Mortgage Servicing Bankruptcy Coupon Books 3 – For borrowers in chapter 12 or chapter 13 bankruptcy, does the coupon book itself need to contain the disclosure statement that is required if …more than 45 days delinquent on post-petition payments?

Compliance > Regulation X and Z - Servicing
Q:   For borrowers in chapter 12 or chapter 13 bankruptcy, does the coupon book itself need to contain the disclosure statement that is required if the borrower is more than 45 days delinquent on post-petition payments?
 
A:   (UPDATED 3/20/2018): Yes, but only if the borrower is 45 days delinquent on post-petition payments when the servicer is providing a new coupon book to the borrower. Regulation Z, § 1026.41(f)(5) requires that a coupon book provided under § 1026.41(e)(3) must include, among other things, the disclosure described in § 1026.41(f)(3)(vi)(E). That provision requires that, if a borrower is more than 45 days delinquent on post-petition payments, the servicer must provide a statement that the servicer has not received all the payments that became due since the consumer filed for bankruptcy.
 
The servicer may include these disclosures anywhere in the coupon book provided to the borrower or on a separate page enclosed with the coupon book.
 
For general information about the modifications to the coupon book when a borrower is in bankruptcy, see section 5.10 of the Mortgage Servicing Small Entity Compliance Guide and Regulation Z, § 1026.41(f).
 
 
This Q&A was contained in the CFPB’s Mortgage Servicing FAQs – version 3, as of June 2, 2021 (which may be updated from time to time).  This may be found on the CFPB’s website here:  https://files.consumerfinance.gov/f/documents/cfpb_mortgage-servicing_frequently-asked-questions.pdf
 

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