source:
  type: regulation
  id: fhlmc-9401.2
  authority: Freddie Mac Single-Family Seller/Servicer Guide §9401.2 — Managing bankruptcy filings and delinquency
    (09/10/25)
  description: "Freddie Mac Guide §9401.2 (Managing bankruptcy filings and delinquency). Gap-fill (verbatim, ID-diff).\
    \ \n"
obligations:
- id: fhlmc-9401.2-0
  canonical_id: fhlmc-9401.2-0
  section: Freddie Mac Guide 9401.2
  description: '9401.2 Managing bankruptcy filings and delinquency: (09/10/25) This section contains requirements
    related to: ■ Multiple bankruptcy filings ■ Notifying Freddie Mac of bankruptcy proceedings ■ Managing new bankruptcy
    filings ■ Managing Mortgages that become delinquent subsequent to bankruptcy filing ■ Bankruptcy cramdowns (a)
    Multi…'
  type: do
  tags:
  - regulator-direct
  - gap-fill
  - fhlmc-guide
  - section-complete
  primary_source:
    tier: 1
    authority: Freddie Mac Single-Family Seller/Servicer Guide §9401.2 — Managing bankruptcy filings and delinquency
      (09/10/25)
    source_class: gse-guide
    source_url: https://guide.freddiemac.com/
    snapshot_id: 5869ee9e606cd4ae
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:9a1b23e5024bb369e7a59d36b3702383c11ace68b5d209fdef791bc8f955c637
    paragraph_quote: '(09/10/25) This section contains requirements related to: ■ Multiple bankruptcy filings ■
      Notifying Freddie Mac of bankruptcy proceedings ■ Managing new bankruptcy filings ■ Managing Mortgages that
      become delinquent subsequent to bankruptcy filing ■ Bankruptcy cramdowns (a) Multiple bankruptcy filings (i)
      Identifying previous bankruptcy filings A Borrower may file for bankruptcy protection more than once or under
      different chapters of the bankruptcy laws. When the Servicer receives notice of a Borrower filing a petition
      for protection under the bankruptcy laws, the Servicer must: ■ Check its Mortgage records to determine if
      the Borrower has previously filed for bankruptcy protection ■ Refer the bankruptcy case to counsel if the
      Servicer’s records disclose a previous bankruptcy filing for that Borrower and the Mortgage is delinquent
      (ii) Actions for bankruptcy filings The Servicer must direct counsel to take appropriate action, including:
      ■ If the Borrower has filed multiple times but the bankruptcies are more than 12 months apart: 1. Motion to
      annul the automatic stay to confirm foreclosure sale if the Servicer was unaware that the Borrower had filed
      for bankruptcy and the Servicer had conducted a foreclosure sale'
    drafter_attestation: Verbatim from Freddie Guide §9401.2 body (max-gap occurrence), snapshot 5869ee9e606cd4ae;
      substring-verified.
  judgment: false
- id: fhlmc-9401.2-1
  canonical_id: fhlmc-9401.2-1
  section: Freddie Mac Guide 9401.2
  description: '9401.2 Managing bankruptcy filings and delinquency: 401-6 2. Motion to dismiss the bankruptcy case
    if it can be shown that there has been no substantial change in the Borrower’s financial circumstances since
    the last bankruptcy filing or the Borrower has no prospect of repayment under a reorganization plan 3. Object
    to the confirm…'
  type: do
  tags:
  - regulator-direct
  - gap-fill
  - fhlmc-guide
  - section-complete
  primary_source:
    tier: 1
    authority: Freddie Mac Single-Family Seller/Servicer Guide §9401.2 — Managing bankruptcy filings and delinquency
      (09/10/25)
    source_class: gse-guide
    source_url: https://guide.freddiemac.com/
    snapshot_id: 5869ee9e606cd4ae
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:9a1b23e5024bb369e7a59d36b3702383c11ace68b5d209fdef791bc8f955c637
    paragraph_quote: '401-6 2. Motion to dismiss the bankruptcy case if it can be shown that there has been no substantial
      change in the Borrower’s financial circumstances since the last bankruptcy filing or the Borrower has no prospect
      of repayment under a reorganization plan 3. Object to the confirmation of a Chapter 13 plan and a motion to
      dismiss in connection with a Chapter 13 bankruptcy in which the reorganization plan appears to be infeasible
      or offered in bad faith or it can be shown that there has been no substantial change in the Borrower’s financial
      circumstances since the last bankruptcy filing 4. Motion for “in rem” relief or 180-day bar to prevent the
      Borrower from filing another bankruptcy case in the future affecting the property securing Freddie Mac’s Mortgage
      when there are successive filings with a scheme of fraudulent property transfers 5. Perform any other actions
      as deemed appropriate and permitted under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005
      ■ If the multiple filing is within 12 months of the previous filing: 1. Object in the event that the Borrower
      petitions to extend the automatic stay: ■ When the Borrower’s bankruptcy is presumptively filed not in good
      faith under the Bankruptcy Code ■ When the Servicer believes that the filing was offered in bad faith, or
      ■ If there has been no substantial change in the Borrower’s financial circumstances since the last bankruptcy
      filing. (See Exhibit 57B, Approved Bankruptcy Attorney Fees, for the related allowable fee for filing an objection
      to an extension of the automatic stay and attending the related court hearings.) 2. Take any other actions
      as deemed appropriate and permitted under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005
      (b) Notifying Freddie Mac of bankruptcy proceedings The Servicer must report a bankruptcy filing to Freddie
      Mac, regardless of whether the Borrower is current or delinquent in his or her Mortgage payments. The Servicer
      must submit this notification via an EDR transmission within the first three Business Days of the month following
      the month in which the Servicer received notice of the filing. The Servicer must also include the filing date
      and the applicable default action code (as listed below) to indicate the bankruptcy chapter number.'
    drafter_attestation: Verbatim from Freddie Guide §9401.2 body (max-gap occurrence), snapshot 5869ee9e606cd4ae;
      substring-verified.
  judgment: false
- id: fhlmc-9401.2-2
  canonical_id: fhlmc-9401.2-2
  section: Freddie Mac Guide 9401.2
  description: '9401.2 Managing bankruptcy filings and delinquency: 401-7 Refer to Section 9301.11(b) and Exhibit
    83A, Determining State Foreclosure Timeline Performance Compensatory Fees, for allowable State foreclosure timeline
    delays related to the Borrower filing for bankruptcy protection. The bankruptcy petition chapters and applicable
    defau…'
  type: do
  tags:
  - regulator-direct
  - gap-fill
  - fhlmc-guide
  - section-complete
  primary_source:
    tier: 1
    authority: Freddie Mac Single-Family Seller/Servicer Guide §9401.2 — Managing bankruptcy filings and delinquency
      (09/10/25)
    source_class: gse-guide
    source_url: https://guide.freddiemac.com/
    snapshot_id: 5869ee9e606cd4ae
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:9a1b23e5024bb369e7a59d36b3702383c11ace68b5d209fdef791bc8f955c637
    paragraph_quote: '401-7 Refer to Section 9301.11(b) and Exhibit 83A, Determining State Foreclosure Timeline
      Performance Compensatory Fees, for allowable State foreclosure timeline delays related to the Borrower filing
      for bankruptcy protection. The bankruptcy petition chapters and applicable default action codes are: Bankruptcy
      petition chapters and applicable default action codes Bankruptcy chapter Default action code Chapter 7 65
      Chapter 11 66 Chapter 12 59 Chapter 13 67 The Servicer must also notify Freddie Mac when the court confirms
      the bankruptcy plan by reporting default action code 69 (Bankruptcy plan confirmed) or, in the event of a
      scheduled Bankruptcy Cramdown, default action code of 35 (Bankruptcy Cramdown Scheduled) within the first
      three Business Days of the month following the month in which the confirmation occurred. The Servicer must
      continue to report via an EDR transmission each month that the Borrower is in bankruptcy until the court clears
      the bankruptcy or lifts the stay. The Servicer must notify Freddie Mac within the first three Business Days
      of the month following the month in which either of these actions occur via an EDR transmission using default
      action code 76 (Bankruptcy court clearance obtained/Stay lifted). The Servicer must include the date the action
      occurred. If a bankruptcy converts from one chapter to another, the Servicer must report a default action
      code 76 (Bankruptcy court clearance) to close the prior bankruptcy chapter. The conversion date is the bankruptcy
      release date for the prior bankruptcy chapter and the filing date for the new chapter. Example: If a Chapter
      13 converted to a Chapter 7 on 01/30/xx, the Servicer would report default action code 76 using 01/30/xx to
      close the Chapter 13 status and a default action code 65 using 01/30/xx to open the Chapter 7 bankruptcy.
      Note: For additional information on EDR reporting requirements, refer to Section 9102.6.'
    drafter_attestation: Verbatim from Freddie Guide §9401.2 body (max-gap occurrence), snapshot 5869ee9e606cd4ae;
      substring-verified.
  judgment: false
- id: fhlmc-9401.2-3
  canonical_id: fhlmc-9401.2-3
  section: Freddie Mac Guide 9401.2
  description: '9401.2 Managing bankruptcy filings and delinquency: 401-8 (c) Managing new bankruptcy filings (i)
    For Mortgages current at the time of filing If a Borrower is current in his or her Mortgage payments at the
    time the Borrower files a Chapter 7, 12 or 13 bankruptcy petition, the Servicer is not required to refer the
    matter to counsel…'
  type: do
  tags:
  - regulator-direct
  - gap-fill
  - fhlmc-guide
  - section-complete
  primary_source:
    tier: 1
    authority: Freddie Mac Single-Family Seller/Servicer Guide §9401.2 — Managing bankruptcy filings and delinquency
      (09/10/25)
    source_class: gse-guide
    source_url: https://guide.freddiemac.com/
    snapshot_id: 5869ee9e606cd4ae
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:9a1b23e5024bb369e7a59d36b3702383c11ace68b5d209fdef791bc8f955c637
    paragraph_quote: '401-8 (c) Managing new bankruptcy filings (i) For Mortgages current at the time of filing
      If a Borrower is current in his or her Mortgage payments at the time the Borrower files a Chapter 7, 12 or
      13 bankruptcy petition, the Servicer is not required to refer the matter to counsel, and Freddie Mac will
      not reimburse the Servicer if the Servicer does so. If the Servicer determines that special circumstances
      exist that require case management by counsel on a current Mortgage (e.g., if the Servicer receives a proposed
      reorganization plan that includes a bankruptcy cramdown), then the Servicer must obtain Freddie Mac’s prior
      written approval via e-mail (see Directory 5) to obtain counsel and to incur the legal expense by submitting
      a request for pre-approval via PAID (Payments Automated Intelligent and Dynamic) (see Exhibit 88, Servicing
      Tools). All Chapter 11 bankruptcy cases must be referred to counsel as soon as the Servicer receives notice
      that the Borrower has filed for bankruptcy protection, regardless of whether the Mortgage payments are current.
      If applicable, refer to Section 9401.2(d) for requirements related to managing Mortgages that become delinquent
      subsequent to bankruptcy filing. (ii) For Mortgages delinquent at the time of filing or for bankruptcy filings
      after a foreclosure sale The Servicer must refer the bankruptcy to counsel, whether a Chapter 7, 11, 12 or
      13 bankruptcy petition, within three Business Days of the Servicer’s receipt of notice that a petition has
      been filed if: ■ The Borrower is at least 30 days delinquent in his or her Mortgage payments at the time bankruptcy
      is filed ■ The Borrower files a bankruptcy petition after the foreclosure sale and the bankruptcy filing invalidates
      the foreclosure sale. (See Section 9301.10(a) for requirements on requesting a rollback if the Servicer determines
      that the foreclosure sale is legally invalid or void.) ■ The Borrower files a bankruptcy petition after the
      foreclosure sale but prior to the expiration of a redemption, confirmation or ratification period. (See Section
      9301.10(a) regarding circumstances where it may be in Freddie Mac’s best interest to process a rollback to
      allow the Servicer to report applicable information relating to a bankruptcy repayment plan, if applicable.)
      Freddie Mac will reimburse the Servicer for expenses the Servicer incurs in accordance with Section 9401.4
      and Chapter 9701.'
    drafter_attestation: Verbatim from Freddie Guide §9401.2 body (max-gap occurrence), snapshot 5869ee9e606cd4ae;
      substring-verified.
  judgment: false
- id: fhlmc-9401.2-4
  canonical_id: fhlmc-9401.2-4
  section: Freddie Mac Guide 9401.2
  description: '9401.2 Managing bankruptcy filings and delinquency: 401-9 The Servicer must instruct counsel to
    file a motion for relief from the automatic stay: ■ In a Chapter 7 case: ❑ If the Borrower is at least 60 days
    delinquent in his or her Mortgage payments at the time of filing, at the same time the Servicer refers the case
    to counsel ❑ …'
  type: do
  tags:
  - regulator-direct
  - gap-fill
  - fhlmc-guide
  - section-complete
  primary_source:
    tier: 1
    authority: Freddie Mac Single-Family Seller/Servicer Guide §9401.2 — Managing bankruptcy filings and delinquency
      (09/10/25)
    source_class: gse-guide
    source_url: https://guide.freddiemac.com/
    snapshot_id: 5869ee9e606cd4ae
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:9a1b23e5024bb369e7a59d36b3702383c11ace68b5d209fdef791bc8f955c637
    paragraph_quote: '401-9 The Servicer must instruct counsel to file a motion for relief from the automatic stay:
      ■ In a Chapter 7 case: ❑ If the Borrower is at least 60 days delinquent in his or her Mortgage payments at
      the time of filing, at the same time the Servicer refers the case to counsel ❑ If the Borrower is less than
      60 days delinquent in his or her Mortgage payments at the time of filing, no later than the 60th day of Delinquency
      ■ In a Chapter 11, 12, or 13 case, upon determining the Borrower became 60 days delinquent in his or her post-petition
      and/or plan payments to either the Servicer or the trustee but no later than the 75th day of Delinquency (d)
      Managing Mortgages that become delinquent subsequent to bankruptcy filing If the Borrower was current at the
      time of filing bankruptcy and subsequently becomes at least 30 days delinquent in payments to either the Servicer
      or the trustee, then the Servicer must refer the case to counsel. Freddie Mac will reimburse the Servicer
      for expenses the Servicer incurs in accordance with Section 9401.4 and Chapter 9701. The Servicer must instruct
      counsel to file for relief from the automatic stay: 1. In a Chapter 7 bankruptcy case, no later than the 60th
      day of Delinquency 2. In a Chapter 12 or 13 bankruptcy case, upon determining the Borrower became 60 days
      delinquent in his or her post-petition and/or plan payments to either the Servicer or the trustee but no later
      than the 75th day of Delinquency For Chapter 11 bankruptcy cases already referred to counsel pursuant to Section
      9401.2(c)(i), the Servicer must instruct counsel to file for relief from the automatic stay upon determining
      the Borrower became 60 days delinquent in his or her post-petition and/or plan payments to either the Servicer
      or the trustee but no later than the 75th day of Delinquency. (e) Bankruptcy cramdowns When a Borrower files
      bankruptcy and the value of the property has declined to a value less than the amount owed on the Mortgage,
      a federal bankruptcy judge may, in some instances, order a division of the bankruptcy claim. Under this process,
      the court divides the Mortgage debt into two claims: a secured claim in the amount of the current appraised
      value of the property and an unsecured claim for the remaining balance of the debt. All or a portion of the
      remaining unsecured claim balance is forgiven upon completion of the court-ordered repayment plan. This is
      known as a bankruptcy cramdown. Bankruptcy'
    drafter_attestation: Verbatim from Freddie Guide §9401.2 body (max-gap occurrence), snapshot 5869ee9e606cd4ae;
      substring-verified.
  judgment: false
- id: fhlmc-9401.2-5
  canonical_id: fhlmc-9401.2-5
  section: Freddie Mac Guide 9401.2
  description: '9401.2 Managing bankruptcy filings and delinquency: 401-10 cramdowns are not permitted on Mortgages
    secured by the Primary Residence of a Borrower who has filed a Chapter 13 bankruptcy. (i) Notifying Freddie
    Mac of a proposed bankruptcy cramdown If the Servicer receives a proposed reorganization plan that includes
    a bankruptcy cra…'
  type: do
  tags:
  - regulator-direct
  - gap-fill
  - fhlmc-guide
  - section-complete
  primary_source:
    tier: 1
    authority: Freddie Mac Single-Family Seller/Servicer Guide §9401.2 — Managing bankruptcy filings and delinquency
      (09/10/25)
    source_class: gse-guide
    source_url: https://guide.freddiemac.com/
    snapshot_id: 5869ee9e606cd4ae
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:9a1b23e5024bb369e7a59d36b3702383c11ace68b5d209fdef791bc8f955c637
    paragraph_quote: 401-10 cramdowns are not permitted on Mortgages secured by the Primary Residence of a Borrower
      who has filed a Chapter 13 bankruptcy. (i) Notifying Freddie Mac of a proposed bankruptcy cramdown If the
      Servicer receives a proposed reorganization plan that includes a bankruptcy cramdown, the Servicer must advise
      its counsel to file an objection to the reorganization plan. In doing so, the Servicer must direct its counsel
      to assert that the proposed plan may not modify the original Security Instrument and Note by means of a bankruptcy
      cramdown. Additionally, the Servicer must complete and send a copy of Form 1155, Bankruptcy Cramdown Pre-Confirmation
      Proposal of Settlement Terms, to notify Freddie Mac (see Directory 5) of the proposed plan within one Business
      Day of receiving the plan. Freddie Mac will review the submitted Form 1155 and make a decision to approve
      or make a counteroffer to the terms of the proposed plan. In some instances, Freddie Mac may request additional
      information in its review. The Servicer must ensure that all terms of the proposed plan are updated and correctly
      stated on each amendment, if applicable. If a proposed reorganization plan includes a bankruptcy cramdown
      that is not in compliance with Freddie Mac workout options in Chapter 9204, the Servicer must object, and
      Freddie Mac will not agree to the terms of the reorganization plan. If the Servicer agrees to a reorganization
      plan without Freddie Mac’s written approval, Freddie Mac reserves the right to exercise any remedies provided
      by the Guide and the other Purchase Documents. Refer to Chapter 3602 regarding repurchases, repurchase alternatives
      and other remedies. (ii) Notifying Freddie Mac of a confirmed bankruptcy cramdown If a reorganization plan
      that includes a bankruptcy cramdown has been confirmed, the Servicer must notify Freddie Mac of the confirmed
      plan within one Business Day of receiving the plan. In doing so, the Servicer must transmit the final terms
      of the confirmed bankruptcy cramdown (a “bankruptcy cramdown modification”) to Freddie Mac via the custom
      modification screen in Resolve® as follows. (A) Entering the data into Resolve By completing and submitting
      the custom modification template in Resolve and submitting the bankruptcy cramdown modification for settlement,
      the Servicer represents and warrants to Freddie Mac that it has completed the data entry in accordance with
      the instructions set forth in Resolve Online Help and that all information set forth in the custom modification
      template is accurate and in accordance with the terms of the confirmed plan. In submitting the bankruptcy
    drafter_attestation: Verbatim from Freddie Guide §9401.2 body (max-gap occurrence), snapshot 5869ee9e606cd4ae;
      substring-verified.
  judgment: false
- id: fhlmc-9401.2-6
  canonical_id: fhlmc-9401.2-6
  section: Freddie Mac Guide 9401.2
  description: '9401.2 Managing bankruptcy filings and delinquency: 401-11 cramdown modification via the custom
    modification template, the Servicer represents and warrants, among other things, that: ❑ The data entered on
    the custom modification template matches the final terms of the confirmed bankruptcy cramdown ❑ The property
    value is either th…'
  type: do
  tags:
  - regulator-direct
  - gap-fill
  - fhlmc-guide
  - section-complete
  primary_source:
    tier: 1
    authority: Freddie Mac Single-Family Seller/Servicer Guide §9401.2 — Managing bankruptcy filings and delinquency
      (09/10/25)
    source_class: gse-guide
    source_url: https://guide.freddiemac.com/
    snapshot_id: 5869ee9e606cd4ae
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:9a1b23e5024bb369e7a59d36b3702383c11ace68b5d209fdef791bc8f955c637
    paragraph_quote: '401-11 cramdown modification via the custom modification template, the Servicer represents
      and warrants, among other things, that: ❑ The data entered on the custom modification template matches the
      final terms of the confirmed bankruptcy cramdown ❑ The property value is either the BPO or appraisal, depending
      on what was required by the court (B) Modification pending update report and modification status Once the
      data entered in the custom modification template has been submitted to Freddie Mac, Servicers should monitor
      the Modification Pending Update report, accessible via the “Modifications” tile of the Servicer’s Servicer
      Performance Profile (SPP) (see Exhibit 88). All Mortgages that are scheduled to be processed in Freddie Mac’s
      systems will appear on this report in the SPP. In addition, Freddie Mac will notify Servicers that the bankruptcy
      cramdown modification has been processed in Freddie Mac’s systems via the Modification Status Overview report
      in the SPP. If a Servicer attempts to report a monthly loan- level transaction on a Mortgage based on the
      modified terms prior to the bankruptcy cramdown modification being processed in Freddie Mac’s systems, the
      Servicer will not be able to successfully complete the transaction. (iii) Other requirements The Servicer
      must ensure that proper EDR requirements are followed in accordance with Section 9401.2(b). Upon determining
      the Borrower became 60 days delinquent in his or her payments under a confirmed reorganization plan that includes
      a bankruptcy cramdown but no later than the 75th day of Delinquency, the Servicer must instruct counsel to
      file for relief from the automatic stay. (See Sections 9401.2(c) and 9401.2(d), as applicable, regarding filing
      for relief from the automatic stay.) For any other default under the terms of a confirmed reorganization plan
      that includes a bankruptcy cramdown, the Servicer must notify Freddie Mac (see Directory 5) within one Business
      Day of such default and indicate the type of default and include the Servicer’s recommendation as to how to
      proceed.'
    drafter_attestation: Verbatim from Freddie Guide §9401.2 body (max-gap occurrence), snapshot 5869ee9e606cd4ae;
      substring-verified.
  judgment: false
- id: fhlmc-9401.2-7
  canonical_id: fhlmc-9401.2-7
  section: Freddie Mac Guide 9401.2
  description: '9401.2 Managing bankruptcy filings and delinquency: Servicing bankruptcy counsel and other Servicing
    requirements (09/10/25) This section contains requirements related to: ■ Servicing bankruptcies on Mortgages
    secured by income-producing properties'
  type: do
  tags:
  - regulator-direct
  - gap-fill
  - fhlmc-guide
  - section-complete
  primary_source:
    tier: 1
    authority: Freddie Mac Single-Family Seller/Servicer Guide §9401.2 — Managing bankruptcy filings and delinquency
      (09/10/25)
    source_class: gse-guide
    source_url: https://guide.freddiemac.com/
    snapshot_id: 5869ee9e606cd4ae
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:9a1b23e5024bb369e7a59d36b3702383c11ace68b5d209fdef791bc8f955c637
    paragraph_quote: 'Servicing bankruptcy counsel and other Servicing requirements (09/10/25) This section contains
      requirements related to: ■ Servicing bankruptcies on Mortgages secured by income-producing properties'
    drafter_attestation: Verbatim from Freddie Guide §9401.2 body (max-gap occurrence), snapshot 5869ee9e606cd4ae;
      substring-verified.
  judgment: false
- id: fhlmc-9401.2-8
  canonical_id: fhlmc-9401.2-8
  section: Freddie Mac Guide 9401.2
  description: '9401.2 Managing bankruptcy filings and delinquency: 401-12 ■ Selecting bankruptcy counsel, bankruptcy
    referrals and the Servicer’s responsibility to work with bankruptcy counsel (a) Servicing bankruptcies on Mortgages
    secured by income-producing properties If a Borrower on a Mortgage secured by income-producing property files
    a ba…'
  type: do
  tags:
  - regulator-direct
  - gap-fill
  - fhlmc-guide
  - section-complete
  primary_source:
    tier: 1
    authority: Freddie Mac Single-Family Seller/Servicer Guide §9401.2 — Managing bankruptcy filings and delinquency
      (09/10/25)
    source_class: gse-guide
    source_url: https://guide.freddiemac.com/
    snapshot_id: 5869ee9e606cd4ae
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:9a1b23e5024bb369e7a59d36b3702383c11ace68b5d209fdef791bc8f955c637
    paragraph_quote: '401-12 ■ Selecting bankruptcy counsel, bankruptcy referrals and the Servicer’s responsibility
      to work with bankruptcy counsel (a) Servicing bankruptcies on Mortgages secured by income-producing properties
      If a Borrower on a Mortgage secured by income-producing property files a bankruptcy petition and Freddie Mac
      has an assignment of rents, the Servicer must take action to prohibit the Borrower from using any income from
      the property for any purpose other than making payments on the Mortgage by instructing counsel to: ■ File
      a motion for sequestration of rental income, or ■ Obtain an adequate protection order (b) Selecting bankruptcy
      counsel, bankruptcy referrals and the Servicer’s responsibility to work with bankruptcy counsel (i) Selecting
      bankruptcy counsel For requirements applicable to Freddie Mac Default Legal Matters, which include bankruptcy
      matters, refer to Chapter 9501. (ii) Bankruptcy referrals If the Borrower is referred to foreclosure after
      the bankruptcy referral, the Servicer is not required to refer the foreclosure to the same law firm that handled
      the bankruptcy matter. However, the Servicer should give preference to the law firm that handled the bankruptcy
      matter if the Servicer determines it is in Freddie Mac’s best interest. If the Borrower is in foreclosure
      at the time of the bankruptcy referral or files a bankruptcy petition after the foreclosure sale (see Section
      9401.2(c) regarding managing bankruptcy filings after a foreclosure sale), the Servicer is not required to
      refer the bankruptcy case to the same law firm handling the foreclosure. However, the Servicer should give
      preference to the law firm handling the foreclosure if the Servicer determines it is in Freddie Mac’s best
      interest. If the Servicer does not refer the bankruptcy case to the law firm handling the foreclosure, then
      the Servicer must ensure that it periodically updates the foreclosure counsel regarding the status of the
      bankruptcy matter. Once the bankruptcy matter is resolved, the Servicer is responsible for transitioning the
      foreclosure back to the law firm handling the foreclosure for any further required proceedings immediately
      upon release of bankruptcy but no later than one Business Day after the resolution of the bankruptcy matter.
      When referring a bankruptcy case to counsel, the Servicer must provide all documentation and/or information
      required to handle the bankruptcy matter and work'
    drafter_attestation: Verbatim from Freddie Guide §9401.2 body (max-gap occurrence), snapshot 5869ee9e606cd4ae;
      substring-verified.
  judgment: false
- id: fhlmc-9401.2-9
  canonical_id: fhlmc-9401.2-9
  section: Freddie Mac Guide 9401.2
  description: '9401.2 Managing bankruptcy filings and delinquency: 401-13 with the bankruptcy attorney to facilitate
    either timely reinstatement or relief from the automatic stay. (iii)Servicer’s responsibility to work with bankruptcy
    counsel When the Servicer refers a bankruptcy case to counsel, the Servicer must provide complete written reinst…'
  type: do
  tags:
  - regulator-direct
  - gap-fill
  - fhlmc-guide
  - section-complete
  primary_source:
    tier: 1
    authority: Freddie Mac Single-Family Seller/Servicer Guide §9401.2 — Managing bankruptcy filings and delinquency
      (09/10/25)
    source_class: gse-guide
    source_url: https://guide.freddiemac.com/
    snapshot_id: 5869ee9e606cd4ae
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:9a1b23e5024bb369e7a59d36b3702383c11ace68b5d209fdef791bc8f955c637
    paragraph_quote: '401-13 with the bankruptcy attorney to facilitate either timely reinstatement or relief from
      the automatic stay. (iii)Servicer’s responsibility to work with bankruptcy counsel When the Servicer refers
      a bankruptcy case to counsel, the Servicer must provide complete written reinstatement or payoff figures to
      the attorney, trustee, workout specialist or outsourcing vendor, as applicable, at the time of referral unless
      the Borrower is in foreclosure at the time of the bankruptcy referral and the Servicer refers the bankruptcy
      case to the law firm handling the foreclosure. Also, the Servicer must respond to any additional requests
      for reinstatement and/or payoff figures after referral within two Business Days of the date on which the Servicer
      receives a written request. The Servicer may provide the written reinstatement or payoff figures via a paper
      document, facsimile or e-mail. If the bankruptcy counsel requests any additional information and/or documentation
      at any time, the Servicer must provide such requested information and/or documents within three Business Days
      after receipt of the request or such earlier time frame if necessary to comply with timing requirements under
      applicable law or court orders and procedures. A Servicer must maintain communication with the bankruptcy
      attorney so that the Servicer can manage the bankruptcy case effectively. No less than one time per month,
      the Servicer must require the bankruptcy attorney to report the status of the case, request any documentation
      needed from the Servicer and report any relevant information to the Servicer. The Servicer must maintain this
      information in the Mortgage file or on its Mortgage system. 9401.4 Reimbursement of expenses related to a
      bankruptcy (09/10/25) This section contains requirements related to: ■ Attorney fees and cost recovery in
      bankruptcy ■ Reimbursement and pre-approval by Freddie Mac ■ Conditions for non-reimbursement of attorney
      fees (a) Attorney fees and cost recovery in bankruptcy When legally permissible, the Servicer must attempt
      to obtain payment of the attorney fees and costs resulting from the bankruptcy proceedings directly from the
      Borrower and/or the bankruptcy court.'
    drafter_attestation: Verbatim from Freddie Guide §9401.2 body (max-gap occurrence), snapshot 5869ee9e606cd4ae;
      substring-verified.
  judgment: false
