“Dual tracking” is when a mortgage lender is foreclosing on your home while also negotiating a loan modification. Depending on what happens, and when it happens, this can be illegal. The lender cannot start foreclosure if you are in the loan modification process. They cannot continue a foreclosure during the loan modification if they started foreclosure before you started the loan modification process and you have a loan modification pending.
If you’re in this situation, you need to have a bankruptcy attorney on standby as insurance in case the loan modification is denied, especially if you have considerable equity in your home. You don’t want to wait for an emergency to find someone you can trust to back you up.
Dual tracking used to be relatively common, but was made illegal by the Consumer Financial Protection Bureau beginning in 2014. The practice gained popularity during the most recent mortgage crisis. Typically, mortgage brokers would advance the foreclosure process while still telling a homeowner they were in pursuit of a loan modification. Whichever finished first would be the one the homeowner would get, which was most often a foreclosure. This led to a number of shocked and suddenly homeless people who believed they had a loan modification coming that could save their home.
Signs of Dual Tracking
Dual tracking benefits mortgage lenders because it allows them to be sure they will receive some of their capital back from a delinquent borrower. Today, this practice is prohibited outright in the state of California, who have passed a Homeowner Bill of Rights.
However, this still happens periodically and it’s important to know the signs and be able to seek assistance if you feel as though you are being treated unlawfully by your lender. The first sign is you have received a notice of foreclosure either before you have been given a decision on a loan modification or not long after. By California law, you are required to be given a certain period of time in which you may legally file an appeal after a rejected modification, and your lender is forbidden from even starting the foreclosure process during this time.
Protecting Your Home from Dual Tracking & Foreclosure
Whether you are a victim of dual tracking or not, if you are facing foreclosure, you should contact a Long Beach bankruptcy attorney as soon as possible. An experienced professional can examine the timeline of events for any irregularities, and utilize their knowledge of bankruptcy and mortgage law to determine if your lender acted unethically. Proving this may help you save your home from foreclosure, and help you prevent a foreclosure from damaging your credit history.
Attorney Steven Lever opened LeverLaw in 1995, and has dedicated his practice to protecting consumers and helping people regain their financial independence. Whether you need assistance with a bankruptcy issue, or think you may have been a victim of dual tracking, do not hesitate to contact us and review your legal options.
For a free consultation, call LeverLaw today at 562-548-7111 and let us help you protect your home!