If you’ve fallen behind on your mortgage payments, you may have already reached out to your lender for a loan modification, forbearance, or repayment plan to help you prevent foreclosure.
While your request is under review, lenders are legally required to stop the foreclosure process. Moving forward with foreclosure while reviewing loan modifications or other loss mitigation strategies is considered “dual tracking” and, in most cases, is illegal. But just because it’s illegal doesn’t mean it doesn’t happen.
Understanding what dual tracking is in foreclosure, and when it is illegal, can help you protect your homeowner rights and save your home. Contact us for a free phone consultation to see what the lawyers at Denbeaux & Denbeaux can do for you.
What is Dual Tracking?
Under the Real Estate Settlement Procedures Act (RESPA), lenders are legally required to stop all foreclosure activity while reviewing loss mitigation applications. If a lender starts or continues the foreclosure process while the application is under review, it is considered “dual tracking” and is prohibited by federal law.
The protections against dual tracking exist to give homeowners a fair chance to save their homes from foreclosure and to prevent abusive lending practices. While dual tracking can occur during any type of loss mitigation review, like forbearance, repayment plans, or short sales, it happens most often with loan modifications.
Some examples of what dual tracking could look like include:
- Scheduling a sheriff’s sale while your completed loan application is under review
- Moving forward with foreclosure after you’ve been approved for a trial modification plan
- Moving forward with foreclosure without notifying you that your application was incomplete or denied
Because New Jersey is a judicial foreclosure state, homeowners have additional protections. Because foreclosures must go through the court system, New Jersey homeowners can file motions and raise dual tracking concerns directly to the judge.
However, even though New Jersey law offers strong protections against dual tracking, they don’t apply in every situation.
Limits to Dual Tracking Foreclosure Protections
The dual tracking protections that stop foreclosure only apply under certain conditions. The protections that stop foreclosure through dual tracking only apply under certain circumstances. If your application is incomplete, late, or denied, your lender can legally move forward with the foreclosure process.
Below are important details to be aware of:
- Incomplete Application: If your application is missing documentation or includes outdated information, your lender is not legally required to stop foreclosure. To get dual tracking mortgage protections, your applications must be complete, which means all of the required documents are submitted and up to date.
- Late Application Submission: To qualify for protection, your completed application must be submitted at least 37 days before the scheduled sheriff’s sale. If it is filed after that deadline, your lender isn’t legally required to stop the sale.
- Denied Application: Once a loan modification is denied, foreclosure can resume unless you file a loan modification appeal. Common reasons applications get denied include having insufficient income to meet the lower modified payments, having multiple loan modifications, or not meeting other lender-specific eligibility requirements.
If your loan modification was rejected or denied, there are still options to get your application approved. An experienced foreclosure attorney can review your case to determine if there were any servicing violations or errors in how your application was handled.
Even if you need to resubmit your application, an attorney can help you gather the right documentation, address the issues that led to the initial denial, and position you for the best possible chance of approval.
If your lender continues to move forward with foreclosure despite your efforts, or if you believe your application wasn’t reviewed fairly, reach out to a foreclosure attorney immediately.
Work with a Foreclosure Defense Attorney to Save Your Home
Even though dual tracking is illegal, it happens more often than you may think. Many families don’t realize what’s happening until it’s too late, which can lead to wrongful foreclosure.
At Denbeaux Law, we help New Jersey homeowners protect their homes. We make sure your applications are prepared correctly and submitted on time to give you the best chance for approval. We also hold lenders accountable if they violate the law and explore other foreclosure alternatives that may be a better fit for your situation.
Contact us today for a free phone consultation to learn how we can help you keep your home.
