Borrowers in Bankruptcy: Billing Statements and Beyond

With the 2016 Final Rule, the Bureau imposed new requirements on servicers with respect on loans impacted by a bankruptcy case. The 2016 Final Rule will, subject to limited exemptions, require servicers to provide:

1. Written notice to borrowers in bankruptcy who have become delinquent on their mortgage loan, of loss mitigation options and available credit counseling; and

2. Modified periodic statements to borrowers whose loans have been impacted by a bankruptcy.

While these requirements facially appear to be straight-forward, certain challenges become evident when attempting to implement them. Key considerations with respect to implementation are set forth below.

The complete article first appeared in the January/February Issue of the ABA Bank Compliance magazine.