Servicing Guide

Published December 12, 2018

E-2.1-09: Identifying Workout Opportunities (11/12/2014)

The following table provides Fannie Mae requirements for the servicer when identifying workout opportunities for mortgage loans in bankruptcy.

The servicer must…

Work together with the law firm to pursue workout opportunities during all phases of the bankruptcy process. Fannie Mae reserves the right to request a report of the documented communication between the servicer and the law firm concerning workout attempts.

Have the law firm contact the borrower’s counsel to discuss the different workout options that might be suitable for the borrower, when the borrower is contractually delinquent. If the borrower is not represented by counsel, the law firm may contact the borrower directly.

Work with the law firm and the borrower’s counsel to discuss details of the various alternatives and to select the most appropriate option.

Seek approval from Fannie Mae and the bankruptcy court, as required, when a workout opportunity is identified.

The particular workout option to be utilized in a given bankruptcy case will depend upon many factors, including, but not limited to, the following:

  • the type of bankruptcy case,

  • the stage of the bankruptcy case,

  • local practices and procedures, and

  • the particular circumstances of the borrower and the property.