Freddie Mac Single-Family Seller/Servicer Guide 9301.7 — Complete Borrower Response Packages received after referral to foreclosure and other actions prior to foreclosure sale

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. (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 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 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) 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). See Exhibit 57A Approved Attorney, Foreclosure, Mediation and Postponement of fees and title expenses, for foreclosure attorney fees associated with delayed caused by compliance with Sections 9301.7(a)(i), (ii), (iii) and (iv). Additionally, with prior written approval from Freddie Mac, the Servicer may be reimbursed for foreclosure attorney fees that exceed the expense limits in Exhibit 57A. To obtain written approval from Freddie Mac, the Servicer must submit a request for pre-approval (RPA) using the RPA functionality in PAID (Payments Automated Intelligent and Dynamic) (see Exhibit 88, Servicing Tools). If a foreclosure sale is postponed due to Servicer non-compliance with the Guide including, but not limited to, the Servicer failing to provide the foreclosure certification, the Servicer will not receive any credit or consideration of State foreclosure timeline compensatory fees and will also be subject to any loss, expenses or other damages.

(b) Reviews and certifications prior to foreclosure sale (i) Pre-sale account review by the Servicer The Servicer must have written policies and procedures requiring a review of the Mortgage at least 30 days prior to the scheduled foreclosure sale date. The Servicer must review the account history to verify compliance with all required Borrower outreach, solicitation and evaluation requirements specified in Chapters 9101 and 9102 and that there is no approved payment arrangement, pending alternative to foreclosure offer or appeal for which the Borrower response period has not expired. The Servicer must document the results of their review in its Mortgage file or Servicing system. (ii) Certification to foreclosure counsel At least seven, but no more than 15 days prior to foreclosure sale, the Servicer must review the account and send written certification to the foreclosure counsel indicating that the foreclosure sale must continue unless: ■ The account review reveals that all Borrower outreach, solicitation and evaluation requirements have not been achieved, or ■ There is an approved payment arrangement, pending alternative to foreclosure offer or appeal for which the Borrower response period has not expired If any of the above exceptions apply, then the Servicer must not provide the certification and must make every effort to stop a scheduled foreclosure sale. The Servicer must document the results of its review in its Mortgage file or Servicing system. The Servicer must work with the foreclosure counsel to develop a process for receipt of the foreclosure certification to prevent unnecessary delays. If the foreclosure counsel cancels the foreclosure sale due to the Servicer’s failure to provide the foreclosure certification timely, the Servicer will be subject to compensatory fees for delays resulting from such a cancelation.

(c) Foreclosure sale date extensions In some instances, it may be in Freddie Mac’s best interest to extend the foreclosure sale date including, but not limited to, cases when an extension of the sale will do one of the following: ■ Expedite the foreclosure ■ Expeditiously resolve litigation and/or bankruptcy in Freddie Mac’s favor ■ Obtain a Borrower’s consent to the final judgment of foreclosure on an expedited basis If the Servicer determines that extending the foreclosure sale date is in Freddie Mac’s best interest, then the Servicer may use its discretion without obtaining Freddie Mac’s prior approval to extend the sale. The Servicer must record the decision to extend the foreclosure sale date and the basis for its decision in the Mortgage file. Foreclosure timeline requirements set forth in Section 9301.11(a) will not be waived in consideration of extending the foreclosure sale date. Servicers and their counsel must use their discretion to determine whether extending the foreclosure sale date is in Freddie Mac’s best interest based on the jurisdiction, the Mortgage and the Mortgaged Premises that is the subject of the foreclosure.