Are you getting your mortgage statements after filing bankruptcy?

Some mortgage companies use bankruptcy as an excuse to stop sending mortgage statements. (Or they send them to your lawyer, not to you.) The law is completely clear. The law says to keep sending them to you. 

That law is Regulation Z. The Consumer Finance Protection Bureau issues and enforces regulations under the Truth In Lending Act. Here’s what that regulation says.

First, the mortgage servicer has to send you a monthly statement.  That’s 12 CFR 1026.41(a)(2).  (Sometimes consumers accidentally give up a right in small print without knowing it. So the official interpretation says the consumer can’t do that. You cannot give up your right to receive monthly statements.)

Even after bankruptcy, your mortgage company should send you a monthly statement

Second, bankruptcy does not change that. That’s in 12 CFR 1026.41(f). While they need to keep sending the monthly statement, they also need to say that they know about the bankruptcy and that the statement is for information purposes.  §1026.41(f)(2)

Third, you or I can tell them to stop.  We can tell them directly, or through papers we file with the bankruptcy court. If you are not planning to pay and keep  the house, we can tell them to stop sending those bills.  §1026.41(a)(2)(B).  (Some mortgage companies want your lawyer to request that you KEEP getting your statements.  That stands the law on its head.  The Official Interpretation says your lawyer has the authority to tell them to STOP sending payments.  Your lawyer does NOT have the authority to tell them to keep sending payments. Why? Because Regulation Z says to send the statements without being asked.)

What If You Don’t Get Your Mortgage Statements After Bankruptcy

OK.  They are supposed to keep sending your mortgage statements. What if they just don’t?

Send them an email and link this page. (Copy me on the email.) We’ll see how that works.  

The Consumer Finance Protection Bureau has enforcement authority.  Complain to the CFPB here.  Especially since the 2020 election, the CFPB is good about following up. Hope that works.

But if that fails, can you and I to to court to make them follow Regulation Z? That’s at best a gray area. It looks like we don’t have your own private right to go to court if this right is violated.  

Can the bankruptcy court help?

The bankruptcy court has general power to carry out the provisions of the bankruptcy law.  11 USC 105.  So, can the bankruptcy court require the mortgage company to do what they are supposed to do, so that you can do what you are supposed to do?

Maybe. Several of us talked about this problem at the 2021 annual meeting of the National Association of Consumer Bankruptcy Attorneys.  I’m hoping they do a class on it next year.

PS Here’s the notice:

Here’s the notice to send to the mortgage servicer, if they are NOT sending you the monthly statement.

************************************************************************************************************

NOTICE TO MORTGAGE SERVICER

Mortgage servicer!  We are sending this reminder of the law to you.

Regulation Z orders you to send monthly statements to your customers, including the ones that have filed bankruptcy.  But you are NOT doing that. That’s why I’m sending you this this notice.

Please do what you are required to do. Send your customer the mortgage statements every month, like you are required to do.  You do NOT need my permission as your customer’s lawyer to send them.

You can take this as permission if you insist. But you do NOT need my permission to follow the law.  Just do it! — Robert Weed, Lawyer.