Common use of Interest Credit Clause in Contracts

Interest Credit. If Freddie Mac holds a Guaranteed Mortgage with respect to which interest credits are payable by the Secretary and the Secretary cancels such credits due to a borrower default, as provided in section 4.10(E) of the Handbook, only interest credits related to interest accruing after the date of the Secretary's notice to Freddie Mac or the Subservicer of such cancellation will be deemed unearned. Such a cancellation will not deprive Freddie Mac of the right to receive interest credits with respect to interest accrued prior to the cancellation, even if, because interest credits are paid less often than monthly, the credits with respect to such accrued interest are not payable to Freddie Mac until after the cancellation.