Freddie Mac Single-Family Seller/Servicer Guide 8304.2 — Maintaining Custodial Accounts

Freddie Mac Single-Family Seller/Servicer Guide 8304.2 — Maintaining Custodial Accounts

Effective 2025-09-10 · Freddie Mac's stamp for this section

This section contains requirements related to: ■ Investing custodial account funds ■ Maintaining the Principal and Interest Custodial Account balance ■ Maintaining the Escrow Custodial Account balance ■ Maintaining the Buydown Custodial Account ■ Monitoring depository eligibility (a) Investing custodial account funds The Servicer may not invest funds deposited into any Freddie Mac Custodial Account. (b) Maintaining the Principal and Interest Custodial Account balance The Servicer must: ■ Maintain Freddie Mac funds separately from the Servicer’s general ledger account; a general ledger account is not a substitute for a Demand Deposit account ■ Deposit all Freddie Mac funds into a Demand or Interest-Bearing Deposit Account in accordance with Section 8302.1(b) ■ Ensure that funds are available for Freddie Mac to draft principal and interest or payoff amounts. If the funds available in a Principal and Interest Custodial Account are less than the amount due to Freddie Mac on the applicable draft date, the Servicer must advance its funds so that the amount due to Freddie Mac is available before the applicable draft date. ■ Maintain a positive daily balance in the Principal and Interest Custodial Account(s) at all times ■ Perform a consolidated reconciliation if the Servicer has more than one Principal and Interest Custodial Account under a specific Seller/Servicer number The Servicer may recover any funds it advanced for the payment of delinquent net yield interest from subsequent collections of Principal and Interest Payments. (c) Maintaining the Escrow Custodial Account balance The Servicer must: 1. Establish and maintain at least one Escrow Custodial Account for each Seller/Servicer number, even if the Servicer does not collect Escrow Funds for Mortgages serviced under that number 2. Maintain the Escrow Funds separately from the Servicer’s general ledger account; a general ledger account is not a substitute for a Demand Deposit Account 3. Deposit all Freddie Mac funds into a Demand or Interest-Bearing Deposit Account in accordance with Section 8302.1(b) 4. Ensure that each Borrower’s vested interest is ascertainable at all times 5. Ensure that funds are available for remittances before disbursing funds to third parties 6. Maintain a positive daily balance in the Escrow Custodial Account(s) at all times 7. Perform a consolidated reconciliation if the Servicer has more than one Escrow Custodial Account under a specific Seller/Servicer number 8. Deposit an advance from the Servicer’s funds to the Escrow Custodial Account for any shortages on the same day the shortage occurs and before making any disbursements. The Servicer must not use the overages of one Borrower account to fund the negative Escrow or shortage of other Borrower accounts. The Servicer may recover any Escrow advance from subsequent payments to the Escrow Custodial Account of the specific Mortgage for which the Servicer made the advance. (d) Maintaining the Buydown Custodial Account Servicers may deposit buydown funds into the Escrow Custodial Account, or the Servicer may, at its option, open a separate Custodial Account for buydown funds. If the Servicer establishes a separate Buydown Custodial Account, the Servicer must comply with the requirements regarding Custodial Accounts generally, and the maintenance and reconciliation of Escrow Custodial Accounts set forth in the Guide for such Buydown Custodial Accounts. (e) Monitoring depository eligibility The Servicer must maintain all Custodial Accounts in an Eligible Depository at all times. The Servicer must have its own oversight process to continually monitor its depository to ensure it is viable and in good standing and meets the requirements of Section 8302.2(b). The Servicer’s obligation to transfer funds to an Eligible Depository is not dependent upon notification from Freddie Mac. The Servicer may determine a depository’s eligibility by subscribing to any of the rating services referenced in Section 8302.2(c) or by contacting Institutional_Eligibility@FreddieMac.com. In addition, the Servicer may determine a depository’s ineligibility based on actual knowledge. If the Servicer determines that a depository is no longer eligible, it must: 1. Open new Custodial Accounts within 30 days from the release date of the ratings that make the depository ineligible 2. Meet the requirements listed in Sections 8304.3(c) and 8304.3(d) for changing or transferring accounts

Source: Freddie Mac Single-Family Seller/Servicer Guide 8304.2 — Maintaining Custodial Accounts · source URL · snapshot 4c94f67729042dd6