Recently, I had a conversation with an attorney whose clients are in bankruptcy. Knowing that we have an entire group devoted to servicing compliance, he wanted to know why his clients were receiving loan statements again. It made no sense to him, since there was a time when borrowers in bankruptcy stopped receiving loan statements.

Actually, withholding of loan statements stems from confusion by courts. But I’ll get to that in a moment.

The fact is that, if you’ve represented borrowers in bankruptcy, you may remember a time when they received periodic residential loan statements from their mortgage servicer, much like they did before filing for bankruptcy protection. But you might also remember a time when the delivery of these loan statements to debtors suddenly ceased, with no explanation.