EXTENSION OF EFFECTIVE DATE FOR RENTAL INCOME REVISIONS ANNOUNCED IN BULLETIN

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1 TO: Freddie Mac Sellers January 31, SUBJECT: SELLING UPDATES This Guide Bulletin announces: Extension of effective date for rental income revisions announced in Bulletin Extension of the effective date for rental income revisions announced in Bulletin November 30, 2018 ULDD Phase 3 Guide updates to include ULDD Phase 3 requirements May 20, 2019 EFFECTIVE DATE All of the changes announced in this Bulletin are effective immediately unless otherwise noted. EXTENSION OF EFFECTIVE DATE FOR RENTAL INCOME REVISIONS ANNOUNCED IN BULLETIN Effective for Mortgages with Settlement Dates on and after November 30, 2018; however, Sellers may implement the changes in their entirety immediately if they have not already done so As announced in our January 10, 2018 Single-Family News Center article, we are extending the effective date for the revised rental income requirements announced in Bulletin from Settlement Dates on and after February 9, 2018 to Settlement Dates on and after November 30, The extension will provide us the opportunity to further review the Seller feedback we have received and consider if the requirements, format and/or language could be fine-tuned through additional specificity and/or revision for Seller ease of use. Sellers may continue to originate, underwrite and deliver Mortgages based on either the rental income requirements announced in Bulletin , in their entirety, or those in effect prior to Bulletin , in their entirety. The rental income requirement revisions announced in Bulletin had no impact on Loan Product Advisor feedback messages; therefore, there is no impact as a result of this extension. The feedback message for rental income was updated on August 9, 2017, to specifically refer to Guide Chapter 5306 rather than refer broadly to the Guide. Guide impacts: Guide Sections , , , , , and , Guide Forms 91, 92 and 998 and Glossary J-Q ULDD PHASE 3 Effective for Mortgages with Delivery Dates on and after May 20, 2019; however, Sellers may begin delivering the new ULDD Data Points beginning February 26, 2018 As announced in the January 30, 2018 joint Freddie Mac/Fannie Mae communication, Sellers must comply with the ULDD Phase 3 requirements effective for Mortgages with Application Received Dates on and after January 1, 2019 and Delivery Dates on and after May 20, Per Bulletin , we are updating the Guide to reflect the applicable dates and incorporate the ULDD Phase 3 requirements and clarifications for specific delivery programs, Mortgage products, information, attributes and

2 characteristics. The ULDD Phase 3 requirements are reflected in the ULDD Phase 3 specification addendum included in Appendix A Freddie Mac XML Data Requirements V Sellers should review the ULDD Phase 3 Addendum in its entirety to determine impacts to their systems or processes. Loan Selling Advisor SM will be updated on February 26, Therefore, the ULDD Phase 3 transition period will commence on February 26, 2018 and end on May 19, During the transition period, Sellers may begin delivering the applicable Phase 3 ULDD Data Points and valid values via manual entry or data import, as soon as they are operationally ready to do so. To remain aligned with Loan Selling Advisor, Loan Quality Advisor will also be updated on February 26, 2018 to accept submissions with the Phase 3 ULDD Data Points and valid values following the same transition period. We re updating Guide Exhibit 34 to remove Investor Feature Identifier (IFI) 583 for a Mortgage with an Affordable Second. This data will be required to be delivered through the Phase 3 ULDD Data Point Loan Affordable Indicator (Sort ID 513.1). During the transition period Sellers may deliver either the Phase 3 ULDD Data Point or IFI 583, but must not deliver both. The Secondary Financing Credit Fee in Price for Mortgages with Affordable Seconds meeting the requirements of Section will not be assessed in either case. For additional information, refer to the ULDD Frequently Asked Questions. As a reminder, to help prepare for delivery of the Phase 3 requirements and evaluate potential impacts to systems and processes, Sellers may take advantage of the Customer Test Environment (CTE). The CTE is available to preview the updated version of Loan Selling Advisor and test readiness to deliver the Phase 3 data and extension schema. Sellers can visit The Learning Center for more information on our training programs and reference the available job aid to better prepare for ULDD Phase 3 implementation. Guide impacts: Sections , , , , , , , , and and Exhibit 34 Loan Product Advisor terminology updates Effective for Mortgages with Delivery Dates on and after February 26, 2018 In Bulletin we updated the Guide to replace references to Loan Prospector with Loan Product Advisor, but at that time did not update references in Chapter 6302 since Loan Selling Advisor (formerly the Selling System ) was not yet updated to reflect this change. We are updating Loan Selling Advisor on February 26, 2018 to accept both Loan Prospector and Loan Product Advisor. We are updating the delivery requirements in the Guide to accept both terms in most instances and replacing other Loan Prospector references with Loan Product Advisor, as applicable. Guide impacts: Sections , , , , and ARMS We are updating Section to reflect the change of 5-year ARMs to 5/5 ARMs as announced in Bulletin Guide impact: Section GUIDE UPDATES SPREADSHEET For a detailed list of the Guide updates associated with this Bulletin and the topics with which they correspond, refer to the Bulletin (Selling) Guide Updates Spreadsheet available at Page 2

3 CONCLUSION If you have any questions about the changes announced in this Bulletin, please contact your Freddie Mac representative or call the Customer Support Contact Center at (800) FREDDIE. Sincerely, Christina K. Boyle Senior Vice President Single-Family Sales and Relationship Management Page 3

4 TO: Freddie Mac Servicers February 14, SUBJECT: SERVICING UPDATES This Guide Bulletin announces: Charge-off recommendations Updates to our requirements regarding charge-off recommendations August 1, 2018 Document custody Updates to our document custody requirements Guide Forms 16SF, Annual Eligibility Certification Report, and 1107SF, Seller/Servicer Change Notification Updates to Forms 16SF and 1107SF Additional Guide updates and reminders Further updates as described in the Additional Guide Updates and Reminders section of this Bulletin EFFECTIVE DATE All of the changes announced in this Bulletin are effective immediately unless otherwise noted. CHARGE-OFF RECOMMENDATIONS Effective August 1, 2018; however, Servicers may implement earlier if they are able to do so In continuing our efforts to avoid actions that could contribute to neighborhood blight, we are updating our requirements regarding Servicer recommendations of charge-offs to Freddie Mac. Under the direction of the FHFA, Freddie Mac and Fannie Mae are generally aligned in determining when to approve or deny a Servicer's charge-off recommendation. To utilize charge-offs as an appropriate and responsible loss mitigation tool and to minimize charge-offs of vacant and abandoned properties, where possible, we are: Specifying the situations in which, rather than proceeding with foreclosure, a Servicer is required to recommend a charge-off to Freddie Mac Updating lien release requirements when Freddie Mac approves a charge-off request; and Enhancing the Glossary definition of the term Risk of Property Ownership Required charge-off recommendations A Servicer must recommend a charge-off to Freddie Mac when the debt secured by the Mortgaged Premises is deemed uncollectible and/or any of the following situations exists: A short payoff has been approved by Freddie Mac and a balance remains. A short payoff may result from, among other things: A negotiated settlement with the Borrower, a legal settlement or an agreement to resolve a legal dispute A settlement related to: (i) a Condominium Project termination, or (ii) a unit (Mortgaged Premises) of a Condominium Project that is damaged and its repair is not feasible

5 A court order A Bankruptcy cramdown (Note: Pursuant to Guide Section , the Servicer must complete and transmit the final terms of a confirmed bankruptcy cramdown to Freddie Mac via the "Court Mandated Modification" screen in Workout Prospector ); or A receivership The Mortgaged Premises is subject to property seizure (refer to Guide Chapter 8402) For any Mortgage not subject to recourse or repurchase obligations under the Purchase Documents, the Servicer determines that it is not practical or possible to complete foreclosure or other enforcement of Freddie Mac s rights under the Note or Mortgage and/or to obtain clear title to the Mortgaged Premises The Servicer identifies a low balance Mortgage with a UPB that is $5,000 or less, regardless of the equity in the property, and the criteria in both Section (1)(a) and (b) are met. (Note: If the Servicer identifies a Mortgage with a UPB that is greater than $5,000, but the other criteria in Section (1)(a) and (b) are met, the Servicer may recommend a charge-off to Freddie Mac.) The Mortgaged Premises is a unit of a Condominium Project and: (i) the project is not presently economically viable, (ii) the project has been terminated or (iii) the unit is damaged and repair of the unit is not feasible The Mortgaged Premises has been impacted by a natural or man-made disaster, or other like circumstance, and rebuilding on the land is determined by the Servicer to be impracticable or impossible The Mortgage is secured by undeveloped land or any above-grade primary structure has been demolished and removed by the Borrower, jurisdiction or other party; and the vacant land (and any remaining outbuilding, if applicable) has been protected from waste, damage and vandalism A third party is willing to accept any risk of liability if it becomes the owner of the property The Mortgaged Premises poses a Risk of Property Ownership to Freddie Mac (as described below) Lien release requirements In most cases, when Freddie Mac approves a charge-off request, Freddie Mac will instruct the Servicer to release its lien on the property and cancel the Note as part of the closing of the approved request. Instructions to complete a lien release and cancelation of the Note as part of an approved charge-off request, if any, will be provided for in the approval letter in Workout Prospector. However, in situations in which future funds are anticipated, Freddie Mac will retain its lien on the property and will instruct the Servicer not to release the lien or cancel the Note on the approval letter in Workout Prospector until such time that funds are received by Freddie Mac. Risk of Property Ownership If a Mortgaged Premises poses a Risk of Property Ownership, the Servicer is required to contact Freddie Mac and report the Mortgage to Freddie Mac, even if the Mortgage is not delinquent. We are updating the Glossary definition of the term Risk of Property Ownership by providing a new example. The example emphasizes that Freddie Mac must be clearly apprised of the risk of liability to Freddie Mac if it becomes the owner of a property that poses a Risk of Property Ownership at the time that the Mortgage is reported to Freddie Mac. The example is as follows: There is Risk of Property Ownership if the condition of the Mortgaged Premises, or its immediate surroundings, poses a threat to the health or safety of a property owner (e.g., condemnation), or there is otherwise a situation or presence that is exigent or atypical that would cause a potential property owner to incur extraordinary risk of liability if it becomes the owner of the property. Guide updates We are updating Chapter 9210, Sections , , , , , , , , , , and and Glossary R-Z and deleting Chapter 8405 as a result of these changes to our requirements regarding charge-off recommendations. Page 2

6 DOCUMENT CUSTODY Additional Designated Custodian In November 2017, we began permitting Seller/Servicers to use Wells Fargo Bank, N.A. as a Designated Custodian. Except as stated below with respect to Mortgages sold through the Servicing Released Sales Process, Seller/Servicers have a choice of Designated Custodians: either The Bank of New York Mellon Trust Company, N.A. ( BNYM ) or Wells Fargo Bank, N.A. ( Wells Fargo ). Seller/Servicers that wish to establish a new Designated Custodian relationship with Wells Fargo must complete new Form 1035WF, Designated Custodial Agreement: Single Family Mortgages (Wells Fargo Bank, N.A.). Once completed, the paper version of the form executed by the Seller/Servicer must be delivered to Wells Fargo at the address provided in Directory 4. Unless otherwise requested by Freddie Mac, Seller/Servicers that have an existing Form 1035, Document Custodial Agreement: Single Family Mortgages, with Wells Fargo Bank and utilize Wells Fargo as Document Custodian: Do not need to complete a Form 1035WF Are no longer required to monitor the eligibility status of Wells Fargo because Freddie Mac performs that function for Seller/Servicers. However, the requirement of Section (b) that a Seller/Servicer notify Freddie Mac within one day of learning of the noncompliance of its Document Custodian (including a Designated Custodian) continues to apply. Notes for Mortgages sold through the Servicing Released Sales Process must continue to be delivered to BNYM as Designated Custodian. Contracting with Document Custodians In response to Seller/Servicer inquiries, we are updating the Guide to include our requirement on the number of Document Custodians with which each Seller/Servicer number may contract. Seller/Servicers must enter into a Tri-Party Agreement with a Document Custodian for each Seller/Servicer number. The Guide now states that Seller/Servicers may enter into Tri-Party Agreements with two Document Custodians per Seller/Servicer number, provided that at least one of them is a Designated Custodian. Glossary updates We are adding a Glossary definition for the term Tri-Party Agreement to refer to the suite of document custodial agreements between Freddie Mac, the Seller/Servicer and Document Custodian(s) (including the Designated Custodians): Forms 1035, 1035DC, Designated Custodial Agreement: Single Family Mortgages (The Bank of New York Mellon Trust Company, N.A.), and 1035WF. We are also updating the Glossary definitions of Designated Custodian and Document Custodian. Document Custodian certification and verification services In response to Document Custodian inquiries and to increase their efficiency, Freddie Mac may contract with certain Document Custodians to perform certification and/or verification services outside of the United States based on images of original documents. Such Document Custodians must maintain all original documents in a domestic vault and adhere to the strict requirements for information security and safeguarding of Borrowers private personal information as required in the Guide and Tri-Party Agreements. Seller/Servicers have no obligation to Freddie Mac to monitor or audit a Document Custodian s provision of services offshore. Such an arrangement by the Document Custodian, requiring Freddie Mac approval, should have no impact on a Seller/Servicer s current operations or obligations. Receipt of Notes and/or other related documents from BNYM for Mortgages paid in full Effective March 1, 2018 Seller/Servicers that utilize BNYM as a Document Custodian will no longer automatically receive loan documentation from BNYM based upon Freddie Mac s Paid in Full file, which identifies Mortgages that have Page 3

7 been paid off due to loan maturity or otherwise. To request the return of a Note and/or other documents from BNYM as Designated Custodian, Seller/Servicers must use the process described in Section (b)(ii). Contact BNYM with questions about their change in process (see Directory 4 for BNYM s contact information). Guide and Document Custody Procedures Handbook updates As a result of the changes related to Document Custody, we are: Creating new Form 1035WF For ease of reference and use, incorporating the Tri-Party Agreements (i.e., Forms 1035, 1035DC and 1035WF) into the Guide as fillable forms; and Updating Chapters 2202 and 8107, Sections , , , , , , , Directory 4, Guide Exhibit 28A and Glossaries A-I and R-Z Additionally, we are updating the Document Custody Procedures Handbook to reflect these changes. FORMS 16SF, ANNUAL ELIGIBILITY CERTIFICATION REPORT, AND 1107SF, SELLER/SERVICER CHANGE NOTIFICATION Effective November 10, 2017 We periodically review and adapt Forms 16SF and 1107SF to meet changing needs. As a result of Seller/Servicer feedback and our internal review, we have updated Forms 16SF and 1107SF to provide more flexibility for Seller/Servicers. Changes include: Allowing Seller/Servicers to add or remove recipients and designate which reminders and notices they receive related to Forms 16SF and 1107SF Enabling Seller/Servicers to attach documents to Form 16SF (e.g., insurance declarations pages, documentation describing organizational changes, etc.). The ability to attach documents to Form 1107SF was added in a previous update. Enabling Seller/Servicers to identify themselves as a privately insured bank or credit union or an international bank Adding an confirmation that will be sent to the certifying officer, person submitting either Form 16SF or Form 1107SF (if different from the certifying officer), and the Primary Freddie Mac Business Contact to confirm receipt of the either Form 16SF or Form 1107SF The electronic versions of these forms were updated on November 10, We will update the sample Form 16SF on FreddieMac.com and the PDF version of Form 1107SF in the Guide in a future Bulletin. Although Seller/Servicers will not see the above edits in the PDF version of Form 1107SF until then, the version of the PDF Form 1107SF in the Guide may be used until the updated version is available. ADDITIONAL GUIDE UPDATES AND REMINDERS Guide Exhibit 98, Expense Reimbursement/Incentive Payment Authorization for ACH Credits We are updating the Guide to permit delivery of Exhibit 98 as an Electronic Record (as defined in Section ). Servicers may submit Exhibit 98 to Freddie Mac as: (i) a paper form or (ii) an Electronic Record copy attached to an to counterparty_authorization@freddiemac.com. We are also updating Exhibit 98 to simplify instructions for use and include a notary acknowledgment section. In addition, we are reminding Servicers that: Each Servicer must have submitted the applicable certificate of incumbency form (i.e., Form 988SF-1, Form 988SF-2, or Form 989SF) and if necessary, any addendum to such form (i.e., Form 988ASF or Form 989ASF) (collectively, the COI forms ), together with a resolution of the Servicer's board of directors or other governing body (the "Resolution") identifying the Servicer's employees authorized to provide Wire Transfer Page 4

8 Instructions (as described in Section ) ("Authorized Employees") solely in connection with the Servicing of Mortgages for Freddie Mac in Part B All forms or exhibits providing Wire Transfer Instructions in connection with the Servicing of Mortgages for Freddie Mac, including Exhibit 98, must be executed by one of the Servicer s employees designated as an Authorized Employee on Part B of the Servicer's COI form Each Servicer must renew its COI forms every two years and its Resolution every four years, and determine if such renewal requires new or modified Wire Transfer Instructions. Freddie Mac will notify the Servicer of the renewal due date approximately 120 days in advance. Guide impacts: Sections , , and and Exhibit 98 Modification of a Mortgage impacted by an Eligible Disaster Capitalization and Extension Modification for Disaster Relief We are updating the Guide in response to Servicer inquiries regarding our requirements for determining the Trial Period Plan payment and terms of a Capitalization and Extension Modification for Disaster Relief ( Disaster Relief Modification ). The Disaster Relief Modification attempts to achieve a modified monthly principal and interest (P&I) payment amount that is equal to the pre-modified P&I payment amount by completing the following steps: 1. Capitalize arrearages 2. Determine the interest rate to be used, as follows: a. If the Mortgage is a fixed-rate Mortgage, the Servicer must use the existing interest rate b. If the Mortgage is an ARM or a Step-Rate Mortgage with no additional interest rate adjustments or steps scheduled, then the Servicer must use the existing interest rate; or c. If the Mortgage is an ARM or a Step-Rate Mortgage with additional interest rate adjustments or steps scheduled, then the Servicer must use the lesser of the Freddie Mac modification interest rate (posted on or the maximum step-rate/lifetime cap note rate; and 3. Modify the maturity date by extending the term in monthly increments in accordance with Section until the modified P&I payment amount equals the existing contractual P&I payment amount We are updating the Guide to specify that if, after the Servicer has completed step 1 and step 2, the resulting P&I payment amount is lower than the existing P&I payment amount without extending the term. The Servicer must not change the maturity date and must offer the modification terms to the Borrower. The resulting P&I payment amount may be lower than the contractual P&I payment amount if the Borrower has made a principal curtailment prior to the Eligible Disaster or has an ARM or Step-Rate Mortgage that results in a modified interest rate that is lower than the existing interest rate. Guide impact: Section Extend Modification for Disaster Relief Regarding the Extend Modification for Disaster Relief ( Extend Modification ) that was announced in Bulletin , the scenario described above will not impact the monthly P&I payment amount for a fixed-rate Mortgage because the Servicer will not be capitalizing arrearages or re-amortizing the UPB to generate a new monthly P&I payment amount for an Extend Modification. However, we would like to acknowledge that the monthly P&I payment amount is subject to change when the Mortgage is an ARM or a Step-Rate Mortgage because the Mortgage is modified to a fixed-rate Mortgage, and the interest-bearing UPB subsequently is reamortized. This also is an acceptable outcome, and may include more significant payment reductions if the Borrower has made one or more previous principal curtailments. We are not making any updates to the requirements for the Extend Modification. Servicers must continue to refer to Bulletin for complete requirements. Page 5

9 Liability insurance for condominiums In response to Seller/Servicer feedback, we have reviewed our requirements and are removing the requirement that the condominium homeowners association maintain certain additional liability insurance coverage, including the following: Comprehensive automobile liability Bailee s liability Elevator collision liability Garage keeper s liability Host liquor liability Workers compensation and employer s liability Contractual liability Guide impact: Section Transit insurance We are updating the Guide to clarify that the transit insurance carried by Document Custodians and Seller/Servicers must identify Notes as Negotiable Instruments (as defined in Section of the model Uniform Commercial Code) and must not exclude from coverage Notes with open endorsements. Guide impact: Section GUIDE UPDATES SPREADSHEET For a detailed list of the Guide updates associated with this Bulletin and the topics with which they correspond, refer to the Bulletin (Servicing) Guide Updates Spreadsheet available at CONCLUSION If you have any questions about the changes announced in this Bulletin, please contact your Freddie Mac representative or call the Customer Support Contact Center at (800) FREDDIE. Sincerely, Yvette W. Gilmore Vice President Servicer Performance Management Page 6

10 TO: Freddie Mac Sellers February 28, SUBJECT: SELLING UPDATES This Guide Bulletin announces: Updates related to Eligible Disaster Areas impacted by recent disasters Updates concerning automated collateral evaluation (ACE) appraisal waiver offers and collateral representation and warranty relief for Eligible Disaster Areas impacted by recent disasters Mortgages subject to a disaster-related forbearance plan as a result of the Borrower being impacted by a recent 2017 Eligible Disaster are not required to be included in the targeted quality control sample Cash payups for Mortgages with low loan balances Updates to the Guide to expand our low loan balance (LLB) cash payups to include additional Mortgages Condominium Unit Mortgage Credit Fee in Price Mortgages secured by detached Condominium Units will no longer be assessed the Condominium Unit Mortgage Credit Fee in Price March 1, 2018 Guide Form 442, Appraisal Update and/or Completion Report The option to submit Form 442 to the Uniform Collateral Data Portal (UCDP ) Additional Guide updates and reminders Further updates as described in the Additional Guide Updates and Reminders section of this Bulletin EFFECTIVE DATE All of the changes announced in this Bulletin are effective immediately unless otherwise noted. UPDATES RELATED TO ELIGIBLE DISASTER AREAS IMPACTED BY RECENT DISASTERS ACE appraisal waiver offers and collateral representation and warranty relief for properties in Eligible Disaster Areas Due to recent natural disasters, we previously stated that Sellers may not accept ACE appraisal waiver offers, and that collateral representation and warranty relief would not be available for properties located in zip codes corresponding to Eligible Disaster Areas affected by the California wildfires (with the exception of Orange County), Hurricane Harvey, Hurricane Irma or Hurricane Maria unless certain conditions were met. Loan Product Advisor, Loan Collateral Advisor and Loan Selling Advisor SM were updated to remove eligibility offers and messages for ACE appraisal waiver offers and representation and warranty relief for all impacted zip codes. Moving forward, as areas become eligible for ACE appraisal waiver offers and collateral representation and warranty relief again, these systems will be updated to reflect the applicable ACE appraisal waiver offers and collateral representation and warranty relief messages. As Sellers begin receiving these offers and messages, they may accept them without consideration of the associated Note Date of the Mortgage or confirming the condition of the Mortgaged Premises has not been adversely impacted. Once eligibility is reinstated, standard Guide eligibility with respect to appraisal waivers and collateral representation and warranty relief will apply.

11 With this Bulletin, Freddie Mac is announcing that it has begun to re-establish ACE appraisal waiver offers and Loan Collateral Advisor collateral representation and warranty relief for certain zip codes impacted by the California wildfires. The additional flexibilities identified in Bulletin remain in effect. Freddie Mac will continue to monitor the areas that remain ineligible for appraisal waivers and Loan Collateral Advisor collateral representation and warranty relief, including those associated with the hurricanes, and will re-establish eligibility as warranted. As eligibility is further reinstated, Freddie Mac systems will be updated accordingly and the same guidance provided above will apply. Targeted quality control sample Guide Section (b) states that Sellers must select all Mortgages sold to Freddie Mac that become 60 days or more past due in the first six months following the Note Date for a review as part of the Seller s in-house quality control program. In addition to the temporary selling and Servicing requirements announced in 2017 for Mortgages impacted by Eligible Disasters, this Bulletin provides that Mortgages subject to a disaster-related forbearance plan as a result of the Borrower being impacted by the California wildfires, Hurricane Harvey, Hurricane Irma or Hurricane Maria, pursuant to Guide Chapter 8404, are not required to be included in this targeted sample. CASH PAYUPS FOR MORTGAGES WITH LOW LOAN BALANCES Effective February 1, 2018 Bulletin announced a new opportunity for Sellers to receive LLB cash payups for Mortgages with UPBs less than or equal to $175,000. As announced in our January 19, 2018 Single-Family News Center article, effective February 1, 2018, we expanded our cash payups for Mortgages with LLBs to permit LLB cash payups for 30-year fixed-rate Mortgages with UPBs less than or equal to $200,000. Loan Selling Advisor began displaying the additional daily cash payup information for this loan attribute in both the PDF and XML grids on February 1, To take advantage of this new cash payup offering, Sellers must: Submit a request to receive payup pricing through the manual spot bid process by sending a data file containing the following information to cash_ex@freddiemac.com: product type, UPB, State where the Mortgaged Premises is located, FICO score and loan-to-value (LTV) ratio. Freddie Mac will provide contract pricing based on the loan-level data received. A data template can be provided by sending a request to the address stated above. Submit payup pricing requests and the required data by 4:15 p.m. Eastern time to ensure applicable contracts are submitted to Loan Selling Advisor before the cash desk closes at 5:00 p.m. Eastern time Guide impact: Section CONDOMINIUM UNIT MORTGAGE CREDIT FEE IN PRICE Effective for Mortgages with Settlement Dates on and after March 1, 2018 Currently, we assess a Credit Fee in Price of 75 basis points for all Condominium Unit Mortgages with an LTV ratio greater than 75%. In Bulletin we eliminated the separate underwriting paths for streamlined project reviews, which resulted in the consolidation of our LTV/total LTV (TLTV)/Home Equity Line of Credit (HELOC) TLTV (HTLTV) requirements. We also simplified the project eligibility requirements for Detached Condominium Projects. As a result, we reviewed our pricing for Condominium Unit Mortgages and, for Mortgages that are secured by detached Condominium Units, we will no longer assess the Condominium Unit Mortgages Credit Fee in Price. The Credit Fee in Price for Mortgages secured by attached Condominium Units will continue to be assessed. For Mortgages sold under the Cash program, Sellers must deliver the ULDD Data Point Investor Feature Identifier (Sort ID 368) and enter the valid value of H04 for Mortgages secured by detached Condominium Units. To ensure that the Condominium Unit Mortgage Credit Fee in Price will not be assessed for Page 2

12 Mortgages secured by detached Condominium Units, Sellers must deliver the Investor Feature Identifier H04. For Mortgages sold under the Guarantor program, there are no additional delivery requirements. To ensure that the Condominium Unit Mortgage Credit Fee in Price will not be assessed for Mortgages secured by detached Condominium Units, Sellers must deliver the existing ULDD Data Point Attachment Type (Sort ID 50) of Detached. Guide impacts: Section and Guide Exhibits 19 and 34 GUIDE FORM 442, APPRAISAL UPDATE AND/OR COMPLETION REPORT Option to submit Form 442 to the Uniform Collateral Data Portal Effective October 30, 2017 As announced in our October 17, 2017 Single-Family News Center article, we began supporting Form 442 in the Uniform Collateral Data Portal (UCDP), effective October 30, We are updating the Guide to specify that when Form 442 has been utilized to report an update of an appraisal and/or a certification of completion, Sellers have the option to submit the form to the UCDP. Guide impact: Section Overview of appraisal report forms As announced in Bulletin , Sellers are required to report the results of an appraisal update on Form 442. As such, we are updating the Guide to add Form 442 to our list of appraisal report forms. Guide impact: Section ADDITIONAL GUIDE UPDATES AND REMINDERS Inclusion of Cooperative Share Loans in maximum aggregate UPB calculations We are updating the Guide to include references to Cooperative Share Loans in calculating the maximum aggregate UPB of certain Mortgage types that may be included in the aggregate UPB of all Mortgages in: A Gold PC Pool under the fixed-rate Guarantor Program or A specific delivery under the MultiLender Swap program Cooperative Share Loans may only be included in the maximum aggregate UPB calculations if permitted under the Seller s Purchase Documents. Guide impact: Section Changes impacting Sellers from Bulletin We are notifying Sellers of the following changes that were announced to Servicers in Bulletin Forms 16SF, Annual Eligibility Certification Report, and 1107SF, Seller/Servicer Change Notification Effective November 10, 2017 We periodically review and adapt Forms 16SF and 1107SF to meet changing needs. As a result of Seller/Servicer feedback and our internal review, we updated Forms 16SF and 1107SF to provide more flexibility for Seller/Servicers. Changes include: Enabling Seller/Servicers to add or remove recipients and designate which reminders and notices they receive related to Forms 16SF and 1107SF Enabling Seller/Servicers to attach documents to Form 16SF (e.g., insurance declarations pages, documentation describing organizational changes, etc.). The ability to attach documents to Form 1107SF was added in a previous update. Page 3

13 Enabling Seller/Servicers to identify themselves as a privately insured bank or credit union or an international bank Adding an confirmation that will be sent to the certifying officer, person submitting either Form 16SF or Form 1107SF (if different from the certifying officer), and the Primary Freddie Mac Business Contact to confirm receipt of the either Form 16SF or Form 1107SF The electronic versions of these forms were updated on November 10, We will update the sample Form 16SF on FreddieMac.com and the PDF version of Form 1107SF in the Guide in a future Bulletin. Although Seller/Servicers will not see the above edits in the PDF version of Form 1107SF until then, the version of the PDF Form 1107SF in the Guide may be used until the updated version is available. Document Custody updates Additional Designated Custodian In November 2017, we began permitting Seller/Servicers to use Wells Fargo Bank, N.A. as a Designated Custodian, providing Seller/Servicers a choice of either The Bank of New York Mellon Trust Company, N.A. ( BNYM ) or Wells Fargo Bank, N.A. ( Wells Fargo ) as Designated Custodian, except with respect to Mortgages sold through the Servicing Released Sales Process as stated below. As announced in Bulletin , Seller/Servicers that wish to establish a new Designated Custodian relationship with Wells Fargo must complete new Form 1035WF, Designated Custodial Agreement: Single Family Mortgages (Wells Fargo Bank, N.A.). Once completed, the paper version of the form executed by the Seller/Servicer must be delivered to Wells Fargo at the address provided in Directory 4. Unless otherwise requested by Freddie Mac, Seller/Servicers that have an existing Form 1035, Document Custodial Agreement: Single Family Mortgages, with Wells Fargo Bank and utilize Wells Fargo as Document Custodian: Do not need to complete a Form 1035WF Are no longer required to monitor the eligibility status of Wells Fargo because Freddie Mac performs that function for Seller/Servicers. However, the requirement of Section (b) that a Seller/Servicer notify Freddie Mac within one day of learning of the noncompliance of its Document Custodian (including a Designated Custodian) continues to apply. Notes for Mortgages sold through the Servicing Released Sales Process must continue to be delivered to BNYM as Designated Custodian. Contracting with Document Custodians In response to Seller/Servicer inquiries, we updated the Guide to include our requirement on the number of Document Custodians with which each Seller/Servicer number may contract. Seller/Servicers must enter into a Tri-Party Agreement with a Document Custodian for each Seller/Servicer number. The Guide now states that Seller/Servicers may enter into Tri-Party Agreements with two Document Custodians per Seller/Servicer number, provided that at least one of them is a Designated Custodian. Glossary updates We added a Glossary definition for the term Tri-Party Agreement to refer to the suite of document custodial agreements between Freddie Mac, the Seller/Servicer and Document Custodian(s) (including the Designated Custodians): Forms 1035, 1035DC, Designated Custodial Agreement: Single Family Mortgages (The Bank of New York Mellon Trust Company, N.A.), and 1035WF. We also updated the Glossary definitions of Designated Custodian and Document Custodian. Document Custodian certification and verification services In response to Document Custodian inquiries and to increase their efficiency, Freddie Mac may contract with certain Document Custodians to perform certification and/or verification services outside of the United States based on images of original documents. Such Document Custodians must maintain all original documents in a domestic vault and adhere to the strict requirements for information security and safeguarding of Borrowers Page 4

14 private personal information as required in the Guide and Tri-Party Agreements. Seller/Servicers have no obligation to Freddie Mac to monitor or audit a Document Custodian s provision of services offshore. Such an arrangement by the Document Custodian, requiring Freddie Mac approval, should have no impact on a Seller/Servicer s current operations or obligations. Receipt of Notes and/or other related documents from BNYM for Mortgages paid in full Effective March 1, 2018 Seller/Servicers that utilize BNYM as a Document Custodian no longer automatically receive loan documentation from BNYM based upon Freddie Mac s Paid in Full file, which identifies Mortgages that have been paid off due to loan maturity or otherwise. To request the return of a Note and/or other documents from BNYM as Designated Custodian, Seller/Servicers must use the process described in Section (b)(ii). Contact BNYM with questions about their change in process (see Directory 4 for BNYM s contact information). Guide and Document Custody Procedures Handbook updates As a result of the changes related to Document Custody, we: Created new Form 1035WF For ease of reference and use, incorporated the Tri-Party Agreements (i.e., Forms 1035, 1035DC and 1035WF) into the Guide as fillable forms; and Updated Guide Chapters 2202 and 8107, Sections , , , , , , , Directory 4, Exhibit 28A and Glossaries A-I and R-Z Additionally, we updated the Document Custody Procedures Handbook to reflect these changes. Liability insurance for condominiums In response to Seller/Servicer feedback, we reviewed our requirements and removed the requirement that the condominium homeowners association maintain certain additional liability insurance coverage, including the following: Comprehensive automobile liability Bailee s liability Elevator collision liability Garage keeper s liability Host liquor liability Workers compensation and employer s liability Contractual liability Section was updated to reflect these changes. Transit insurance We updated Section to clarify that the transit insurance carried by Document Custodians and Seller/Servicers must identify Notes as Negotiable Instruments (as defined in Section of the model Uniform Commercial Code) and must not exclude from coverage Notes with open endorsements. GUIDE UPDATES SPREADSHEET For a detailed list of the Guide updates associated with this Bulletin and the topics with which they correspond, refer to the Bulletin (Selling) Guide Updates Spreadsheet available at Page 5

15 CONCLUSION If you have any questions about the changes announced in this Bulletin, please contact your Freddie Mac representative or call the Customer Support Contact Center at (800) FREDDIE. Sincerely, Christina K. Boyle Senior Vice President Single-Family Sales and Relationship Management Page 6

16 TO: Freddie Mac Servicers March 7, SUBJECT: EXTENSION OF FORECLOSURE SALE SUSPENSION IN PUERTO RICO AND THE U.S. VIRGIN ISLANDS Effective immediately, Freddie Mac is extending the suspension of all foreclosure sales through May 31, 2018 for Mortgaged Premises located in jurisdictions designated as Eligible Disaster Areas in Puerto Rico and the U.S. Virgin Islands as a result of Hurricane Irma or Hurricane Maria. This extends relief announced in prior Bulletins to help ensure Borrowers continue to receive the assistance they need. However, the Servicer may choose to proceed with the foreclosure sale on a Mortgage prior to May 31, 2018 if: The Mortgaged Premises has been identified as vacant or abandoned; and The Servicer has completed its property inspection and confirmed that there is no insurable damage or ability to receive Federal Emergency Management Agency (FEMA) funds on the Mortgaged Premises If you have any questions about the change announced in this Bulletin, please contact your Freddie Mac representative or call the Customer Support Contact Center at (800) FREDDIE. Sincerely, Yvette W. Gilmore Vice President Servicer Performance Management

17 TO: Freddie Mac Sellers March 28, SUBJECT: SELLING UPDATES This Guide Bulletin announces: Increases to the LTV/TLTV/HTLTV ratios for purchase and no-cash-out refinance Mortgages secured by second homes and 2-unit Primary Residences An increase in the maximum loan-to-value (LTV)/total LTV (TLTV)/Home Equity Line of Credit (HELOC) TLTV (HTLTV) ratios for second homes and 2-unit Primary Residences Condominium Projects Elimination of the project review type for 2- to 4-Unit Condominium Projects June 28, 2018 Updates to our requirements for Freddie Mac-owned no cash-out refinance Condominium Unit Mortgages Updates to our requirements relating to the marketing of units in New Condominium Projects No longer requiring delivery of certain ULDD Data Points for Mortgages secured by units in Detached Condominium Projects Opinions of title for Mortgages secured by a unit in a Planned Unit Development Updates to our requirements to allow an attorney s opinion of title Additional Guide updates and reminders Further updates as described in the Additional Guide Updates section of this Bulletin EFFECTIVE DATE All of the changes announced in this Bulletin are effective immediately unless otherwise noted. INCREASES TO THE LTV/TLTV/HTLTV RATIOS FOR PURCHASE AND NO CASH-OUT REFINANCE MORTGAGES SECURED BY SECOND HOMES AND 2-UNIT PRIMARY RESIDENCES In an effort to provide greater access to credit, we reviewed our maximum LTV/TLTV/HTLTV ratios for purchase and no cash-out refinance Mortgages secured by second homes and 2-unit Primary Residences and are increasing the maximum LTV/TLTV/HTLTV ratios as follows: Purchase and no cash-out refinance secured by: Current maximum LTV/TLTV/HTLTV ratios 2-unit Primary Residence 80% 85% Second home 85% 90% Revised maximum LTV/TLTV/HTLTV ratios

18 Due to these changes, the following Credit Fees in Price will now apply: A new 25 basis point Credit Fee in Price for second home Mortgages with LTV ratios greater than 85%, with the exception of Freddie Mac Relief Refinance Mortgages, and The Number of Units Credit Fee in Price for 2-unit Primary Residences for Mortgages with LTV ratios greater than 80% but less than or equal to 85% Loan Product Advisor feedback messages will be updated by March 28, 2018 to reflect these changes. Guide impacts: Guide Sections , and and Exhibit 19 CONDOMINIUM PROJECTS 2- to 4-Unit Condominium Projects Effective June 28, 2018 Project review types Currently, for a Mortgage secured by a Condominium Unit in a 2- to 4-Unit Condominium Project, Sellers must comply with the requirements for one of the following project review types: 2- to 4-Unit Condominium Projects, or Reciprocal project reviews To provide Sellers more flexibility in reviewing 2- to 4-Unit Condominium Projects, we are eliminating the project review type for 2- to 4-Unit Condominium Projects. Sellers will be able to choose from the following project review types for 2- to 4-Unit Condominium Projects: Streamlined reviews Established Condominium Projects New Condominium Projects, or Reciprocal project reviews We are revising the definitions of the Glossary terms 2- to 4-Unit Condominium Project, Established Condominium Project and New Condominium Project in connection with eliminating the project review type for 2- to 4-Unit Condominium Projects. Condominium Project eligibility requirements for streamlined reviews, Established Condominium Projects and New Condominium Projects review types With the elimination of the 2- to 4-Unit Condominium Project review type, we are modifying the project eligibility requirements for streamlined reviews, Established Condominium Projects and New Condominium Projects to be applicable to 2- to 4-Unit Condominium Projects. The requirements for reciprocal reviews remain unchanged. We are adding new requirements for Established Condominium Projects and New Condominium Projects review types specific to 2- to 4-Unit Condominium Projects such as: No units can be 60 or more days delinquent in the payment of the homeowners association assessments New owner-occupancy requirements if the property will be used as an investment property Guide impacts: Sections through , , , and and Glossaries A-I and J-Q Freddie Mac-owned no cash-out refinance Condominium Unit Mortgages Currently, for Freddie Mac-owned no cash-out refinance Condominium Unit Mortgages, Sellers are required to comply with the Condominium Project review and eligibility requirements in Guide Chapter Page 2

19 In response to Sellers feedback and to streamline the Mortgage underwriting process, we will no longer require Sellers to determine compliance with the Condominium Project review and eligibility requirements if the Condominium Unit Mortgage being refinanced is currently owned by Freddie Mac in whole or in part or securitized by Freddie Mac and if certain requirements are met including, but not limited to: Maximum 80% LTV/TLTV/HTLTV ratios The project is not a Condominium Hotel, houseboat project, timeshare project or project with segmented ownership The project complies with all applicable property and title insurance requirements, and All other requirements in Section (c) are met Additionally, Seller/Servicers are not required to determine the existence or adequacy of the project liability insurance and/or the fidelity or employee dishonesty insurance as required in Sections and The Condominium Unit Mortgage delivery requirements in Section for ULDD Data Point Project Classifications Identifier (Sort ID 42) are being updated to reflect this change. Sellers must enter Exempt From Review for Freddie Mac-owned no cash-out refinance Condominium Unit Mortgages. Special delivery requirements for Freddie Mac-owned no cash-out refinance Condominium Unit Mortgages are being added to Section (b)(ii). Sellers must enter the valid value of FRE for ULDD Data Point Related Loan Investor Type (Sort ID 222) and provide the associated Freddie Mac loan number of the Mortgage being refinanced for ULDD Data Point Related Investor Loan Identifier (Sort ID 221). Sellers must also deliver the following ULDD Data Point Investor Feature Identifier (Sort ID 368), if applicable: Investor Feature Identifier (IFI) "001" if the Condominium Unit Mortgage being refinanced was sold with recourse for the life of the Mortgage or the Mortgage was credit enhanced with recourse for the life of the Mortgage after it was sold to Freddie Mac IFI "033" if the Condominium Unit Mortgage being refinanced was sold with indemnification for the life of the Mortgage or the Mortgage was credit enhanced with indemnification for the life of the Mortgage after it was sold to Freddie Mac No IFI is required to deliver Freddie Mac-owned no cash-out refinance Condominium Unit Mortgages when the Condominium Unit Mortgage being refinanced has recourse or indemnification for less than the life of the Mortgage. Guide impacts: Sections , , , , and and Exhibit 34 Marketing units in New Condominium Projects In response to Sellers feedback, we are eliminating the requirement that the sales program developed for marketing units in a New Condominium Project must recognize and provide procedures for complying with all laws pertaining to the advertising and sale of real estate, the form and content of sales contracts and the method for handling deposits connected with the sale. Guide impact: Section Delivery requirements for Mortgages secured by units in Detached Condominium Projects To streamline the delivery requirements for Mortgages secured by units in Detached Condominium Projects, we are removing the requirement to provide the following ULDD Data Points for these Mortgages: Project Design Type/Project Design Type Other Description (Sort IDs 43/44) Project Dwelling Unit Count (Sort ID 45) Project Dwelling Units Sold Count (Sort ID 46) As a result, we are updating the Guide to: Remove these ULDD Data Points from the table of data required for all Condominium Unit Mortgages, and Page 3