Freddie Mac Single-Family Seller/Servicer Guide 9401.4 — Reimbursement of expenses related to a bankruptcy
Freddie Mac Single-Family Seller/Servicer Guide section 9401.4 — Reimbursement of expenses related to a bankruptcy. Full verbatim section text, substring-verified against snapshot 4c94f67729042dd6.
Verbatim regulatory text
Verbatim provisions from Freddie Mac Single-Family Seller/Servicer Guide 9401.4 — Reimbursement of expenses related to a bankruptcy — each quote is a verified substring of the regulator-published source snapshot, not retyped. Quoted for reference; this is not legal advice. The operational layer (P&P updates, prompts) lives in the regulation update kits.
Freddie Mac Single-Family Seller/Servicer Guide 9401.4 — Reimbursement of expenses related to a bankruptcy (part 1 of 3)
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. (b) Reimbursement and pre-approval by Freddie Mac Freddie Mac will reimburse the Servicer for expenses the Servicer incurs in accordance with the limits listed in Exhibit 57B, Approved Bankruptcy Attorney Fees, and according to the requirements contained in Chapter 9701. The Servicer must obtain Freddie Mac’s written pre-approval for any fees in excess of the fees listed in Exhibit 57B by submitting a request for pre-approval via PAID (Payments Automated Intelligent and Dynamic) (see Exhibit 88, Servicing Tools). (c) Conditions for non-reimbursement of attorney fees Freddie Mac Single-Family Seller/Service Guide Freddie Mac will not reimburse Servicers for attorney fees or legal costs on any bankruptcy case if: ■ The Borrower was current on the Mortgage at the time the Borrower filed for bankruptcy protection and has remained current and if Freddie Mac did not approve a referral to bankruptcy counsel for special circumstances ■ The Servicer incurred costs for reaffirmation agreements ■ The Servicer incorrectly reported or failed to report the bankruptcy through EDR. See Section 9401.2(b) for more details on how to report bankruptcies through EDR. ■ The firm was not eligible to receive referrals of Freddie Mac Default Legal Matters, as specified in Chapter 9501
Freddie Mac Single-Family Seller/Servicer Guide 9401.4 — Reimbursement of expenses related to a bankruptcy (part 2 of 3)
Refer to Bulletins 2026-G and 2026-11, which announced updates related to Freddie Mac’s new event-based default related reporting requirements. Beginning November 16, 2026, Servicers may implement the new requirements if they are operationally ready to do so. If a Servicer adopts the new event-based default related reporting standards before the mandatory effective date of September 27, 2027, it must comply with the associated Guide requirements that will be effective on September 27, 2027 and, upon such adoption, must discontinue monthly EDR reporting. 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. (b) Reimbursement and pre-approval by Freddie Mac Freddie Mac will reimburse the Servicer for expenses the Servicer incurs in accordance with the limits listed in Exhibit 57B, Approved Bankruptcy Attorney Fees, and according to the Freddie Mac Single-Family Seller/Service Guide requirements contained in Chapter 9701. The Servicer must obtain Freddie Mac’s written pre-approval for any fees in excess of the fees listed in Exhibit 57B by submitting a request for pre-approval via PAID (Payments Automated Intelligent and Dynamic) (see Exhibit 88, Servicing Tools). (c) Conditions for non-reimbursement of attorney fees Freddie Mac will not reimburse Servicers for attorney fees or legal costs on any bankruptcy case if: ■ The Borrower was current on the Mortgage at the time the Borrower filed for bankruptcy protection and has remained current and if Freddie Mac did not approve a referral to bankruptcy counsel for special circumstances ■ The Servicer incurred costs for reaffirmation agreements ■ The Servicer incorrectly reported or failed to report the bankruptcy through EDR. See Section 9401.2(b) for more details on how to report bankruptcies through EDR. ■ The firm was not eligible to receive referrals of Freddie Mac Default Legal Matters, as specified in Chapter 9501
Freddie Mac Single-Family Seller/Servicer Guide 9401.4 — Reimbursement of expenses related to a bankruptcy (part 3 of 3)
■ 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. (b) Reimbursement and pre-approval by Freddie Mac Freddie Mac will reimburse the Servicer for expenses the Servicer incurs in accordance with the limits listed in Exhibit 57B, Approved Bankruptcy Attorney Fees, and according to the requirements contained in Chapter 9701. The Servicer must obtain Freddie Mac’s written Freddie Mac Single-Family Seller/Service Guide pre-approval for any fees in excess of the fees listed in Exhibit 57B by submitting a request for pre-approval via PAID (Payments Automated Intelligent and Dynamic) (see Exhibit 88, Servicing Tools). (c) Conditions for non-reimbursement of attorney fees Freddie Mac will not reimburse Servicers for attorney fees or legal costs on any bankruptcy case if: ■ The Borrower was current on the Mortgage at the time the Borrower filed for bankruptcy protection and has remained current and if Freddie Mac did not approve a referral to bankruptcy counsel for special circumstances ■ The Servicer incurred costs for reaffirmation agreements ■ The Servicer incorrectly reported or failed to report the applicable bankruptcy default related reporting events. See Section 9401.2(b) for more details on how to report bankruptcy status through default related reporting events. ■ The firm was not eligible to receive referrals of Freddie Mac Default Legal Matters, as specified in Chapter 9501 Freddie Mac Single-Family Seller/Service Guide
Operationalizing Freddie Mac Single-Family Seller/Servicer Guide 9401.4 — Reimbursement of expenses related to a bankruptcy
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