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Mortgage Dual-Tracking is Illegal in California

The term, “dual-tracking” refers to the situation where a mortgage servicer brings a foreclosure action on a home mortgage while a borrower’s application for modification of the mortgage is pending. Since the adoption of the Homeowner’s Bill of Rights in 2013, California law prohibits “dual-tracking.”

If a mortgage borrower submits a complete application for a first lien loan modification at least 5 business days before a scheduled foreclosure sale, the pending foreclosure action cannot proceed as planned. The mortgagor may not record a notice of default, or notice of sale, or conduct a trustee’s sale of the home until the application is addressed.

    As provided in Civil Code §2923.6(c), the foreclosure process may move forward again after:
  • • the mortgage servicer makes a written determination that the borrower is not eligible for a loan modification, and
  • • any appeal period has expired
  • • the borrower does not accept an offered loan modification within 14 days of the offer
  • • the borrower defaults on a modified loan.

The borrower may stop the filing of a notice of default, or notice of sale, or trustee’s sale when the notice violates the prohibition on dual-tracking. (Civil Code §2924.12(a).) The mortgagor has the right to cure its violation by withdrawing the notice. (Civil Code §2924.12(c).) If a trustee’s deed of sale has been recorded in violation of this section of California law, the mortgagor may be liable to the borrower for actual economic damages. (Civil Code §2924.12(b).) A borrower may also seek payment of attorney’s fees and costs from a mortgagor that violates these provisions. (Civil Code §2924.12(h).)

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