Due to the foreclosure crisis that our country has faced, the federal government and numerous state governments enacted laws aimed at prohibiting the abuses that many mortgage lenders were using including harsh variable interest rates, foreclosure rescue scams, robo-signing, dual tracking and others. This blog will focus on dual tracking.

Dual tracking occurs when the mortgage servicer proceeds with its foreclosure action against the homeowner while simultaneously negotiating the homeowner’s application for a loan modification. Many homeowners were caught off-guard when the foreclosure was completed before their loan was modified and they lost their homes. Fortunately, the Consumer Financial Protection Bureau (CFPB), state laws and the National Mortgage Settlement (NMS) have taken action to protect homeowners facing this situation.

The CFPB issued a rule, which certain states passed into law, to limit mortgage servicers from proceeding with the foreclosure process while a loan modification is being negotiated. To take advantage of these laws, the homeowner must submit a complete application seeking a loan modification. The foreclosure must come to a stop until the homeowner’s application has been fully reviewed.

The CFPB’s rules also prohibit a mortgage servicer from initiating a foreclosure action until the borrower is more than 120 days past due on the mortgage payments. Additionally, a foreclosure cannot be commenced if a loss mitigation application is pending. If a completed loss mitigation application is submitted to the mortgage servicer after a foreclosure case has started, but more than 37 days before a foreclosure sale, the foreclosure action must stop until:

· The servicer informs the homeowner that he or she is not eligible for any loss mitigation option

· The homeowner has rejected the workout option offered by the servicer, or

· The homeowner accepts a workout options, but fails to comply with the terms of the agreement

If you have questions regarding dual-tracking or the foreclosure of your home, we can help. There are a number of different options available to fight back against foreclosure and it is critical to choose the right one for your circumstances. During your free consultation, attorneys Bruce Levitt and Shelley Slafkes will carefully explain all of your options so you can make an informed decision about how to best proceed. Contact us today at 973-323-2953 to schedule a free initial consultation with a compassionate and knowledgeable lawyer.