Servicing Guide

Published December 12, 2018

E-2.3-04: Bankruptcies Involving Mortgage Loans Secured by Investment Properties (11/12/2014)

The servicer must ask the law firm to confirm that the security instrument includes an assignment of rents provision when it refers a bankruptcy case that involves an investment property. If an assignment of rents provision is included, the servicer must ensure the law firm files a Motion for Sequestration of Rental Income to prohibit the borrower from using any rental income without the bankruptcy court’s permission.