Freddie Mac Single-Family Seller/Servicer Guide §9603.1 — General REO Servicing requirements (11/19/25)
Freddie Mac Guide §9603.1 (General REO Servicing requirements). Gap-fill (verbatim, ID-diff).
Verbatim regulatory text
Verbatim provisions from Freddie Mac Single-Family Seller/Servicer Guide §9603.1 — General REO Servicing requirements (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 9603.1
(11/19/25) This section contains information related to: ■ General Servicer requirements for REO properties ■ Required REO documentation and reporting ■ Notifying the taxing authority/HOA of REO ■ Property insurance for REO ■ Canceling utilities for REO (a) General Servicer requirements for REO properties Once Freddie Mac has acquired a property in REO and the Servicer has successfully reported the foreclosure sale or deed-in-lieu of foreclosure via Resolve® and the Loan Level Reporting tool (see Exhibit 88, Servicing Tools) pursuant to Section 9603.1(b), the Servicer will no longer have the responsibility for the following REO activities, including for properties located in States that have a redemption, confirmation process or ratification of sale: ■ Securing, maintaining, inspecting, protecting and preserving the property ■ Making advances to superior lienholders, including condominium/homeowners association (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 ■ Evicting the occupants in the property ■ Marketing and rehabilitating the REO Servicers are responsible for the following activities until the sale of the REO by Freddie Mac or the MI, FHA, RHS or VA: ■ Filing and concluding FHA, RHS and VA claims, if applicable. (Freddie Mac will file MI claims.) ■ Filing and concluding property insurance claims, if applicable, and applying for premium refunds, in accordance with Section 9603.1(d). The Servicer is required to cancel any
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603-2 existing property insurance policies no later than 14 days after the foreclosure sale or deed-in-lieu of foreclosure has been successfully reported to Freddie Mac. Freddie Mac may instruct the Servicer to maintain property insurance (even if the property is vacant and has no claimable damage). If Freddie Mac makes this request, the Servicer must continue the insurance coverage until Freddie Mac notifies the Servicer that Freddie Mac has sold the REO. ■ Referring all inquiries and offers regarding purchase of the REO to Freddie Mac (see Directory 6) within one Business Day of the inquiry or offer ■ Fulfilling all requests made by Freddie Mac, including attorney selection. If the Servicer requires the assistance of an attorney in fulfilling any of the obligations set forth in this chapter, the Servicer must use an attorney who meets the criteria in Section 9501.2. ■ Taking such action that Freddie Mac may request regarding a property Servicers may review the REO Overview report, accessible via the “REO” tile of the Servicer’s Servicer Performance Profile (see Exhibit 88), for the property status. The Servicer may also call Customer Service at 800-FREDDIE to obtain this information. Freddie Mac will not send the Servicer a written notice of the sale of the REO. (b) Required REO documentation and reporting When reporting an REO, the Servicer must report the foreclosure sale result “REO” in Resolve no later than one Business Day immediately following the date of the foreclosure sale. Refer to Section 9301.9(a). The Servicer must submit to Freddie Mac (see Directory 6) any information Freddie Mac requests from the Mortgage file within 15 Business Days of the date of its request. (Refer to Section 3302.1(c) for Freddie Mac’s record retention requirements for Mortgage files on foreclosed Mortgages.) Additionally, for a Cooperative Unit in REO, the Servicer must submit the information listed in Section 8801.4(d) if requested by Freddie Mac. (c) Notifying the taxing authority/HOA of REO Within five days of successfully reporting the foreclosure sale or deed-in-lieu of foreclosure via Resolve, the Servicer must notify all organizations that require notice of Freddie Mac’s ownership of the property to ensure that statements are sent to the appropriate location. This includes, but is not limited to, the taxing authority, condominium association, municipality, HOA or Cooperative Corporation (see Chapter 8801 for special Servicing requirements for Cooperative Share Loans), and any organization as required by law. When the Servicer contacts these organizations, the Servicer must update the remitter’s name as follows: Federal Home Loan Mortgage Corporation
Freddie Mac Guide 9603.1
603-3 c/o Radian Real Estate Management 7730 South Union Park Avenue, Suite 400 Midvale, UT 84047 Important: Freddie Mac will pay the property taxes, 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 successfully reports the foreclosure sale or the deed-in-lieu of foreclosure. Freddie Mac may retain a vendor to conduct such activities. There are special requirements for REO located in California. California taxing authorities reassess properties for supplemental taxes from the foreclosure sale date to the sale date of the REO. Also, taxing authorities often generate a supplemental tax statement long after the REO sale date. Therefore, the Servicer must notify the taxing authority in writing to send any supplemental tax bills to Freddie Mac at the address above within five days following the foreclosure sale or the deed-in-lieu of foreclosure date. (d) Property insurance for REO The Servicer must maintain or cancel the existing property insurance policy according to the requirements in this section and Section 8202.6. Additionally, the Servicer must assist in the filing of a property insurance claim, when applicable, according to requirements in Section 9603.1(d)(ii) below. (i) Maintaining or canceling property insurance The Servicer must take all actions required in the mortgage clause of all applicable property insurance policies, including, but not limited to, providing all notices to the insurer required under such clause in order to preserve the coverage and its maximum benefits for the Servicer and/or Freddie Mac as mortgagee. The Servicer must cancel such policies within 14 days after the foreclosure sale or deed-in-lieu of foreclosure has been reported to Freddie Mac, even if there is claimable damage to the property or if the property has sold. (ii) Filing claims A property recovery firm will handle the insurance claim filing process on Freddie Mac’s behalf. The Servicer must provide that firm with the necessary information to file and process the claim within three Business Days of their request for such information. (iii) Obtaining a refund for the unearned insurance premiums After canceling the policy, the Servicer must submit a request for the unearned portion of the insurance premium to the insurance company for any premium that the Servicer paid on behalf of the Borrower, if applicable. The Servicer must offset any refund it receives
Freddie Mac Guide 9603.1
603-4 from the insurance company against expenses the Servicer requests via PAID (Payments Automated Intelligent and Dynamic) (see Exhibit 88). (e) Canceling utilities for REO Once the Servicer has successfully reported the foreclosure sale or deed-in-lieu of foreclosure to Freddie Mac, Freddie Mac or its agent/vendor will transfer the utilities to Freddie Mac. The Servicer can obtain reimbursement for any utility bills it paid that Freddie Mac approved in advance or the Servicer incurred up to the foreclosure sale or deed-in-lieu of foreclosure pursuant to the process for reimbursement of expenses in Section 9603.3(d).
Freddie Mac Guide 9603.1
Filing FHA/VA/RHS and primary mortgage insurance claims (09/10/25) This section contains requirements related to: ■ FHA/VA/RHS claim filing ■ Primary mortgage insurance claim filing ■ Offers to purchase the property with a pending mortgage insurance claim ■ Receipt of claim payment ■ Reduced, suspended or denied claims ■ Remittance of primary mortgage insurance claim payments (a) FHA/VA/RHS claim filing On a Mortgage that is insured by the FHA or guaranteed by the VA or RHS, the Servicer must process the claim for FHA insurance or VA or RHS guaranty benefits within the agency’s established time frames and according to the agency’s requirements to ensure that the claim recipient receives the maximum claim payment amount. (i) FHA, VA or RHS claim filing for Mortgages subject to a recourse obligation, including indemnification The Servicer must file the claim to ensure that payment is made directly to the Servicer. Because the Servicer is the claim recipient, the Servicer should ensure that it receives the maximum claim payment amount to apply towards any expenses incurred, as Freddie Mac will not reimburse the Servicer for expenses incurred on Mortgages subject to a recourse obligation. (See Section 9701.1(d) on Freddie Mac’s rights.)
Freddie Mac Guide 9603.1
603-5 (ii) FHA, VA or RHS claim filing for Mortgages not subject to a recourse obligation or indemnification The Servicer must file the claim in Freddie Mac’s name to ensure that payment is made directly to Freddie Mac (see Directory 6). Because Freddie Mac is the claim recipient, the Servicer should ensure that Freddie Mac receives the claim payment, in the maximum claim payment amount, before seeking reimbursement for expenses incurred on the Mortgage. (b) Primary mortgage insurance claim filing Freddie Mac will file a claim for loss with the MI if the Mortgage is covered by primary mortgage insurance and will manage the claims payment process with the MI. The Servicer must provide all information and documentation pertaining to the claim to the MI no later than 60 days after the foreclosure sale, short sale or acceptance of a deed-in-lieu of foreclosure or within any shorter time frame as specified by the mortgage insurance master policy or by Freddie Mac. (c) Offers to purchase the property with a pending mortgage insurance claim A Servicer that receives an inquiry or an offer regarding purchase of an REO property must contact its Freddie Mac REO claim specialist (see Directory 6) within one Business Day of receiving the inquiry or offer. (d) Receipt of claim payment If the Servicer receives a claim payment intended for Freddie Mac, whether from the MI or applicable entity (see Section 9603.2(a) on FHA/VA/RHS claim filing and Section 9603.2(b) on primary mortgage insurance claim filing), the Servicer must send the funds to Freddie Mac (see Directory 6) within 10 Business Days after the Servicer receives them. The Servicer must also include all supporting documentation relating to the claim payment received from the MI or applicable entity, including a copy of the claim payment check. However, if the Mortgage insured by the FHA or guaranteed by the VA or RHS is subject to a recourse obligation, including indemnification, the Servicer does not need to send the funds to Freddie Mac. (e) Reduced, suspended or denied claims If the claim payment amount is reduced, suspended or denied by the MI due to the Servicer’s actions or inactions including, but not limited to, failure to comply with the Guide or applicable mortgage insurance requirements, then Freddie Mac may exercise its remedies provided by the Guide and the other Purchase Documents for the amount that is reduced, suspended or denied. Refer to Chapter 3602 regarding repurchases, repurchase alternatives and other remedies. (f) Remittance of primary mortgage insurance claim payments
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603-6 When Freddie Mac receives the claim payment from the MI, Freddie Mac will remit any portion of the proceeds due to the Servicer, less any outstanding amounts due to Freddie Mac from the Servicer.