Freddie Mac Single-Family Seller/Servicer Guide 8801.2 — Transfers of Servicing, financial obligations and insurance considerations

Freddie Mac Single-Family Seller/Servicer Guide 8801.2 — Transfers of Servicing, financial obligations and insurance considerations

Effective 2026-04-08 · Freddie Mac's stamp for this section

This section contains requirements related to: ■ Transfers of Servicing with respect to Cooperative Share Loans ■ Reduction or cancelation in insurance coverage maintained by the Cooperative Corporation ■ Cooperative Share Loan expenses that may become First Liens on the property ■ Reimbursement of Cooperative Share Loan expenses (a) Transfers of Servicing with respect to Cooperative Share Loans A Transferee Servicer, whether in a Concurrent or Subsequent Transfer of Servicing involving Cooperative Share Loans, does not need to be a Seller/Servicer approved to sell Cooperative Share Loans to Freddie Mac in accordance with Chapter 5705 in order to service Cooperative Share Loans for Freddie Mac when engaging in the Transfer of Servicing with a Transferor Servicer. In addition to the requirements governing Concurrent Transfers of Servicing and Subsequent Transfers of Servicing set forth elsewhere in the Guide, for each Cooperative Share Loan being serviced for Freddie Mac: ■ The Transferor Servicer must verify that the UCC-1 Financing Statements are current and valid to perfect Freddie Mac’s security interest on the Effective Date of Transfer; and ■ Consistent with the requirements in Section 7101.7(b), the Transferee Servicer must provide notice to all appropriate parties (including, but not limited to, the Cooperative Corporation and insurers, as applicable), as necessary, to avoid disruption in the Transferee Servicer’s timely receipt of any notifications from the Cooperative Corporation and insurers. Note: Refer to Section 8801.1(g) regarding notifications from the Cooperative Corporation and insurers. (b) Reduction or cancelation in insurance coverage maintained by the Cooperative Corporation For insurance being maintained by the Cooperative Corporation under Chapter 8202, when the Servicer learns that any of the required insurance coverage(s) will be reduced or no longer in force, the Servicer must contact the Cooperative Corporation to: ■ Determine the reasons for the reduction or cancelation in insurance coverage and whether and when such insurance coverage will be reinstated; and ■ Advise the Cooperative Corporation that the lack of adequate insurance coverage will make future Cooperative Share Loans in the Cooperative Project ineligible for sale to Freddie Mac If the insurance coverage is not reinstated within 60 days after the reduction or cancelation, then the Servicer must: ■ Advise its loan origination staff, if any, that future Cooperative Share Loans in the Cooperative Project are not eligible for sale to Freddie Mac; and ■ Immediately notify Freddie Mac (Distressed_Property@FreddieMac.com) of the reduction or cancelation in insurance coverage and include the Servicer’s recommendation on how to proceed (c) Cooperative Share Loan expenses that may become First Liens on the property In consideration of the requirements in Section 9301.6(e), if a delinquent expense (as listed below) is or may become a First Lien on the property or that if not paid would result in the subordination of Freddie Mac’s interests, then 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) before advancing and paying any such expense, when and to the extent necessary, to protect Freddie Mac’s interests. These expenses include: ■ Cooperative Corporation assessments that represent the Pro Rata Share; and ■ For a Cooperative Unit located in the State of New York, Cooperative Unit Maintenance Fees (and any associated collection expenses) Note: See also Section 8801.2(d) regarding reimbursement of expenses incurred on a Cooperative Share Loan. (d) Reimbursement of Cooperative Share Loan expenses The Servicer must obtain written pre-approval from Freddie Mac by an RPA) via the RPA functionality in PAID to be reimbursed for the following expenses incurred on a Cooperative Share Loan: ■ Flip tax pursuant to Section 8801.1(h); and ■ Cooperative Share Loan expenses that may become First Liens on the property pursuant to Section 8801.2(c) Note: See also Exhibit 74, Expense and Income Codes for Expense Reimbursement Claims, regarding expense codes 014005 (Foreclosure on a Cooperative Share), 080008 (Cooperative Share Loan – Flip Tax), 080009 (Cooperative Share Loan – Pro Rata Share Assessments) and 080010 (Cooperative Share Loan – Maintenance Fees). Additionally, consistent with the requirements in Section 9701.5(a), standard supporting documentation (e.g., proof of disbursements) for reimbursement of expenses incurred on a Cooperative Share Loan include, but are not limited to, a copy of the Cooperative Project Documents, Recognition Agreement or other legal documents highlighting, if applicable, that: ■ The Cooperative Corporation assessments that represent the Pro Rata Share and/or Cooperative Unit Maintenance Fees (and any associated collection expenses) may become First Liens on the property ■ The Cooperative Share Loan is subject to the payment of a flip tax and the imposition of the flip tax is permitted

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