§ 1026.41 Periodic statements for residential mortgage loans.

  1. a.(a) In general.

    1. 1.(1) Scope.This section applies to a closed-end consumer credit transaction secured by a dwelling, unless an exemption in paragraph (e) of this section applies. A closed-end consumer credit transaction secured by a dwelling is referred to as a mortgage loan for purposes of this section.

    2. 2.(2) Periodic statements.A servicer of a transaction subject to this section shall provide the consumer, for each billing cycle, a periodic statement meeting the requirements of paragraphs (b), (c), and (d) of this section. If a mortgage loan has a billing cycle shorter than a period of 31 days (for example, a bi-weekly billing cycle), a periodic statement covering an entire month may be used. For the purposes of this section, servicer includes the creditor, assignee, or servicer, as applicable. A creditor or assignee that does not currently own the mortgage loan or the mortgage servicing rights is not subject to the requirement in this section to provide a periodic statement.

    Official Interpretation to 41(a)

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  2. b.(b) Timing of the periodic statement.The periodic statement must be delivered or placed in the mail within a reasonably prompt time after the payment due date or the end of any courtesy period provided for the previous billing cycle.

    Official Interpretation to 41(b)

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  3. c.(c) Form of the periodic statement.The servicer must make the disclosures required by this section clearly and conspicuously in writing, or electronically if the consumer agrees, and in a form that the consumer may keep. Sample forms for periodic statements are provided in appendix H-30. Proper use of these forms complies with the requirements of this paragraph (c) and the layout requirements in paragraph (d) of this section.

    Official Interpretation to 41(c)

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  4. d.(d) Content and layout of the periodic statement.The periodic statement required by this section shall include:

    1. 1.(1) Amount due.Grouped together in close proximity to each other and located at the top of the first page of the statement:

      1. i.(i) The payment due date;

      2. ii.(ii) The amount of any late payment fee, and the date on which that fee will be imposed if payment has not been received; and

      3. iii.(iii) The amount due, shown more prominently than other disclosures on the page and, if the transaction has multiple payment options, the amount due under each of the payment options.

    2. 2.(2) Explanation of amount due.The following items, grouped together in close proximity to each other and located on the first page of the statement:

      1. i.(i) The monthly payment amount, including a breakdown showing how much, if any, will be applied to principal, interest, and escrow and, if a mortgage loan has multiple payment options, a breakdown of each of the payment options along with information on whether the principal balance will increase, decrease, or stay the same for each option listed;

      2. ii.(ii) The total sum of any fees or charges imposed since the last statement; and

      3. iii.(iii) Any payment amount past due.

    3. 3.(3) Past Payment Breakdown.The following items, grouped together in close proximity to each other and located on the first page of the statement:

      1. i.(i) The total of all payments received since the last statement, including a breakdown showing the amount, if any, that was applied to principal, interest, escrow, fees and charges, and the amount, if any, sent to any suspense or unapplied funds account; and

      2. ii.(ii) The total of all payments received since the beginning of the current calendar year, including a breakdown of that total showing the amount, if any, that was applied to principal, interest, escrow, fees and charges, and the amount, if any, currently held in any suspense or unapplied funds account.

      Official Interpretation to 41(d)(3)

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    4. 4.(4) Transaction activity.A list of all the transaction activity that occurred since the last statement. For purposes of this paragraph (d)(4), transaction activity means any activity that causes a credit or debit to the amount currently due. This list must include the date of the transaction, a brief description of the transaction, and the amount of the transaction for each activity on the list.

      Official Interpretation to 41(d)(4)

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    5. 5.(5) Partial payment information.If a statement reflects a partial payment that was placed in a suspense or unapplied funds account, information explaining what must be done for the funds to be applied. The information must be on the front page of the statement or, alternatively, may be included on a separate page enclosed with the periodic statement or in a separate letter.

    6. 6.(6) Contact information.A toll-free telephone number and, if applicable, an electronic mailing address that may be used by the consumer to obtain information about the consumer's account, located on the front page of the statement.

    7. 7.(7) Account information.The following information:

      1. i.(i) The amount of the outstanding principal balance;

      2. ii.(ii) The current interest rate in effect for the mortgage loan;

      3. iii.(iii) The date after which the interest rate may next change;

      4. iv.(iv) The existence of any prepayment penalty, as defined in § 1026.32(b)(6)(i), that may be charged;

      5. v.(v) The Web site to access either the Bureau list or the HUD list of homeownership counselors and counseling organizations and the HUD toll-free telephone number to access contact information for homeownership counselors or counseling organizations; and

    8. 8.(8) Delinquency information.If the consumer is more than 45 days delinquent, the following items, grouped together in close proximity to each other and located on the first page of the statement or, alternatively, on a separate page enclosed with the periodic statement or in a separate letter:

      1. i.(i) The date on which the consumer became delinquent;

      2. ii.(ii) A notification of possible risks, such as foreclosure, and expenses, that may be incurred if the delinquency is not cured;

      3. iii.(iii) An account history showing, for the previous six months or the period since the last time the account was current, whichever is shorter, the amount remaining past due from each billing cycle or, if any such payment was fully paid, the date on which it was credited as fully paid;

      4. iv.(iv) A notice indicating any loss mitigation program to which the consumer has agreed, if applicable;

      5. v.(v) A notice of whether the servicer has made the first notice or filing required by applicable law for any judicial or non-judicial foreclosure process, if applicable;

      6. vi.(vi) The total payment amount needed to bring the account current; and

      7. vii.(vii) A reference to the homeownership counselor information disclosed pursuant to paragraph (d)(7)(v) of this section.

    Official Interpretation to 41(d)

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  5. e.(e) Exemptions.

    1. 1.(1) Reverse mortgages.Reverse mortgage transactions, as defined by § 1026.33(a), are exempt from the requirements of this section.

    2. 2.(2) Timeshare plans.Transactions secured by consumers' interests in timeshare plans, as defined by 11 U.S.C. 101(53D), are exempt from the requirements of this section.

    3. 3.(3) Coupon books.The requirements of paragraph (a) of this section do not apply to fixed-rate loans if the servicer:

      1. i.(i) Provides the consumer with a coupon book that includes on each coupon the information listed in paragraph (d)(1) of this section;

      2. ii.(ii) Provides the consumer with a coupon book that includes anywhere in the coupon book:

        1. A.(A) The account information listed in paragraph (d)(7) of this section;

        2. B.(B) The contact information for the servicer, listed in paragraph (d)(6) of this section; and

        3. C.(C) Information on how the consumer can obtain the information listed in paragraph (e)(3)(iii) of this section;

      3. iii.(iii) Makes available upon request to the consumer by telephone, in writing, in person, or electronically, if the consumer consents, the information listed in paragraph (d)(2) through (5) of this section; and

      4. iv.(iv) Provides the consumer the information listed in paragraph (d)(8) of this section in writing, for any billing cycle during which the consumer is more than 45 days delinquent.

      Official Interpretation to 41(e)(3)

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    4. 4.(4) Small servicers.

      1. i.(i) Exemption.A creditor, assignee, or servicer is exempt from the requirements of this section for mortgage loans serviced by a small servicer.

      2. ii.(ii) Small servicer defined.A small servicer is a servicer that either:

        1. A.(A) Services, together with any affiliates, 5,000 or fewer mortgage loans, for all of which the servicer (or an affiliate) is the creditor or assignee; or

        2. B.(B) Is a Housing Finance Agency, as defined in 24 CFR 266.5.

        Official Interpretation to 41(e)(4)(ii)

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      3. iii.(iii) Small servicer determination.In determining whether a servicer is a small servicer, the servicer is evaluated based on the mortgage loans serviced by the servicer and any affiliates as of January 1 for the remainder of the calendar year. A servicer that ceases to qualify as a small servicer will have six months from the time it ceases to qualify or until the next January 1, whichever is later, to comply with any requirements from which the servicer is no longer exempt as a small servicer. The following mortgage loans are not considered in determining whether a servicer qualifies as a small servicer:

        1. a.(a) Mortgage loans voluntarily serviced by the servicer for a creditor or assignee that is not an affiliate of the servicer and for which the servicer does not receive any compensation or fees.

        2. b.(b) Reverse mortgage transactions.

        3. c.(c) Mortgage loans secured by consumers’ interests in timeshare plans.

        Official Interpretation to 41(e)(4)(iii)

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    5. Consumers in bankruptcy.

      5.(5) A servicer is exempt from the requirements of this section for a mortgage loan while the consumer is a debtor in bankruptcy under Title 11 of the United States Code.

      Official Interpretation to 41(e)(5)

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