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

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

9701.2: Property-related reimbursements (09/10/25) 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-in- lieu 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: Freddie Mac Single-Family Seller/Servicer Guide Chapter 9701 As of 04/08/26 Page 9701-6 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 non- escrowed 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 deed- in-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® Freddie Mac Single-Family Seller/Servicer Guide Chapter 9701 As of 04/08/26 Page 9701-7 ❑ 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 Freddie Mac Single-Family Seller/Servicer Guide Chapter 9701 As of 04/08/26 Page 9701-8 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 Freddie Mac Single-Family Seller/Servicer Guide Chapter 9701 As of 04/08/26 Page 9701-9 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. Freddie Mac Single-Family Seller/Servicer Guide Chapter 9701 As of 04/08/26 Page 9701-10 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. 9701.3: Legal and foreclosure-related reimbursements (04/08/26) This section contains information related to: ■ Reimbursement of fees and costs incurred during legal proceedings ■ Reimbursement requirements when foreclosure must be restarted ■ Reimbursement of BPO/appraisal reports ■ REO related costs and expenses (a) Reimbursement of fees and costs incurred during legal proceedings Certain legal fees and costs are reimbursable when the Servicer forecloses on a property or takes other routine or non-routine legal action. All foreclosure and related legal fees and costs must be reasonable and comparable to those customarily charged in the area where the Freddie Mac Single-Family Seller/Servicer Guide Chapter 9701 As of 04/08/26 Page 9701-11 property is located (see Section 9301.3(e) regarding foreclosure counsel fees). Those fees and costs include such items as: 1. Foreclosure attorney fees as set forth in Exhibit 57A, Approved Attorney, Foreclosure, Mediation, Postponement Fees and Title Expenses, and foreclosure attorney fees incurred that exceed the expense limits in Exhibit 57A, if the Servicer has submitted and Freddie Mac has granted written pre-approval of the Servicer’s request via PAID (Payments Automated Intelligent and Dynamic) (see Exhibit 88, Servicing Tools). Foreclosure attorney fees listed in Exhibit 57A are the approved attorney fees for an uncontested foreclosure. This generally includes but is not limited to: ■ All activities necessary to complete the first legal action ■ Review of supporting documentation and loan status ■ Verification that the Borrower is not a Servicemember currently serving a Period of Military Service (as those terms are referenced in Section 8503.1(a)), or if the Borrower was a Servicemember, that more than one year has elapsed since his or her Period of Military Service ended. (See Section 8503.1(b) regarding foreclosure relief options exclusive to Servicemembers and their Dependents.) Verification must be completed following the referral of a Mortgage to foreclosure but prior to the first legal action and again prior to foreclosure sale. ■ Review of title examination ■ Preparation and filing of all necessary papers and notices, including the publication and posting of notices of foreclosure or other legal proceedings as required by State or local law, as well as obtaining service of process on all defendants or parties entitled to notice ■ Obtain orders for alternate or special service if doing so will expedite service of process at little or no additional cost ■ All necessary court appearances required in an uncontested foreclosure ■ Preparing documentation for and obtaining entry of judgment in a judicial foreclosure action or preparing all documentation necessary to conduct the foreclosure sale in a non-judicial foreclosure action ■ Handling the foreclosure sale, including any actions required to postpone (see Section 9301.7(a) regarding foreclosure sale postponements), cancel, reset and set aside the sale ■ Preparation and recording of conveyance deeds Freddie Mac Single-Family Seller/Servicer Guide Chapter 9701 As of 04/08/26 Page 9701-12 ■ For Cooperative Share Loans, any transfer of the Cooperative Shares and Proprietary Lease (see Section 8801.4 regarding delinquency management for Cooperative Share Loans) If a Servicer relies on its foreclosure counsel, as a vendor, to perform or handle services normally performed by a Servicer, including Delinquency management requirements (and the Servicer has not submitted a request for pre-approval (RPA) and received Freddie Mac approval), then any additional fee or service charges billed by the law firm should be paid by the Servicer at its own expense. See the table below for details related to Delinquency management requirements. Note: Servicers should refer to Section 9701.4(a) for details regarding non-reimbursable expenses. Additional guidance related to Delinquency management requirements Topic Guide location Property seizure Chapter 8402 Abandoned Properties, distressed properties and properties that pose a Risk of Property Ownership Chapter 8403 Servicing Mortgages impacted by a Disaster Chapter 8404 Freddie Mac loss mitigation evaluation hierarchy and performance standards Chapter 9201 Evaluating the Borrower Chapter 9202 Reinstatements and relief options Chapter 9203 Freddie Mac workout options Chapter 9204 Home Affordable Modification ProgramSM Chapter 9205 Modifications Chapter 9206 Workout Mortgage assumption Chapter 9207 Freddie Mac Standard Short Sale Chapter 9208 Freddie Mac Standard Deed-in-Lieu of Foreclosure Chapter 9209 Charge-off Chapter 9210 Hardest Hit Fund Chapter 9211 Freddie Mac Single-Family Seller/Servicer Guide Chapter 9701 As of 04/08/26 Page 9701-13 Foreclosure Chapter 9301 Bankruptcy Chapter 9401 Other litigation involving Freddie Mac-owned or guaranteed Mortgages Chapter 9402 Selection, retention and management of law firms for Freddie Mac Default Legal Matters Chapter 9501 Deficiency recovery Chapter 9601 Post-sale reporting to other entities Chapter 9602 Non-reimbursable expenses Section 9701.4(a) 2. Filing costs are reimbursable for required paper and e-filing, including costs associated with third-party vendors, unless the option to file electronically can be done without vendor-related costs 3. The cost of obtaining a copy of a death certificate if needed to facilitate prompt and efficient completion of the legal proceeding 4. Costs as set forth in Exhibit 57A for title work required for foreclosures, which include the cost of an update to the title if required by the State or to ensure clear and marketable title to the Mortgaged Premises after the foreclosure sale. Freddie Mac will not reimburse for any additional title abstract, commitment or policy. If the Servicer must obtain an additional update to the title because the original is stale due to bankruptcy delay, Freddie Mac will reimburse the Servicer up to $125 for the update in Maryland, Ohio and Virginia and $75 for all other States. Servicers must contact Freddie Mac for written pre- approval for an additional update if the title becomes stale for any other reason. 5. Costs of serving legal notices, when required by applicable law 6. Cost of publication of notices of foreclosure or other legal proceedings as required by State or local law. Reimbursable costs incurred for the publication of such legal notices include actual charges imposed by the newspaper or publication. The foreclosure attorney fees in Exhibit 57A cover fees for acquiring the publication, including the cost of preparing, submitting and verifying the legal notices. 7. Cost of posting of notices of foreclosure or other legal proceedings, as required by State or local law. Reimbursable costs incurred for the posting of such legal notices are for actual charges imposed for the physical posting of notices on the property. 8. Postage for certified or registered mail that is required for legal notices as required by applicable law Freddie Mac Single-Family Seller/Servicer Guide Chapter 9701 As of 04/08/26 Page 9701-14 9. Bankruptcy costs and fees as set forth in Exhibit 57B, Approved Bankruptcy Attorney Fees, and bankruptcy expenses incurred that exceed the expense limits in Exhibit 57B if the Servicer has submitted and Freddie Mac has granted written pre-approval of the Servicer’s request via PAID. However, if the Borrower is delinquent and files for bankruptcy protection and a reorganization plan is approved, the Servicer must seek reimbursement for its allowable expenses through the Borrower’s bankruptcy plan. If the Borrower breaches the bankruptcy plan, the Servicer must not submit a claim for expense reimbursement until after the applicable event or activity described in Section 9701.1(e). 10. Contested foreclosure fees and court costs required to continue with the foreclosure process, if the Servicer has submitted and Freddie Mac has granted written pre-approval of the Servicer’s request via PAID. For legal expenses that are related to a non-routine litigation matter and are considered reimbursable, Servicers must first contact Freddie Mac with details of the non-routine litigation matter according to the reporting requirements in Section 9402.2(a)(ii) and include an estimate of the attorney’s fees and litigation costs, as well as the attorney’s hourly rate, in the Servicer’s request for Freddie Mac’s pre-approval via PAID. Contested foreclosure fees and court costs are: Contested foreclosure fees and court costs Contested foreclosure Fees and court costs Contested foreclosure resolved by motion for summary judgment (judicial) Foreclosure attorney fee for a contested foreclosure in which a defendant files an answer requiring the filing of a summary judgment motion. This includes work leading up to the filing of the summary judgment motion, all court appearances and all written discovery. Responding to a motion to dismiss (judicial) Foreclosure attorney fee for responding to a motion to dismiss, including the preparation and filing of a response and attendance at all hearings. Contested foreclosure resolved by trial (judicial) Foreclosure attorney fee for trial, set by court upon its own motion, including, but not limited to, pre-trial preparation and correspondence, preparation and filing documents necessary for trial, witness preparation and all necessary court appearances. Freddie Mac Single-Family Seller/Servicer Guide Chapter 9701 As of 04/08/26 Page 9701-15 Contested foreclosure resolved by motion to dismiss (non-judicial) Foreclosure attorney fee for a contested foreclosure (i.e., Borrower’s filing of a lawsuit to challenge a non-judicial foreclosure) resolved by the filing of a motion to dismiss and subsequent entry of an order granting motion to dismiss. This includes all work leading up to the filing of the motion to dismiss and all necessary court appearances. Contested foreclosure resolved by summary judgment motion (non- judicial) Foreclosure attorney fee for a contested foreclosure (i.e., Borrower’s filing of a lawsuit to challenge a non-judicial foreclosure) resolved by the filing of a motion for summary judgment and subsequent entry of an order granting motion for summary judgment. This includes all work leading up to the filing of the summary judgment motion, all court appearances and all written discovery. Probate proceedings Foreclosure attorney fee for probate proceedings during a contested foreclosure. Motion for mediation in a contested foreclosure Foreclosure attorney fee for attendance and appearance at a mediation session for a contested foreclosure that is not part of a State or local law pre-foreclosure mediation program. Borrower initiated motions Foreclosure attorney fee for responding to a motion initiated by the Borrower or Borrower’s counsel, including the preparation and filing of a response and attendance at all hearings. Reply to affirmative defenses/motion to strike Foreclosure attorney fee for responding to a discovery request or propounding discovery in a contested foreclosure, including the preparation and filing of a response and attendance at all hearings. Discovery (request for production of documents, request for admissions, interrogatories) Foreclosure attorney fee for responding to a discovery request or propounding discovery in a contested foreclosure, including the preparation and filing of a response and attendance at all hearings. Contested foreclosure fee – other Foreclosure attorney fee for additional work needed to resolve a contested foreclosure that enters into litigation, whether routine or non-routine, in order to proceed with the foreclosure. Freddie Mac Single-Family Seller/Servicer Guide Chapter 9701 As of 04/08/26 Page 9701-16 11. For the life of the default, the actual cost of system connectivity fees, technology fees and invoice processing fees up to the following maximum expense limits: ■ Connectivity fees are reimbursable up to a maximum of $25 per referral, on or after April 1, 2011, for the life of the default ■ Technology fees are reimbursable up to a maximum of $5 per referral, before April 1, 2011, for the life of the default ■ Invoicing fees are reimbursable up to a maximum of $5 to process foreclosure invoices and an additional maximum of $5 to process bankruptcy invoices for the life of the default on referrals on or after April 1, 2011 For details on system connectivity and invoice processing, refer to Section 9501.5(a). 12. Attorney fees to shorten a redemption period, when allowed by applicable State law, if the Servicer has submitted and Freddie Mac has granted written pre-approval of the Servicer’s request via PAID 13. Reasonable attorney fees incurred in connection with the foreclosure of a Cooperative Share Loan. Servicers must claim reimbursement using expense code 014005 (Foreclosure on a Cooperative Share). Refer to Chapter 8801 for additional details on Servicing requirements related to Cooperative Share Loans. 14. Attorney fees for appearance and attendance at a status, conciliation or case management conference, when required by State or local law or set by the court, if the Servicer has submitted and Freddie Mac has granted written pre-approval of the Servicer’s request via PAID. This includes fees for appearance and attendance at pre-mediation hearings or conferences when required by State or local law or set by the court. 15. Certain expenses (e.g., legal fees and/or legal costs) considered unrecoverable from the Borrower under applicable federal, State or local law upon reinstatement or payoff of the Mortgage or upon completion of a mortgage modification. Note: Refer to Section 9701.1(e)(iv) regarding unrecoverable expenses. In the event of a foreclosure of the property or a bankruptcy of the Borrower, attorneys’ invoices paid by the Servicer pursuant to Section 8103.2(b) must match or exceed the claim for reimbursement in PAID. Servicers must pay attorneys’ invoices timely and should not be delaying the payment of attorneys’ invoices until after the expenses have been reimbursed by Freddie Mac. Freddie Mac will not reimburse the Servicer for attorney’s fees and litigation costs on Mortgages sold to Freddie Mac with full recourse or subject to indemnification. For Mortgages sold to Freddie Mac with recourse or subject to indemnification, the Servicer must Freddie Mac Single-Family Seller/Servicer Guide Chapter 9701 As of 04/08/26 Page 9701-17 inform counsel retained for foreclosure, eviction or bankruptcy that the Servicer is responsible for paying all associated fees and costs. (b) Reimbursement requirements when foreclosure must be restarted In certain States, if the Servicer must restart a foreclosure proceeding, in whole or in part, due to an allowable delay as defined in Section 9301.11(b), Freddie Mac will reimburse the Servicer as follows: 1. All of the reimbursable actual costs (per the requirements of the Guide) of each foreclosure attempt and the completed foreclosure 2. Up to 70% of the approved foreclosure attorney fees for the first foreclosure attempt 3. Up to 100% of the approved foreclosure attorney fees for the completed foreclosure Additionally, for any foreclosure attempt subsequent to the first foreclosure attempt, except for the completed foreclosure, the Servicer may be reimbursed up to 70% of the approved foreclosure attorney fees with prior written approval from Freddie Mac. To obtain written approval from Freddie Mac, the Servicer must submit an RPA via the RPA functionality in PAID. Freddie Mac will not reimburse the Servicer for any fees or costs associated with a restarted foreclosure if the Servicer has to restart a foreclosure proceeding due to a delay that is not considered an allowable delay as defined in Section 9301.11(b) or due to Servicer non- compliance with the Guide. The States affected by this requirement are identified in Exhibit 57A, Approved Attorney, Foreclosure, Mediation, Postponement Fees and Title Expenses. In all other States, Freddie Mac will reimburse the Servicer for only one occurrence of the foreclosure attorney fee and reimbursable actual costs (per the requirements of the Guide). (c) Reimbursement of BPO/appraisal reports Since the Servicer does not incur an expense when it orders a BPO or appraisal report from Freddie Mac via BPOdirect® in connection with a workout or a foreclosure, a BPO or appraisal report via BPOdirect is not an expense for which the Servicer may seek reimbursement. Freddie Mac will only reimburse the Servicer for an appraisal report ordered from an appraiser of its choice if the Servicer has complied with Section 9202.4(a). (d) REO related costs and expenses Freddie Mac will reimburse the Servicer for post-acquisition activities that a Servicer must perform for Freddie Mac, the MI, the FHA and/or the VA. (Refer to Chapter 9603 for information on these activities.) Freddie Mac Single-Family Seller/Servicer Guide Chapter 9701 As of 04/08/26 Page 9701-18 9701.4: Non-reimbursable expenses, adjustments and expense offsets (12/17/25) This section contains information related to: ■ Non-reimbursable expenses ■ Denials and adjustments of expense reimbursement requests ■ Default reporting requirements and reimbursement of claims ■ Expense offsets ■ Forwarding remittances to Freddie Mac (a) Non-reimbursable expenses Consistent with Section 8101.1(b), standard operating costs incurred by a Servicer or its Servicing Agent and/or Outsourced Vendor(s), as applicable, in connection with the Servicer’s obligations and duties owed to Freddie Mac are part of the Servicer’s cost of doing business and, therefore, are not reimbursable by Freddie Mac unless expressly provided for otherwise in the Servicing Contract. Standard operating costs and expenses that are non-reimbursable by Freddie Mac (together referred to as “non-reimbursable expenses”) include, but are not limited to: ■ Appraisal reports, except when approved by Freddie Mac in advance ■ Attorneys fees resulting from correction of matters that should have been resolved preforeclosure, including any costs to resolve real property title issues that are the result of the Seller’s or Servicer’s actions or inactions ■ Documentary stamp taxes/transfer taxes/excise taxes on real estate conveyance (Freddie Mac is exempt under Title 12 of the United States Code, Section 1452(e)), unless the Servicer received Freddie Mac’s prior written approval via PAID (Payments Automated Intelligent and Dynamic) (see Exhibit 88, Servicing Tools). (See Section 9301.10(c) for additional requirements for reimbursement of transfer taxes after a foreclosure sale or when closing a deed-in-lieu of foreclosure transaction.) ■ Sales tax ■ Facsimile transmission (fax) charges ■ Interest, penalties (except for the first tax penalty (and second tax penalty in California as provided in Section 9701.2(a) incurred as defined in Section 9701.2(a))), late charges, Freddie Mac Single-Family Seller/Servicer Guide Chapter 9701 As of 04/08/26 Page 9701-19 collection expenses or legal fees for late payment of property taxes or condominium/homeowners association or Cooperative Corporation assessments unless otherwise provided in the Guide. (See Chapter 8801 for special Servicing requirements for Cooperative Share Loans.) ■ Long-distance telephone calls ■ Mailgram charges ■ Mileage or travel costs ■ Mortgage credit life insurance premiums ■ Other costs of an attorney, such as time or fees for curing a Delinquency, document preparation, word processing or notary public services performed by an attorney; co- counsel fees; referral fees, packaging fees or other similar fees and new case start-up fees ■ Photocopy costs ■ Photographs ■ Regular postage ■ The actual or imputed value of in-house counsel time expended when the reimbursable matter is handled by in-house counsel ■ Additional fees for preparing a foreclosure deed because the cost of doing so is included in the attorney’s fees listed in Exhibit 57A, Approved Attorney, Foreclosure, Mediation, Postponement Fees and Title Expenses ■ Credit reports ■ Additional fees or service charges billed by a law firm or any entities the firm relies upon to provide third-party support functions performed on the Servicer’s behalf that are considered included in the attorney’s fees listed in Exhibit 57A and Exhibit 57B, Approved Bankruptcy Attorney Fees ■ Additional fees or service charges that are billed by a law firm or any entity the Servicer relies upon and are associated with Servicer functions. Servicers should pay vendors for handling such Servicer functions at their own expense. For non-reimbursable expenses, Servicers or their Permitted Vendors (see Section 2405.1(b) regarding use of PAID by Permitted Vendors) should not be requesting Freddie Mac’s written pre-approval by submitting a request for pre-approval (RPA) via the RPA functionality in PAID for these expense amounts. Freddie Mac Single-Family Seller/Servicer Guide Chapter 9701 As of 04/08/26 Page 9701-20 If Freddie Mac determines that the Servicer has directly or indirectly passed or charged to Freddie Mac any non-reimbursable expenses or charged Freddie Mac for Servicing obligations covered by the Servicing Spread (as set forth in Section 8103.2(b)), then Freddie Mac may pursue any or all remedies available under the Guide, other Purchase Documents and applicable law. (b) Denials and adjustments of expense reimbursement requests Freddie Mac reserves the right to withhold payment on a reimbursement request if: 1. Servicer fails to provide Freddie Mac with supporting documentation requested or in the time frame Freddie Mac requires 2. Freddie Mac did not receive the request within the expense reimbursement submission time frames (see Section 9701.1(e)) 3. The request includes expenses that are typically non-reimbursable unless the Servicer has obtained Freddie Mac’s written pre-approval 4. The request includes expenses for an amount in excess of the expense limits in Exhibit 57, 1- to 4-Unit Property Approved Expense Amounts; Exhibit 57A, Approved Attorney, Foreclosure, Mediation, Postponement Fees and Title Expenses; and Exhibit 57B, Approved Bankruptcy Attorney Fees, unless the Servicer obtained Freddie Mac’s written pre-approval. If Freddie Mac adjusts or denies the Servicer’s reimbursement request: ■ Information on the reason why Freddie Mac either adjusted or denied an expense reimbursement will be available in PAID ■ The Servicer may resubmit the reimbursement request via PAID provided the resubmission is within Freddie Mac’s time frame requirements, the Servicer claims only the disallowed expense and the appropriate documentation is attached and includes a justification for why the disallowed expense should be reimbursed (c) Default reporting requirements and reimbursement of claims The legal fees and costs the Servicer submits must reflect the same default action dates as reported via EDR. Failure to report Delinquency, foreclosure, bankruptcy and other relevant EDR data will result in the adjustment or denial of the request. (d) Expense offsets The Servicer must deduct certain funds from expenses incurred. These funds include positive Escrow balances at default, interest on Escrow balances, property insurance and primary mortgage insurance premium refunds. Freddie Mac Single-Family Seller/Servicer Guide Chapter 9701 As of 04/08/26 Page 9701-21 The Servicer’s requested expense reimbursements must be offset by any positive Escrow balance. Funds remaining in the Borrower’s Escrow account at default must be accounted for with the Servicer’s reimbursement request as income to offset expenses. Funds remaining in a temporary buydown account before the foreclosure action was started must be applied as set forth in Section 4204.3. Additionally, the Servicer is required to offset any incurred reimbursable expenses with the proceeds of rental income it receives during the foreclosure or REO holding period. Mortgage insurance premium refunds should be refunded directly to Freddie Mac by the MI on the claim for loss. If, however, the MI sends a refund of the mortgage insurance premium to the Servicer directly, the Servicer must credit the MI premium refund on the claim as income when it submits a request for expense reimbursement. In the following instances, Freddie Mac will bill the Servicer for the funds on the Performing Loans monthly Servicer Billing Statement or the Servicer Non-Performing Loans Invoice, respectively: ■ If the income reported by the Servicer exceeds the expenses requested ■ If the Servicer has no expenses currently being processed to offset the income that is due to Freddie Mac Note: Refer to Section 9102.1 for information on the payment of the Servicer Billing Statement and Non-Performing Loans Invoice via an Automated Clearing House draft. The Servicer must not offset anticipated or received mortgage insurance claim payments, property insurance claim proceeds or sales proceeds against any expenses incurred. (Refer to Section 9701.4(e) for information on remitting these funds to Freddie Mac.) (e) Forwarding remittances to Freddie Mac The Servicer is required to forward, via wire transfer or check, non-REO-related funds to Freddie Mac (see Directory 5) and REO-related funds to Freddie Mac (see Directory 6) within 10 Business Days of the Servicer’s receipt of the funds. Such funds typically include, but are not limited to, mortgage insurance claim proceeds and property insurance claim proceeds. The Servicer must forward the funds to Freddie Mac via check or wire transfer as follows: ■ For non-REO-related funds, the Servicer must forward the funds via check payable to the Federal Home Loan Mortgage Corporation and include the Freddie Mac loan number along with copies of related documentation with the check ■ For REO-related funds, the Servicer must forward the funds via check or wire transfer as follows: Freddie Mac Single-Family Seller/Servicer Guide Chapter 9701 As of 04/08/26 Page 9701-22 ❑ Remittances forwarded by check must be payable to the Federal Home Loan Mortgage Corporation and include the Freddie Mac loan number along with copies of related documentation with the check ❑ Remittances forwarded by wire transfer must reference the Freddie Mac loan number, address of property and the type of proceeds (e.g., REO repurchases, mortgage insurance claim proceeds and property insurance claim proceeds) The Servicer must not offset any expenses against property insurance claim proceeds or mortgage insurance claim proceeds.

Source: Freddie Mac Single-Family Seller/Servicer Guide Section 9701.2 — Property-related reimbursements · source URL · snapshot 5869ee9e606cd4ae