Product: Mortgage

Detailed Account of the Issue Upon learning that the servicing of my mortgage had been transferred to a new company, I promptly reached out to them for clarification. Despite this proactive step, the new mortgage company sent a demand for payment, even though I am currently in the midst of a XXXX  XXXX bankruptcy proceeding. This demand for payment may violate federal bankruptcy protections, as such actions could constitute an attempt to collect a debt during an automatic stay. 

Further complicating matters, the mortgage in question had already been modified prior to the servicing transfer. The trial payments for the modification were all made on time, and the prior servicer sent the finalized modification paperwork via FedEx. The documents were signed and returned as required, and the agreement was considered complete. Despite this, the new mortgage servicer issued a demand for the pre-modification balance, disregarding the agreed-upon terms of the modification. 

Adding to the gravity of the situation, the demand for payment was sent to the property address, which has never been the designated mailing address. This act resulted in the dissemination of private and non-public personal information ( NPI ) to an unauthorized address, potentially constituting a violation of my privacy rights and the Fair Credit Reporting Act ( FCRA ). 

Potential Legal Violations and Relevant Federal Statutes Below are the potential legal issues and the corresponding statutes that could be cited. It is important to note that these interpretations are offered with caution, and legal counsel should be consulted for definitive advice. 

1. Violation of Automatic Stay under Bankruptcy Law Statute : 11 U.S.C. 362 ( a ) Explanation : During a XXXX  XXXX bankruptcy, an automatic stay is in place, prohibiting creditors from attempting to collect on debts without permission from the bankruptcy court. Sending a demand for payment under these circumstances may be considered a violation of the automatic stay provisions.

2. Failure to Honor Terms of Mortgage Modification Potential Issue : Breach of contract Explanation : If the mortgage modification was legally executed and finalized, issuing a demand for the pre-modification balance could be construed as a breach of contract. This may not directly involve a federal statute but could raise concerns under state contract law.

3. Violation of the Fair Credit Reporting Act ( FCRA ) Statute : 15 U.S.C. 1681b ( f ) Explanation : Under the FCRA, entities are required to safeguard non-public personal information ( NPI ). By sending sensitive financial information to an incorrect and unauthorized address, the new servicer may have violated these provisions, potentially exposing personal data to unauthorized parties.

4. Breach of Privacy and Non-Public Personal Information Protections Statute : Gramm-Leach-Bliley Act ( GLBA ), 15 U.S.C. 6801 ( b ) Explanation : Financial institutions are obligated to protect the confidentiality of customer information. Disclosing private details to an unauthorized address could represent a failure to uphold these obligations, potentially violating the GLBA.

5. Unfair or Deceptive Acts or Practices ( UDAP ) Statute : 15 U.S.C. 45 ( Federal Trade Commission Act ) Explanation : If the demand for payment is deemed misleading or deceptive, it may fall under the scope of UDAP provisions, which prohibit unfair or deceptive practices in commerce.