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					                                    Freddie Mac
Document Custody Procedures Handbook




Freddie Mac Document Custody Procedures Handbook
March 2012
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Freddie Mac Document Custody Procedures Handbook
March 2012                                         ii   Table of Contents
Table of Contents

CHAPTER 1 - DOCUMENT CUSTODIAL OPTIONS AND REQUIREMENTS .................................................................... 1
       Overview ......................................................................................................................................................... 2
       Document Custodians ..................................................................................................................................... 2
       Eligibility.......................................................................................................................................................... 3
       Application and Approval Process ................................................................................................................... 4
       Access to the Selling System/Document Custodian Roles ................................................................................ 4
       Annual Reporting ............................................................................................................................................ 4
       Terminating the Custodial Relationship ........................................................................................................... 5
CHAPTER 2 - DUTIES AND RESPONSIBILITIES ........................................................................................................... 1
       Compliance and Controls................................................................................................................................. 2
       Changes to Institution Information .................................................................................................................. 7
       Insurance Coverage ......................................................................................................................................... 8
CHAPTER 3 - DOCUMENT DELIVERY AND PROCESSING PROCEDURES ..................................................................... 1
       Background ..................................................................................................................................................... 2
       Documentation to be Verified ......................................................................................................................... 3
       Verification Requirements ............................................................................................................................... 3
       Data Verification ............................................................................................................................................. 4
       Note Verification ........................................................................................................................................... 11
       Borrower’s Signature..................................................................................................................................... 11
       Lost Note Affidavits ....................................................................................................................................... 15
       Endorsements ............................................................................................................................................... 16
       Endorsement Chains ..................................................................................................................................... 18
       Assignments .................................................................................................................................................. 19
       Reviewing Supplemental Documentation ...................................................................................................... 22
       Resolving Discrepancies ................................................................................................................................ 23
       Post-Certification Corrections to Note ........................................................................................................... 23
       Retention Period ........................................................................................................................................... 23
       New York Consolidation, Extension and Modification Agreements (“NY CEMAs”) ......................................... 24
       MERS-Registered Mortgages ......................................................................................................................... 25
CHAPTER 3A - MIDANET® DELIVERY AND PROCESSING PROCEDURES..................................................................... 1
       Introduction .................................................................................................................................................... 2
       Verifying Data and Documentation ................................................................................................................. 2
       Resolving Discrepancies .................................................................................................................................. 2
       Completing Certification.................................................................................................................................. 3
       MERS Registered Mortgages ........................................................................................................................... 4
CHAPTER 3B - ULDD DELIVERY AND PROCESSING PROCEDURES ............................................................................. 1
       Introduction .................................................................................................................................................... 2
       Uniform Loan Delivery Dataset........................................................................................................................ 3
       Resources ........................................................................................................................................................ 7



Freddie Mac Document Custody Procedures Handbook
March 2012                                                                          iii                                                         Table of Contents
CHAPTER 4 - DOCUMENT RELEASE PROCEDURES .................................................................................................... 1
        Introduction .................................................................................................................................................... 2
        Form 1036 Requirements ................................................................................................................................ 2
        Form 1036DC Requirements ........................................................................................................................... 3
        Document Release Types ................................................................................................................................ 3
        New York Consolidation, Extension and Modification Agreement (“NY CEMA”) Mortgage Note Release
        Procedures ...................................................................................................................................................... 4
        Paid in Full Notes............................................................................................................................................. 5
        Return of Released Documents ....................................................................................................................... 5
        Control and Safekeeping of Released Documents............................................................................................ 5
        Retention Period ............................................................................................................................................. 5
CHAPTER 5 - SUBSEQUENT TRANSFERS OF SERVICING AND CUSTODY PROCEDURES ............................................. 1
        Introduction .................................................................................................................................................... 2
        General Responsibilities .................................................................................................................................. 2
        Evidence of Transferee Document Custodian Approval ................................................................................... 3
        Transferor Document Custodian Responsibilities ............................................................................................ 3
        Transferee Document Custodian Responsibilities ............................................................................................ 4
        Transfers of Servicing of MERS Registered Mortgages ..................................................................................... 5
        Termination of Custodial Agreement ............................................................................................................... 6
        Extension Approval ......................................................................................................................................... 6
CHAPTER 6 - PROCESSING BALLOON/RESET MORTGAGES ...................................................................................... 1
        Overview ......................................................................................................................................................... 2
        Processing Balloon/Reset Mortgages .............................................................................................................. 2
        Certifying Balloon Loan Modifications ............................................................................................................. 2
        Loan Modification Custody .............................................................................................................................. 3
APPENDIX A - JOB AIDS ............................................................................................................................................ 1
            JOB AID 1 – FIXED RATE NOTE .................................................................................................................... 2
            JOB AID 2 – ADJUSTABLE RATE NOTE ........................................................................................................ 5
            JOB AID 3 – ADJUSTABLE RATE NOTE (CONVERTIBLE) .............................................................................. 9
            JOB AID 4 – FIXED RATE BALLOON NOTE ................................................................................................ 15
            JOB AID 5 – CHAIN OF ASSIGNMENTS AND ENDORSEMENTS .................................................................. 20
APPENDIX B - MISMO JOB AIDS ............................................................................................................................... 1
            JOB AID 1 – FIXED RATE NOTE .................................................................................................................... 2
            JOB AID 2 – ADJUSTABLE RATE NOTE ........................................................................................................ 5
            JOB AID 3 – ADJUSTABLE RATE NOTE (CONVERTIBLE) .............................................................................. 9
            JOB AID 4 – FIXED RATE BALLOON NOTE ................................................................................................ 15
APPENDIX C - FORMS .............................................................................................................................................. 1
            FORM 1 –FOUND NOTE CERTIFICATION...................................................................................................... 2




Freddie Mac Document Custody Procedures Handbook
March 2012                                                                          iv                                                        Table of Contents

				
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