Servicing Essentials: Compliance Donald B. Griffin Vice President Servicer Relationship Management January 14, 2016

© Freddie Mac November  Servicing Bulletin »Borrower Contact and Solicitation »Servicing Remedy Framework »Other Updates  Prospective Policy Topics  Servicer’s Quality Control Program Agenda

© Freddie Mac November  Update: Providing Servicers with a more efficient and flexible process for conducting borrower outreach. Generally, Servicers will have less stringent requirements and more options to tailor their borrower contact campaigns and solicitation to best fit their portfolio.  Rationale/ Customer Impact: In response to industry feedback to provide more flexibility in borrower outreach efforts.  Effective June 1, 2016; however, Servicers are encouraged to implement these changes as early as possible. Servicing Bulletin Borrower Contact and Solicitation

© Freddie Mac November Servicing Bulletin Borrower Contact and Solicitation

© Freddie Mac November Servicing Bulletin Borrower Contact and Solicitation

© Freddie Mac November Servicing Bulletin Servicing Remedy Framework  Update: Expanding upon provisions of the existing end-to-end Servicing Remedy process. »Defining key terms »Outlining steps for the process to remediate Servicing Violations and related Servicing Defects  Rationale: Provide greater transparency/clarity so Servicers have a better understanding of the Servicing Remedy process.  Customer impact: Helps Servicers more effectively manage their risk regarding Servicing Violations and their associated remedies.  Effective January 1, 2016

© Freddie Mac November Servicing Bulletin Servicing Remedy Framework

© Freddie Mac November Servicing Bulletin Servicing Remedy Framework  Where can Servicers get more information? »The process flow and FAQs will be available from the Bulletin cover letter and on our Servicing Success Program web page. » _remedy_faq.pdfhttp:// _remedy_faq.pdf

© Freddie Mac November Servicing Bulletin Other Updates  Deed-in-lieu of foreclosure incentives »Removed the expiration date for the supplemental Borrower incentive ($7,000) announced in Bulletin  Elimination of Subsequent Transfer of Servicing Processing Fee »Removed $500 transfer processing fee for all Subsequent Transfer of Servicing requests submitted to Freddie Mac on or after December 16, 2015.

© Freddie Mac November  2016 FHFA Scorecard  Chronic delinquency solution  UBAF revisions and Borrower documentation requirements  2017 Servicing Success Scorecard  Future State/Post Crisis Loss Mitigation Strategies  Investor Reporting and Remittance Change Initiative  Structured Transactions Prospective Servicing Policy Issues

© Freddie Mac November  Quality Control Program Requirements (S 51.29) »Written policies and procedures »Consistently monitor compliance »Document results of quality control reviews »Remediation of QC deficiencies required High Risk Processes »Cash Accounting, Custodial Account Management »Investor Reporting and Remittance »Escrow Management »ARM Processing »Borrower Contact and Solicitation »Borrower Assistance and Foreclosure Avoidance »Default Time Line Management Servicer’s Quality Control Program

© Freddie Mac November  Freddie Mac Compliance Programs »CORE Audits »Servicer Success File Reviews –Prudent Servicing Review –Short Sale Compliance Review –Loan Modification Compliance Review Servicer’s Quality Control Program

© Freddie Mac November  Resources to support you throughout the life of the loan »Comprehensive web content »800-FREDDIE help line »Interactive and self-paced training »Live customer briefings »Executive calls »Service-level standards »User guides and tutorials Delivering Comprehensive Support

© Freddie Mac November Expanding Servicers’ Tool Set for Assisting Borrowers  Freddie Mac Service Loans application  Default management tools »Imminent Default Indicator™ »EarlyIndicator ® »Workout Prospector ® »Workout Manager ® »Timeline Manager SM »Default Reporting Manager SM »REO Manager ®  Mortgage Help Navigator  Servicing Success Program