In a real estate setting, dual tracking refers to processes where a mortgage provider simultaneously pursues a foreclosure on the home while reviewing the homeowner’s loan modification application. In most cases, this is not a favorable situation for the borrower, as there is a fair amount of uncertainty involved. For instance, suppose a person has an application for a loan modification pending. They may be surprised or shocked if they receive notice of foreclosure just before they receive an update on their loan.
In the past, dual tracking was allowed, especially where the borrower was aware that both processes were occurring at the same time (the foreclosure proceeding and the loan modification). However, most of the time, these ended up in foreclosure. Currently, many laws regulate and prohibit dual tracking in a mortgage loan context.
Is Dual Tracking Illegal?
Several laws regulate dual tracking arrangements, and many states such as California and Nevada prohibit dual tracking. Such laws may provide protections such as:
- Requiring that foreclosure proceedings be stopped or paused if a mortgage loan modification application is submitted for consideration; the foreclosure proceedings must remain stopped until the modification application has been sufficiently reviewed
- Prohibiting foreclosure proceedings from beginning if there is a loan modification application already being processed
- Prohibiting foreclosure from beginning until the loan is a certain amount of time delinquent (thereby giving the borrower sufficient time to apply for loan modification or forgiveness)
Dual tracking is especially of concern where the borrower is not aware of the foreclosure process, or where fraud, deceit, or misrepresentation are involved in the arrangement.
Are There any Legal Consequences for Dual Tracking Foreclosure Issues?
Dual tracking in a loan context can lead to various legal consequences. For instance, if fraud is involved, the lender may be required to pay any damages for losses caused by the fraud.
In other cases, it may be possible to obtain an injunction to stop the foreclosure process from occurring. Of course, legal remedies and consequences will depend on the facts and circumstances, as well as the state laws involved (not all states have laws for dual tracking).
Do I Need a Lawyer for Assistance with a Dual Tracking Legal Claim?
Dual tracking is a serious legal issue and can involve some complex real estate legal issues. You may need to hire a real estate lawyer in your area if you need any assistance with dual tracking foreclosure issues. Your attorney can provide you with legal research to determine what your legal rights are under the laws of your state. If you need to file a lawsuit and appear in court, your attorney can provide you with guidance and representation during those times.