend the foreclosure sale for up to 14 days where legally permitted under State or local law Note: See Section 9301.7(a) for foreclosure suspension requirements related to short sales. The Servicer is not in violation of this requirement if: ■ A court with jurisdiction over the foreclosure proceeding (if any), or the bankruptcy court in a bankruptcy case, or the public official charged with carrying out the activity or event, fails or refuses to halt some or all activities or events in the matter after the Servicer has made reasonable efforts to move the court or request the public official for a cessation of the activity or event ■ The Servicer has taken action to protect the interests of Freddie Mac in response to action taken by the Borrower or other parties in the foreclosure process (e.g., bankruptcy filed by the Borrower, situations where the Borrower files a motion that requires a response, or similar situations)
Freddie Mac Guide 9301.6
301-42 The Servicer must document in the Mortgage file if any of the foregoing exceptions to the requirement to halt an existing foreclosure action are applicable. In the event a foreclosure sale occurs, the Servicer’s performance will be measured against Freddie Mac’s State foreclosure timelines without consideration given to the Servicer’s postponement of the foreclosure sale (refer to Exhibit 83). Solely for the purpose of suspending foreclosure sale, a Borrower’s notification to the Servicer that he or she intends to accept an offer may be demonstrated as follows: ■ Written notification ■ Remittance of a payment due under an alternative to foreclosure offer that requires payment (i.e., forbearance, repayment or Trial Period Plan) If the Borrower communicates an intent to accept the alternative to foreclosure within 14 days from the date of the Borrower Evaluation Notice offer as described above, the Servicer must suspend the foreclosure sale where legally permitted under State or local law. Additionally, in cases where a payment is required under the terms of an alternative to foreclosure offer, and the Borrower communicates a written intent to accept an alternative to foreclosure offer, the Servicer must: ■ Suspend the foreclosure sale until the last day of the month that the first payment is due under the terms of the alternative to foreclosure offer ■ Delay the next legal action in the foreclosure process until the first month following the end of the Trial Period Plan ■ Delay the next legal action unless the Borrower breaches the plan, if the Servicer receives the first payment timely in accordance with the terms of the terms of a repayment plan or forbearance plan ■ Cancel the foreclosure action as permitted by State or local law, If the Borrower complies with the terms of the Trial Period or other plan and the Mortgage is modified with a fully executed modification agreement or the Delinquency is cured (v) Foreclosure sale postponements Servicers are delegated the authority to approve foreclosure sale postponements. When determining whether to postpone a foreclosure sale, the Servicer must comply with the requirements in Sections 9301.7(a)(i), (ii), (iii) and (iv). Regardless of the reason for the foreclosure sale postponement, in the event a foreclosure sale occurs, the Servicer’s performance will be measured against Freddie Mac’s State foreclosure timelines (refer to Exhibit 83).