Freddie Mac Single-Family Seller/Servicer Guide 9701.2 — Property-related reimbursements

This section contains requirements related to: ■ Reimbursement of property taxes ■ Reimbursement of insurance premiums ■ Reimbursement of liens ■ Reimbursement for property inspection and property preservation expenses ■ Reimbursement of condominium/homeowners association (HOA) or Cooperative Corporation assessments and ground rents

(a) Reimbursement of property taxes The Servicer must administer all funds in the Borrower’s Escrow account to pay expenses in accordance with the terms set forth in the Note and the Security Instrument, in addition to applicable federal, State and local laws. The Servicer must maintain sufficient Escrows and/or verify timely payments of property taxes in accordance with Sections 8201.1 and 9301.6(e). Freddie Mac will reimburse the Servicer that is in compliance with the requirements of Sections 8201.1 and 9301.6(e) for property taxes that were incurred and paid to a taxing authority as follows: ■ For foreclosure sales and deeds-in-lieu of foreclosure, property taxes are reimbursable if incurred up to 12 months prior to the DDLPI through the foreclosure sale or the deed-inlieu of foreclosure date ■ For short-sales, charge-offs or third-party sales, property taxes are reimbursable if incurred and paid to a taxing authority up to 12 months prior to the DDLPI through the payoff date. (Refer to Section 9701.1(e) for a description of expense reimbursement requests and submission time frames.) If the Servicer advanced property taxes as required in Section 8201.1 and entered into a repayment plan for the property taxes with the Borrower, and the Borrower then breached the repayment plan during the repayment period, Freddie Mac will reimburse the Servicer for the property taxes the Borrower did not pay if the Servicer provides Freddie Mac with documentation of: 1. The repayment plan and the sequence of events 2. Evidence that the Servicer initiated foreclosure as required in Section 8201.1 Except as otherwise provided herein, Freddie Mac will reimburse the Servicer for the first tax penalty incurred on a non-escrowed Mortgage that goes to foreclosure on the condition that the Servicer has complied with the requirements of Section 8201.1. Freddie Mac will not reimburse the Servicer for the interest or other charges accrued on delinquent property taxes. Freddie Mac will reimburse Servicers for the first and second tax penalty incurred on a nonescrowed Mortgage in the State of California only in instances where the Servicer is not notified of unpaid property taxes on a non-escrowed Mortgage until the second tax penalty was assessed. Freddie Mac will not reimburse the Servicer for any late fees, interest and penalties other than: ■ The first tax penalty on a non-escrowed Mortgage (including interest if the taxing authority considers interest as a penalty or includes it as part of the penalty) ■ The first and second tax penalties on a non-escrowed Mortgage in California In California, properties are reassessed for supplemental taxes from the foreclosure sale date to the REO settlement date. A supplemental tax statement is often generated long after the REO settlement date. Therefore, within five days following the foreclosure sale or the deedin-lieu of foreclosure date, the Servicer must notify the taxing authority, in writing, to send any supplemental tax bills to Freddie Mac (see Directory 6). The Servicer must also send Freddie Mac a copy of the letter sent to the taxing authority.

(b) Reimbursement of insurance premiums Freddie Mac will reimburse the Servicer for property insurance premiums if they were incurred and paid to the insurer up to 12 months prior to the DDLPI. After the DDLPI, the following insurance expenses are reimbursable in every jurisdiction: ■ Mortgage insurance premiums are reimbursable if incurred after the DDLPI and before: ❑ The REO acquisition date. The acquisition date is the foreclosure sale date, the date of the expiration of the redemption period and/or the confirmation/ratification date, whichever occurs last. ❑ A deed-in-lieu of foreclosure has been successfully reported to Freddie Mac through Resolve® ❑ A short sale has been settled on Freddie Mac systems ■ Property insurance premiums paid through an Escrow account are reimbursable for a period up to: ❑ Twelve months after the foreclosure sale or cancelation of the policy (whichever occurs earlier) ❑ 14 days after the foreclosure sale or deed-in-lieu of foreclosure has been successfully reported to Freddie Mac through Resolve if the property did not revert to REO through foreclosure sale; or ❑ For short-sales, charge-offs or third-party sales, 14 days after completion of the workout settlement Note: Refer to Section 9701.1(e) for a description of expense reimbursement requests and submission time frames. ◼ Lender-Placed Insurance (LPI) premiums are reimbursable for a period up to 14 days after the final non-REO activity or up to 14 days after the foreclosure sale and or the deed-in-lieu of foreclosure has been successfully reported through Resolve. Freddie Mac will not reimburse the Servicer for LPI premiums for periods in which the Borrower obtained coverage meeting the requirements outlined in Chapter 8202 was already in place. LPI premiums for which the Servicer or an affiliated entity received compensation in violation of Section 8202.6 are not reimbursable.

(c) Reimbursement of liens Freddie Mac will reimburse the Servicer in most instances where the Servicer must pay expenses 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, as provided in the Guide. (Refer to Sections 9301.6(e) and 9701.2(e).) To be reimbursed, the Servicer must obtain written pre-approval from Freddie Mac (by submitting a request for pre-approval (RPA) via the RPA functionality in PAID (Payments Automated Intelligent and Dynamic) (see Exhibit 88, Servicing Tools)).

(d) Reimbursement for property inspection and property preservation expenses For each property inspection completed in accordance with the requirements of Section 9202.3(c), Freddie Mac will reimburse the Servicer the lesser of: ■ The actual cost of the property inspection; or ■ The applicable expense limit stated in Exhibit 57, 1- to 4-Unit Property Approved Expense Amounts In addition, the Servicer will be reimbursed for an interior property inspection obtained for a Freddie Mac Standard Deed-in-Lieu of Foreclosure pursuant to the requirements of Section 9209.4. In the case of abandoned properties, it may be necessary for the Servicer to incur certain property preservation expenses, such as the cost of utilities and expenses incurred to protect the property from waste, damage and vandalism. The Servicer will be reimbursed for Freddie Mac’s proportionate share of such property preservation expenses according to the guidelines in Exhibit 57 and Section 8403.1(c) for expenses incurred from the DDLPI through the reported foreclosure sale date, when the property reverts to REO. If the expense of the preservation exceeds Freddie Mac’s approval limits, or the expense will be incurred after the date of a foreclosure sale, including where the property sold to a third party, the Servicer must obtain Freddie Mac’s approval prior to incurring the expense by submitting an RPA of these costs via PAID. If the Servicer exceeds the expense limit in Exhibit 57 for emergency repairs, Freddie Mac may reimburse the Servicer if Freddie Mac is notified of the emergency via PAID by the next Business Day after the expense was incurred. If the Servicer’s determination to incur the expense was reasonable, as determined in Freddie Mac’s sole discretion, Freddie Mac will reimburse the Servicer for the expense. The Servicer is no longer responsible for property preservation expenses and will not be reimbursed for property preservation costs, including utility expenses, incurred after: ■ The reported foreclosure sale date or ■ If the property sold to a third party at the foreclosure sale, the foreclosure action is complete

(e) Reimbursement of condominium/HOA or Cooperative Corporation assessments and ground rents (i) Mortgages with Note Dates prior to February 14, 2014 Pursuant to Section 9603.1(a), Freddie Mac will pay the condominium/HOA or Cooperative Corporation assessments (see Chapter 8801 for special Servicing requirements for Cooperative Share Loans), Condominium Unit maintenance fees or Cooperative Unit Maintenance Fees and ground rents, as applicable, as they become due after the Servicer has successfully reported the foreclosure sale or deed-in-lieu of foreclosure via Resolve. If applicable State law creates a lien priority over Freddie Mac’s First Lien position for delinquent condominium/HOA or Cooperative Corporation assessments assessed preforeclosure, then Freddie Mac will reimburse the Servicer for its payment of regular assessments assessed preforeclosure in an amount no greater than the lesser of: ■ The actual amount in regular assessments advanced by the Servicer ■ The maximum amount in regular assessments that, per the project declaration or bylaws, would take priority over Freddie Mac’s First Lien position ■ The maximum amount in regular assessments that, per applicable State statute, would take priority over Freddie Mac’s First Lien position For Cooperative Share Loans, see Section 8801.2(c) regarding Cooperative Share Loan expenses that may become First Liens on the property. Unless otherwise provided in the Guide, Freddie Mac will not reimburse the Servicer for late fees, interest, collections expenses or attorney fees, regardless of whether such amounts may be included under the lien pursuant to applicable State law. (ii) Mortgages with Note Dates on or after February 14, 2014 Pursuant to Section 9603.1(a), Freddie Mac will pay the condominium/HOA or Cooperative Corporation assessments, Condominium Unit maintenance fees or Cooperative Unit Maintenance Fees and ground rents, as applicable, as they become due after the Servicer has successfully reported the foreclosure sale or deed-in-lieu of foreclosure via Resolve. If applicable State law creates a lien priority over Freddie Mac’s First Lien position for delinquent condominium/HOA or Cooperative Corporation assessments assessed preforeclosure, then Freddie Mac will reimburse the Servicer for its payment of regular assessments assessed preforeclosure in an amount equal to the lesser of the actual amount advanced or: ■ For Mortgages secured by property in the State of Florida: No more than 12 months (or any lesser amount provided by State statute) ■ For Mortgages secured by property in the State of Connecticut: No more than nine months (or any lesser amount provided by State statute) ■ For Mortgages secured by property in all other States (including States that provide an exception for Freddie Mac Mortgages): No more than six months (or any lesser amount provided by State statute) For Cooperative Share Loans, see Section 8801.2(c) regarding Cooperative Share Loan expenses that may become First Liens on the property. Unless otherwise provided in the Guide, Freddie Mac will not reimburse the Servicer for late fees, interest, collections expenses or attorney fees, regardless of whether such amounts may be included under the lien pursuant to applicable State law. (iii)Ground rents For leasehold Mortgages, if termination of the lease will impair Freddie Mac’s lien position or interest in the property, Freddie Mac will reimburse the Servicer for any payments it made pursuant to the terms of the lease (i.e., ground rents) to prevent termination of the lease and protect Freddie Mac’s lien position and interest in the property. Freddie Mac will reimburse the Servicer that is in compliance with the requirements of Sections 9301.6(d) and 9401.1(c) regarding leasehold Mortgages for ground rents paid as follows: ■ For foreclosures and deed-in-lieu of foreclosure: Ground rents are reimbursable if incurred and paid up to 12 months prior to the DDLPI through the foreclosure sale date ■ For short-sales, charge-offs or third-party sales; Ground rents are reimbursable if incurred and paid up to 12 months prior to the DDLPI through the payoff date Note: Refer to Section 9701.1(e) for a description of expense reimbursement request and submission time frames.