source:
  type: guide
  id: fnma-svc-e-2.2-02
  authority: Fannie Mae Servicing Guide E-2.2-02 — Managing Chapter 11 Bankruptcies
  description: Fannie Mae Servicing Guide E-2.2-02 — Managing Chapter 11 Bankruptcies.
  coverage_tier: operative
obligations:
- id: fnma-svc-e-2.2-02-full
  canonical_id: fnma-svc-e-2.2-02-full
  section: Fannie Mae Servicing Guide E-2.2-02 — Managing Chapter 11 Bankruptcies
  type: do
  tags:
  - regulator-direct
  - fnma
  - servicing-guide
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: Fannie Mae Servicing Guide E-2.2-02 — Managing Chapter 11 Bankruptcies
    source_class: fnma-guide
    source_url: https://singlefamily.fanniemae.com/media/document/pdf/servicing-guide
    snapshot_id: cf63a82bbb4adfba
    fetched_at: '2026-05-22T23:53:19Z'
    content_hash: sha256:89df66c43baad07f8a8dd9d224492fff7d15e8839edba02ad0e74c7e50fe5da3
    paragraph_quote: 'E-2.2-02, Managing Chapter 11 Bankruptcies (05/10/2023) Introduction
      This topic contains the following: General Servicer Responsibilities Managing
      Chapter 11 Bankruptcies That Involve Delinquent Mortgage Loans Servicing the
      Mortgage Loan After Conﬁrmation of a Chapter 11 Plan General Servicer Responsibilities
      When servicing a mortgage loan involved in a Chapter 11 bankruptcy, the servicer
      must complete the actions described in the following table. ✓ The servicer must…
      Refer a Chapter 11 case to a law ﬁrm within two weeks of the ﬁling of the bankruptcy
      case and direct the attorney to ﬁle a Notice of Appearance. Have the law ﬁrm
      review the proposed reorganization plan and the disclosure statement. Ensure
      the law ﬁrm actively participates in the plan conﬁrmation process and ﬁles an
      objection to any plan that attempts to modify Fannie Mae’s rights under the
      security instruments, or that is not otherwise in Fannie Mae’s best interest.
      The servicer must immediately report this as non-routine litigation to Fannie
      Mae’s Legal department by submitting a Non-Routine Litigation Form (Form 20).
      In cases in which the borrower will not receive a discharge Published May 13,
      2026 425 upon conﬁrmation of the reorganization plan, the servicer must instruct
      the law ﬁrm to attempt to negotiate termination of the automatic stay upon conﬁrmation
      of the plan. See also E-2.3-03, Handling Cramdowns of the Mortgage Debt . Managing
      Chapter 11 Bankruptcies That Involve Delinquent Mortgage Loans In all cases
      in which the borrower is contractually delinquent, the servicer must discuss
      with the law ﬁrm whether it is practical to ﬁle a Motion for Relief, a Motion
      for Adequate Protection Payments, and/or a Motion for Sequestration of Rental
      Income (if the property is being rented). The following table provides the servicer
      with additional directions for the proper management and servicing of a Chapter
      11 bankruptcy that involves a delinquent mortgage loan. If… Then the servicer
      must… there is proof that the borrower has no equity in the security property
      and the property is not necessary for the borrower’s reorganization direct the
      law ﬁrm to request relief from the automatic stay. the mortgage loan is released
      from bankruptcy without an Order of Conﬁrmation being issued • examine the possibility
      of arranging a workout option, • immediately send any required breach letter
      to the borrower, and • refer the mortgage loan to a law ﬁrm to initiate or resume
      foreclosure proceedings. Servicing the Mortgage Loan After Conﬁrmation of a
      Chapter 11 Plan When a Chapter 11 reorganization plan that modiﬁes the original
      terms of a mortgage loan is conﬁrmed, the servicer must report the modiﬁed terms
      (or cramdown) to Fannie Mae. The following table provides Fannie Mae’s requirements
      for reporting and servicing the mortgage loan post-conﬁrmation. ✓ The servicer
      must… Send either the mortgage loan modiﬁcation documents or a copy of the reorganization
      plan that detail the modiﬁed terms of the mortgage loan to a document custodian,
      as applicable. Report the mortgage loan modiﬁcation in the next delinquency
      status information it transmits to Fannie Mae after the Order of Conﬁrmation
      is entered. For a list of delinquency status codes, see Delinquency Status Code
      Hierarchy and Deﬁnitions in F-1-21, Reporting a Delinquent Mortgage Loan via
      Fannie Mae’s Servicing Solutions System. Published May 13, 2026 426 ✓ The servicer
      must… Report the terms of the mortgage loan modiﬁcation through Fannie Mae''s
      servicing solutions system. Work with its Fannie Mae Investor Reporting Representative
      (see F-4-02, List of Contacts) to make appropriate changes to Fannie Mae’s investor
      reporting system records. Remit payments for the secured portion of the debt
      as regular remittances. Notify Fannie Mae''s SF CPM division (see F-4-02, List
      of Contacts) when it receives any funds for the unsecured portion of the debt
      and remit as regular remittances. With respect to special servicing option MBS
      mortgage loans, no changes are to be made to the terms of the mortgage loan
      in Fannie Mae''s records until after Fannie Mae reclassiﬁes the mortgage loan
      as a portfolio mortgage loan. See Removing Regular Servicing Option MBS Mortgage
      Loans Upon Conﬁrmation of a Bankruptcy Plan and Reclassifying Special Servicing
      Option MBS Mortgage Loans Upon Conﬁrmation of a Bankruptcy Plan in E-2.1-11,
      Remitting P&I for MBS Mortgage Loans That Are Part of a Bankruptcy for requirements
      related to reclassiﬁcation or removal of MBS mortgage loans. See also Processing
      Pre-Petition and Post-Petition Payments in E-2.2-04, Managing Chapter 13 Bankruptcies
      and C-3-01, Responsibilities Related to Remitting P&I Funds to Fannie Mae for
      more information on actions required when a mortgage loan becomes delinquent.
      In cases in which the automatic stay remains in eﬀect following conﬁrmation,
      if the borrower becomes 60 days delinquent in making the payments required under
      the plan, the servicer must either refer the case to a law ﬁrm within two weeks
      of the 60th day of delinquency or, if the case has already been referred, advise
      the law ﬁrm to seek relief from the automatic stay or a dismissal of the case
      in accordance with local bankruptcy rules and practices. The servicer is responsible
      for ensuring that all previous payments have been properly applied and for verifying
      that the borrower is 60 days delinquent before sending the referral. Once the
      automatic stay is terminated or the case is dismissed, the servicer must immediately
      complete all the actions described in the following table. ✓ The servicer must…
      Send any required breach letter to the borrower. Refer the mortgage loan to
      a law ﬁrm to initiate or resume foreclosure. Consider the possibility of arranging
      a workout option. Recent Related Announcements The table below provides references
      to recently issued Announcements that are related to this topic. Published May
      13, 2026 427 Announcements Issue Date Announcement SVC-2023-03 May 10, 2023
      Announcement SVC-2022-07 October 12, 2022 Announcement SVC-2019-03 May 15, 2019'
  judgment: false
