Assume a home equity loan (closed-end) or first mortgage is maturing and the lender notifies the borrower of the amount due for the final payment. However, the borrower's final payment does not satisfy the entire amount due. The Collections Dept.continues to pursue repayment of the remaining balance post maturity. Must the lender continue to send periodic statements each month until the remaining amount is collected or until the loan is charged off and meets 1026.41(e)(6) requirements? There is no longer a billing cycle as the entire amount is due, but it's unclear to me whether the requirement to send the statements continues unless the chargeoff exception applies. Thanks.
The payoff quote was correct. The borrower either failed to pay any amount or paid only a portion of what was owed. The Collections Dept. would typically try and collect on the overdue amount. If it appears unlikely that collection will be made, the loan is charged off in the regular course of business. I can see in Reg. Z that statements are required after charge off if the lender continues to accrue interest on the unpaid amount. I'm wondering about the interim between pay off statement and charge off. Should the lender continue to send monthly statements?