Servicing Guide

Published September 18, 2018

E-2.1-10: Dealing with Delays in the Bankruptcy Process (11/12/2014)

The bankruptcy timelines in this chapter represent expected time frames within which Fannie Mae expects a routine bankruptcy proceeding to be concluded, given the applicable legal requirements. Fannie Mae recognizes there are a variety of issues that may cause delays in completing bankruptcy cases.

Examples of potential delays in the bankruptcy process include:

  • the borrower performing in accordance with an adequate protection order or stipulation,

  • a bankruptcy trustee attempting to sell the property securing the mortgage loan, or

  • jurisdictional constraints being present.

The servicer must ensure all pre-petition and post-petition payments are properly applied and monitored in accordance with all applicable laws and as described in Processing Pre-Petition and Post-Petition Payments in E-2.2-04, Managing Chapter 13 Bankruptcies. The servicer is responsible and accountable for any and all timeline delays attributable to the law firm.