Freddie Mac Single-Family Seller/Servicer Guide §3602.4 — Appeal and dispute resolution processes (11/19/25)
Freddie Mac Guide §3602.4 (Appeal and dispute resolution processes). Gap-fill (verbatim, ID-diff).
Verbatim regulatory text
Verbatim provisions from Freddie Mac Single-Family Seller/Servicer Guide §3602.4 — Appeal and dispute resolution processes (11/19/25) — 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 3602.4
(11/19/25) This section contains requirements related to: ■ Survival of Freddie Mac’s remedies; misrepresentations by the Seller or Servicer ■ Appealing a Repurchase Demand due to violations of selling and origination representations and warranties ■ Appealing a Repurchase Demand or repurchase alternative issued due to Servicing violations (a) Survival of Freddie Mac’s remedies; misrepresentations by the Seller or Servicer Freddie Mac’s decision to require or allow a repurchase in no way diminishes its right to pursue further action such as disqualification, suspension or termination, in whole or in part, of the Servicing Contract and related Servicing Contract Rights under the provisions of Chapter 2301 and/or 3603. Freddie Mac may also exercise these remedies when its inspection of the documentation of a repurchased Mortgage reveals facts materially different from those for which Freddie Mac originally approved this repurchase.
Freddie Mac Guide 3602.4
602-14 (b) Appealing a Repurchase Demand due to violations of selling and origination representations and warranties Upon receipt of a Repurchase Demand for a violation, if the Seller/Servicer has additional supporting information and/or documentation that may affect Freddie Mac’s decision, they may file an appeal. See Section 3401.1(a) for information regarding Freddie Mac’s review of Corrections submitted by the Seller/Servicer. (i) First appeal Within 60 days from the date of Freddie Mac’s Repurchase Demand or within such other time frame as may be specified by Freddie Mac, the Seller/Servicer may submit the first appeal. The first Appeal Process is as follows: 1. The appeal must be sent in writing to the Freddie Mac office requesting the repurchase 2. The Seller/Servicer’s appeal package must contain: ■ A statement of all relevant facts concerning the Mortgage ■ An explanation of why these facts were not disclosed in the file during the origination of the Mortgage ■ A statement of why Freddie Mac’s decision should be reversed ■ All available documentation supporting the basis for the first appeal 3. If the Seller/Servicer submits a timely appeal, Freddie Mac will review the appeal and advise the Seller/Servicer in writing of the appeal decision 4. At any time during the first Appeal Process, the Seller/Servicer has the right to provide a Correction of an alleged Significant Defect (as defined in Section 3401.1(a)) 5. If the first appeal is denied, the Seller/Servicer must: ■ Comply with the terms of the Repurchase Demand within 15 days from the date of Freddie Mac’s denial letter or within such other time frame as specified by Freddie Mac; or ■ Submit a second appeal as set forth in Section 3602.4(b)(ii) below 6. In order for Freddie Mac to have the right to seek a remedy based on the breach(es) alleged in the Repurchase Demand, Freddie Mac must respond to the Seller/Servicer’s first written appeal within 60 days of receipt of the Seller/Servicer’s written appeal
Freddie Mac Guide 3602.4
602-15 If a first appeal is not received within the 60-day period or within such other time frame as may be specified by Freddie Mac, the Seller/Servicer will have no further right to challenge such Repurchase Demand and will not be able to avail itself of the Impasse Process, the Management Escalation Process or the IDR Process. (ii) Second appeal If information that was not available at the time of the first appeal (and was therefore not submitted to Freddie Mac for consideration) becomes available after submission of the first appeal, the Seller/Servicer may submit an additional appeal (“second appeal”) of the Repurchase Demand in writing within 15 days from the date of Freddie Mac’s denial letter of the first appeal. The second appeal must provide new material documentation or information that was not previously available and must contain the items described in Section 3602.4(b)(i)(2). The second Appeal Process is as follows: 1. Freddie Mac will review the second appeal and attempt to resolve the dispute 2. At any time during the second Appeal Process, the Seller/Servicer may provide a Correction of an alleged Significant Defect as set forth in the Guide 3. If the second appeal is denied, the Seller/Servicer must, within 15 days from the date of Freddie Mac’s denial letter, initiate the Impasse Process pursuant to the terms of Section 3602.4(b)(iii) or implement the remedy requested by the Repurchase Demand 4. If the Impasse Process is not initiated within the 15-day period, the Seller/Servicer will: ■ Have no further right to challenge the Repurchase Demand, ■ Not be able to avail itself of the Impasse Process, the Management Escalation Process or the IDR Process in connection with the Mortgage in question, and ■ Be obligated to timely comply with the terms of the Repurchase Demand 5. In order for Freddie Mac to have the right to seek a remedy based on the breach(es) alleged in the Repurchase Demand, Freddie Mac must respond to the Seller/Servicer’s first written appeal within 60 days of receipt of the Seller/Servicer’s written appeal If new material information is not available after submission of the first appeal, the Seller/Servicer may initiate the Impasse Process (described in Section 3602.4(b)(iii) below) within 15 days from the date of Freddie Mac’s denial letter of the first appeal.
Freddie Mac Guide 3602.4
602-16 (iii)Impasse Process If the Seller/Servicer wishes to challenge the Repurchase Demand after conclusion of the Appeal Process, the Seller/Servicer must initiate the Impasse Process through a written request to Freddie Mac requesting such escalation within 15 days of the date of Freddie Mac’s denial of the first or second appeal, as applicable. The requirements for the Impasse Process are as follows: 1. The request for such escalation must be sent in writing to the Freddie Mac office that denied the prior appeal. If any new information is available, the request must include the items described in Section 3602.4(b)(i)(2) above. 2. Within 30 days (or such longer period of time to which both parties agree) from the date the Impasse Process is initiated (the “impasse period”), a representative from each of the Seller/Servicer and Freddie Mac will attempt to resolve the dispute 3. The Seller/Servicer may provide a Correction of an alleged Significant Defect at any time during the impasse period 4. All information, facts and documents that the Seller/Servicer or Freddie Mac wishes to be considered during the Impasse Process must be submitted no later than the end of the impasse period, or such information will not be considered in the Management Escalation Process, any subsequent IDR Process or any other attempts to resolve the dispute 5. If the parties agree during the impasse period that no breach occurred, Freddie Mac will withdraw the Repurchase Demand. If the parties agree during the impasse period that a breach did occur, the Seller/Servicer will implement the remedy specified in the Repurchase Demand (or such other remedy as agreed to by the parties). 6. If, after the impasse period, Freddie Mac reaffirms its Repurchase Demand, the Seller/Servicer may continue to dispute the Repurchase Demand by initiating the Management Escalation Process within 15 days of receiving Freddie Mac’s reaffirmation of its decision 7. If the Management Escalation Process is not initiated within this 15-day period, the Seller/Servicer will: ■ Have no further right to challenge the Repurchase Demand, ■ Not be able to avail itself of the Management Escalation Process or the IDR Process, and ■ Be obligated to comply with the terms of the Repurchase Demand within 15 days from the end of the impasse period
Freddie Mac Guide 3602.4
602-17 8. The Impasse Process is available only for Repurchase Demands concerning Mortgages with Settlement Dates on and after January 1, 2016 (iv) Management Escalation Process If the dispute is not resolved by the Appeal Process or the Impasse Process, the Seller/Servicer may initiate the Management Escalation Process by submitting a written request to Freddie Mac no later than 15 days from the end of the impasse period. The requirements for the Management Escalation Process are as follows: 1. The Seller/Servicer’s request shall identify its officer contact for the Management Escalation Process 2. No new information, facts or documents or Corrections may be submitted by the Seller/Servicer, and no new information, facts or documents may be submitted by Freddie Mac as part of the Management Escalation Process 3. Within 30 days (or such longer time period to which both parties may agree) after the Seller/Servicer initiates the Management Escalation Process (the “management escalation period”), an officer outside of Freddie Mac’s Quality Control group and an officer of the Seller/Servicer will attempt to resolve the dispute. If Freddie Mac and the Seller/Servicer reach agreement regarding the Repurchase Demand in question during the management escalation period, Freddie Mac will withdraw the Repurchase Demand, or the Seller/Servicer will implement the remedy specified in the Repurchase Demand (or such other remedy as agreed to by Freddie Mac and the Seller/Servicer) no later than 30 days after an agreement is reached. 4. If the dispute is not resolved by the end of the management escalation period, the Seller/Servicer must initiate the IDR Process within 15 days of the expiration of the management escalation period to continue to attempt to resolve the dispute. If the Seller/Servicer does not initiate the IDR Process within this 15-day period, the Seller/Servicer will: ■ Have no further right to challenge the Repurchase Demand, ■ Not be able to avail itself of the IDR Process in connection with the Mortgage in question, and ■ Be obligated to comply with the terms of the Repurchase Demand within 30 days from the end of the management escalation period 5. The Management Escalation Process is available only for Repurchase Demands concerning Mortgages with Settlement Dates on and after January 1, 2016
Freddie Mac Guide 3602.4
602-18 (v) IDR Process The IDR Process is available to resolve factual disputes regarding Repurchase Demands that involve an alleged breach of a selling and/or origination representation and warranty. The requirements for the IDR Process are as follows: 1. If the dispute is not resolved by the Management Escalation Process, an IDR Eligible Seller/Servicer may initiate the IDR Process by following the steps set forth in Section 3.2 of the IDR Document 2. As a prerequisite to using the IDR Process, the Seller/Servicer must have timely challenged the Repurchase Demand through the Appeal Process, the Impasse Process and the Management Escalation Process 3. If the Seller/Servicer has not initiated the IDR Process within 15 days of the expiration of the management escalation period, Freddie Mac may initiate the IDR Process within six months of the expiration of the management escalation period by following the steps set forth in Section 3.2 of the IDR Document 4. If the IDR Process is selected by the Seller/Servicer or Freddie Mac, the Seller/Servicer and Freddie Mac must both execute the tolling agreement tolling any applicable statute of limitations and statute of repose. The tolling agreement shall be executed by the Seller/Servicer and Freddie Mac within seven days of initiation of the IDR Process. 5. Once either party initiates the IDR Process, both the Seller/Servicer and Freddie Mac shall follow the process set forth in the IDR Document 6. No new information, facts or documents or Corrections may be submitted by the Seller/Servicer, and no new information, facts or documents may be submitted by Freddie Mac as part of the IDR Process (c) Appealing a Repurchase Demand or repurchase alternative issued due to Servicing violations Upon receipt of a Repurchase Demand or a Servicing Repurchase Alternative demand letter for any Servicing Violation or other violation described in Section 3602.2(b), the Servicer may initiate the processes set forth herein if the Servicer has additional supporting information and/or documentation that may affect: ■ Freddie Mac’s decision to exercise a Servicing Remedy ■ Freddie Mac’s determination that a Servicing Defect is uncorrectable or is a Servicing Repurchase Defect pursuant to Section 3602.2(b)
Freddie Mac Guide 3602.4
602-19 The processes to resolve a dispute include the following: ■ The Appeal Process ■ The Impasse Process and Management Escalation Process (the “escalation processes”) ■ The IDR Process If the processes set forth herein to resolve a dispute are not initiated timely, the procedures in this section will be unavailable to the Servicer, and the Servicer will be obliged to remit payment for the repurchase or Servicing Repurchase Alternative. Additionally, Freddie Mac’s decision in the processes above will be conclusive unless the IDR Process (described in Section 3602.4(c)(iii) below) is initiated, in which case the decision of the Neutral (as such term is defined in the IDR Document) shall be binding. (i) The Appeal Process Within 60 days from the date of Freddie Mac’s letter requiring repurchase or providing a Servicing Repurchase Alternative, or within such other time frame as may be specified by Freddie Mac, the Servicer may submit the first appeal. If no written appeal is received within the 60-day period or within such other time frame as may be specified by Freddie Mac, the Servicer will have no further right to challenge such repurchase or Servicing Repurchase Alternative and will not be able to avail itself of the Impasse Process, the Management Escalation Process or the IDR Process. The Appeal Process is as follows: 1. The first appeal must be sent in writing to the Freddie Mac office referenced in the Servicing Remedy letter 2. The appeal package must contain: ■ A statement of all relevant facts concerning the Servicing of the Mortgage ■ A statement of why Freddie Mac’s decision should be reversed, in whole or in part ■ All available documentation supporting the basis for the appeal 3. If the Servicer submits a timely appeal, Freddie Mac will review the first appeal and advise the Servicer in writing of the appeal decision 4. If the first appeal is denied, then:
Freddie Mac Guide 3602.4
602-20 ■ The Servicer must remit payment for the repurchase or Servicing Repurchase Alternative within 15 days from the date of Freddie Mac’s denial letter or within such other time frame as may be specified by Freddie Mac, or ■ If new material information that was not available at the time of the first appeal, and was therefore not submitted to Freddie Mac for consideration, becomes available after submission of the first appeal, the Servicer may submit an additional appeal (“second appeal”) of the request within 15 days from the date of Freddie Mac’s denial letter. The second appeal must be sent in writing to the Freddie Mac office that denied the prior appeal and must contain the items described in Section 3602.4(c)(i)(2) above. ■ If new material information is not available, the Servicer may initiate the Impasse Process (described in Section 3602.4(c)(ii) below) within 15 days from the date of Freddie Mac’s denial letter of the first appeal 5. At any time during the Appeal Process, the Servicer has the right to provide a Servicing Correction pursuant to Section 3602.2(b) 6. In order for Freddie Mac to have the right to seek a Servicing Remedy based on the breach(es) alleged in the Repurchase Demand or Servicing Repurchase Alternative demand letter, Freddie Mac must respond to the Servicer’s first written appeal (and second written appeal, as applicable) within 60 days of receipt of the Servicer’s written appeal 7. If there is a second appeal and the second appeal is denied, then: ■ The Servicer must remit payment for the repurchase or Servicing Repurchase Alternative within 15 days from the date of Freddie Mac’s denial letter or within such other time frame as may be specified by Freddie Mac, or ■ The Servicer may initiate the Impasse Process within 15 days from the date of Freddie Mac’s denial letter of the second appeal 8. If the Impasse Process is not initiated timely following denial of the first or second appeal, the Servicer will: ■ Have no further right to challenge the Repurchase Demand or Servicing Repurchase Alternative demand letter, ■ Not be able to avail itself of the Impasse Process, the Management Escalation Process or the IDR Process in connection with the Mortgage in question, and ■ Be obligated to timely comply with the terms of the Servicing Remedy letter
Freddie Mac Guide 3602.4
602-21 9. In the event the first or second appeal results in the determination that a Servicing Defect can be corrected, or the Servicer provided a Servicing Correction during the Appeal Process, the Servicing Remedy letter will be considered withdrawn, and, if applicable, Freddie Mac will issue a notice of Servicing Defect as described in Section 3602.2(b) 10. If the first or second appeal and denial of such appeal was in response to Freddie Mac’s notification to the Servicer regarding a Servicing Repurchase Alternative, Freddie Mac will not consider any further appeal if Freddie Mac subsequently requests repurchase and the Repurchase Demand is due to the same violation identified in the Servicing Repurchase Alternative demand letter (ii) The escalation processes (A) The Impasse Process If the Servicer wishes to challenge the Servicing Remedy letter after conclusion of the Appeal Process, the Servicer must initiate the Impasse Process though a written request to Freddie Mac requesting such escalation within 15 days from the date of Freddie Mac’s denial letter for the first or second appeal, as applicable. The Impasse Process is as follows: 1. The request for such escalation must be sent in writing to the Freddie Mac office that denied the prior appeal. If any new information is available, the request must include the items described in Section 3602.4(c)(i)(2) above. 2. Within 30 days (or such longer period of time to which both parties agree) from the date the Impasse Process is initiated (the “impasse period”), a representative from the Servicer and a representative from Freddie Mac will attempt to resolve the dispute 3. The Servicer may provide a Servicing Correction pursuant to Section 3602.2(b) at any time during the impasse period 4. All information, facts and documents that the Servicer or Freddie Mac wishes to be considered during the Impasse Process must be submitted no later than the end of the impasse period, or such information will not be considered in the Management Escalation Process, any subsequent IDR Process or any other attempts to resolve the dispute 5. If the parties agree during the impasse period that no Servicing Violation occurred or that no Servicing Defect exists, the Servicing Remedy letter will be considered withdrawn. If the parties agree that a Servicing Defect can be corrected or that the Servicer provided a Servicing Correction during the impasse period, the Servicing Remedy letter will be considered withdrawn, and, if applicable, Freddie Mac will issue a notice of Servicing Defect described in Section 3602.2(b). If the parties
Freddie Mac Guide 3602.4
602-22 agree during the impasse period that a Servicing Violation occurred or that a Servicing Defect exists, the Servicer will implement the remedy specified in the Repurchase Demand or Servicing Repurchase Alternative demand letter. 6. If, after the impasse period, Freddie Mac reaffirms its Servicing Remedy letter, the Servicer may continue to dispute the Servicing Remedy letter by initiating the Management Escalation Process within 15 days of receiving Freddie Mac’s reaffirmation of its decision 7. If the Management Escalation Process is not initiated within this 15-day period, the Servicer will: ■ Have no further right to challenge the Repurchase Demand or Servicing Repurchase Alternative demand letter ■ Not be able to avail itself of the Management Escalation Process or the IDR Process in connection with the Mortgage in question, and ■ Be obligated to timely comply with the terms of the Servicing Remedy letter (B) The Management Escalation Process If the dispute is not resolved by the Appeal Process or the Impasse Process, the Servicer may initiate the Management Escalation Process by submitting a written request to Freddie Mac no later than 15 days of receiving Freddie Mac’s reaffirmation of its decision. The Management Escalation Process is as follows: 1. The request for such escalation must be sent in writing to the Freddie Mac office referenced in the letter reaffirming the Servicing Remedy, and the Servicer must identify its officer contact for the Management Escalation Process. 2. No new information, facts or documents, or Servicing Corrections pursuant to Section 3602.2(b), may be submitted by the Servicer, and no new information, facts or documents may be submitted by Freddie Mac as part of the Management Escalation Process 3. Within 30 days (or such longer period of time to which both parties may agree) after the Servicer initiates the Management Escalation Process (“management escalation period”), an officer from the Servicer and Freddie Mac will attempt to resolve the dispute 4. If the parties agree during the management escalation period that no Servicing Violation occurred or that no Servicing Defect exists, the Servicing Remedy letter will be considered withdrawn. If the parties agree during the management escalation period that a Servicing Violation occurred or that a Servicing Defect