Q: How does a servicer comply with the new bankruptcy periodic statement rules under Regulation Z, § 1026.41(e)(5) and (f) if a borrower became a debtor in bankruptcy prior to April 19, 2018, and a statement is required starting on or after April 19, 2018?
A: (UPDATED 3/20/2018): The servicer must send modified periodic statements as required under Regulation Z, § 1026.41(f) on or after April 19, 2018 unless, as of April 19, 2018, any exemption applies. Section 1026.41(e)(5) includes new provisions that exempt a servicer from providing a statement to a borrower in bankruptcy. These new requirements and exemption provisions apply to a mortgage loan as of April 19, 2018, irrespective of whether the borrower became a debtor in bankruptcy before or after April 19, 2018. Note that a servicer may begin providing periodic statements to borrowers in bankruptcy prior to April 19, 2018, but as of that date, the servicer must comply with all of the new requirements under the rule. For more information on early compliance, see the Bureau’s June 27, 2017 Policy Guidance.
For general information about the modifications to the periodic statement when a borrower is in bankruptcy, see section 5.10 of the Mortgage Servicing Small Entity Compliance Guide and Regulation Z, § 1026.41(f).