Mortgage Statement During Bankruptcy

Bankruptcy and mortgage

Can I Get My Mortgage Statement During The Bankruptcy?

A mortgage statement during bankruptcy?  We laughed at that question for years since debtors almost never get any help with their mortgage information after they file for bankruptcy.  But finally the times are a changing – for the good of everyone – debtors and lenders.  Some new mortgage servicing rules that just went into effect now require mortgage servicers to provide periodic statements to borrowers with bankruptcy protection subject to a few exemptions (outlined below). In the past most mortgage servicers generally withheld mortgage statement during bankruptcy  since statements to borrowers with bankruptcy protection since it was determined that periodic statements and similar communications have been found by courts to violate the protections afforded to consumers who are in active bankruptcy or have discharged their liability through bankruptcy.

Mortgage servicers must now send monthly statements to borrowers in bankruptcy under a new CFPB rule that became effective on April 19, 2018. The prior version of the rule allowed mortgage servicers to send no statements to consumers who had discharged their personal liability in bankruptcy or who had a pending bankruptcy case.

The rule now requires a monthly statement unless:

1. The consumer requests the servicer stop sending statements;
2 The consumer’s Chapter 13 bankruptcy plan provides for surrender, avoidance of the lien, or doesn’t provide for ongoing payments;
3. A court order avoids the mortgage lien;
4. A Chapter 7 Bankruptcy statement of intentions indicates the property to be surrendered and no payment has been made since bankruptcy was filed,

The other great feature is that if an exemption to the rules applies, the debtor can “opt-in” to receiving monthly statements by making a written request.  So if you are in bankruptcy you should be able to get the information about your loan status but with most things related to the mortgage industry it will take some time for the system to get up and running.  A Mortgage Statement During Bankruptcy? At least there is some movement on this problem area and here at the Utah Bankruptcy Guy we are happy to see these changes and think it will be a great benefit to our clients and anyone in bankruptcy.

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