Learning About Bankruptcy Proceedings

What To Do When You Catch Your Lender Dual Tracking

by Seth Beck

When you submit a loan modification request, the bank is supposed to stop foreclosure proceedings until your application has been approved or denied. Unfortunately, lenders don't always do what's right, and some will continue foreclosing on the home as a way of hedging their bets. Called dual tracking, doing this is illegal, and here's what you should do when you catch your lender in the act.

Notify Them to Stop Immediately

Both the state and the federal government have passed laws prohibiting dual tracking. Too many people have lost their homes because of this underhanded tactic, and so a number of rules have been implemented to protect homeowners from being taken advantage of by shady mortgage lenders.

In particular, lenders are required to stop foreclosing on the home if the homeowner submits any type of loss mitigation application at least 37 days before the home is repossessed and sold. They cannot continue the process until they've made a decision on the homeowner's application, the homeowner rejects the bank's offer, or the homeowner doesn't follow through on the terms of the modification.

If you're within the timeframe or none of the events noted have transpired, you are well within your rights to send the bank a cease-and-desist letter telling them to stop foreclosing on the home. Reminding them of the law regulating dual tracking should put a stop to it immediately, especially if it comes from an attorney.

Thus, to protect yourself and your right, you should hire a lawyer as you make the decision to fight the foreclosure of your home. An attorney will keep an eye on what the bank is doing and immediately put them in their place if they step out of line.

Determine If You Suffered Any Damages

Violating the dual tracking prohibition can be grounds for a lawsuit. If you suffered damages related to the bank's actions, you may be entitled to recover compensation for your losses. For instance, if the bank manages to sell your home when they weren't supposed to, you could sue them for the value you lost or force them to cancel the sale and return the home to you.

Dealing with a dual tracking issue can be complex due to the rules and regulations involved. Consult with a foreclosure attorney who can help you make sense of it all, so you can fend off the attempted fraud and keep your home. Contact a local lawyer today.