Mortgage periodic statements and successors in interest

Last week Jennifer blogged about the timing requirements for periodic statements. Today, I want to look at periodic statements for mortgage loans and what to do when a potential successor in interest reaches out to the credit union after the sole borrower’s untimely death, hopefully after a long and prosperous life and not like a Lannister soldier encountering a dragon.

Periodic Statement Exemptions. Section 1026.41(e) of Regulation Z contains a few exemptions from the general rule that periodic statements must be sent for each billing cycle of a closed-end consumer credit transaction secured by a dwelling. The periodic statement rules do not apply to reverse mortgages, timeshare plans, certain fixed-rate loans that use coupon books, and small servicers. See, 12 CFR § 1026.41(e)(1)-(4). There is also an exemption for certain borrowers in bankruptcy if any borrower is either in an active bankruptcy or a borrower’s personal liability on a loan has been discharged and one of the following also happens:

  • The borrower requests in writing that the credit union stop sending periodic statements;
  • The borrower’s bankruptcy plan calls for the surrender of the borrower’s home, avoids the credit union’s mortgage lien or fails to provide for the payment of the pre-bankruptcy arrearage or payments on the loan going forward;


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