Private Lenders: Are You Breaking the Law by Not Sending Loan Statements?

No monthly rule—just a gray area that could trigger a violation

What exactly counts as a “periodic account statement”—and which transactions require one?

With over 23 years of experience in real estate litigation and foreclosure, recent questions from private lenders reflect new uncertainty: whether the new California Civil Code § 2924.13 statute implies that periodic loan statements were legally required all along.

The last unlawful practice listed in California Civil Code § 2924.13 states:

“The mortgage servicer failed to provide a periodic account statement to the borrower when required to provide that statement by law, including, but not limited to, the federal Truth in Lending Act (TILA), and investor or guarantor requirements.”

The statute does not say “monthly statement”—it says periodic account statement. That is a defined legal term. Under Regulation Z, found in TILA Sections 1026.7 and 1026.41, the term applies only to consumer loans.

For business purpose loans, TILA does not apply. No statute has been identified that requires private money lenders to send periodic account statements on business- purpose loans secured by real estate.

Further, no violation exists unless both the law and an investor or guarantor requirement mandate the delivery of a periodic account statement. If one is missing, Section 2924.13(b)(6) does not apply.

Still, reviewing loan documents for any language about account statements remains a sound practice. Sending an annual or semi-annual loan update may help avoid misunderstandings.

Follow for more breakdowns of the remaining sections in this new statute.