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Smith Welch Webb & White Blog

Wednesday, April 20, 2016

Risk of Foreclosure and Dual Tracking Mortgage Fraud

Not only is Georgia’s foreclosure rate higher than the national average, but Henry County is among the top five counties in Georgia for foreclosure rates according to Realtytrac.com.   Becoming a victim of the illegal practice dubbed “dual tracking” is an added stress for homeowners who are struggling to find an alternative to foreclosure.

 

What is “Dual Tracking”

The Consumer Financial Protection Bureau and the National Mortgage Settlement protect homeowners from getting into the foreclosure track while trying to work on an application for loan modification.  Known as “dual tracking,” mortgage servicers cannot legally start foreclosure proceedings while borrowers are actively working on a loan modification or actively seeking an alternative to foreclosure. 

 

In an effort to give borrowers enough time to apply for a loan modification before going into foreclosure, mortgage servicers should not file the first foreclosure notice until at least 120 days after the borrower defaults on payment.  The rationale behind the 120 days is to give borrowers enough time to submit a loan modification application.   In fact, if a borrower applies for a loan modification 37 days before a foreclosure auction is scheduled to take place, the mortgage servicer must consider and respond to the request.  In addition to loan modifications, fair process options include deferred payments. 

 

In addition, to make the loan modification process as easy as possible for borrowers, servicers should only require one application for any modification options available, and the borrower should be considered for all options simultaneously. 

 

Sign of Illegal Dual Tracking

The strongest indicator that a mortgage servicer is illegally pushing through the loan modification and foreclosure process at the same time is borrowers receiving a foreclosure notice shortly after receiving a denial of loan modification.  Under current laws, the foreclosure process should freeze while the borrower is working on a loan modification until the application has been fully processed. 

 

Laws protecting borrowers also include requirements for early warnings before interest rate adjustments, promptly crediting payments to your account, providing accurate documentation and quickly correcting any errors made by mortgage servicers while handling your account.  An example of a notification requirement includes servicers sending written notice within 15 days of the borrowers second missed payment. 

 

If you believe your mortgage servicer is not in compliance, contact our experienced consumer law attorneys today for a consultation. 

 

 

Any representations regarding the law in this Blog is made available for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand that there is no attorney client relationship between you and the Blog publisher. The Blog should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.


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