Are You Facing Foreclosure?

Are You Facing Foreclosure?

If you are not able to keep up with your mortgage payments, the prospect of foreclosure and with it losing your home can be daunting. Still, foreclosure is a rigorous legal process, and you have certain rights based on state law along with the mortgage documents you signed. Knowing your rights can help you navigate the foreclosure process as smoothly as possible, or even avoid it if your lender violated any foreclosure requirements.

What Is Foreclosure?

Foreclosure is the legal process that allows lenders to recover the balance owed on a defaulted loan by taking ownership of and selling the mortgaged property as collateral. Nonpayment is what usually triggers default, but it can also happen if a borrower does not meet certain other terms in the mortgage contract.

Loss Mitigation Rights

Your loan servicer is the company that handles your mortgage account, and it may or may not be the company that either issued or currently owns the loan. The loan servicer is required to contact you (or try to do so) by phone to talk about “loss mitigation” no later than 36 days after your first missed payment and within 36 days of any subsequent missed payments. Loss mitigation is the process by which you and your lender work together to try and avoid foreclosure. Within 45 days of a missed payment, your servicer must notify you in writing about your loss mitigation options and refer you to someone who can help you try to avoid foreclosure. In general, your servicer cannot start to foreclose until you are at least 120 days behind on your payments.

Right to a Breach Letter

Mortgage contracts typically have a clause that obligates lenders to send a written notice called a “breach letter” to tell you when you are in default. The breach letter must include:
• Details about the default and its causes
• What you need to do to cure the default and reinstate the loan
• The date by which you must cure the default (usually at least 30 days from the date you receive the notice)
• Notice that failure to cure the default on time will lead to the sale of the property
To cure the default and avoid foreclosure you must pay the full past due amount by the date shown in the breach letter, along with any back interest, late fees, and penalties. If you do not and you have not worked out some other option—foreclosure proceedings will likely begin. In general, you must be behind on payments for at least 120 days before a foreclosure can start, so your lender will likely send a breach letter close to the 90th day of the delinquency.

Notice of the Foreclosure

You are entitled to notice of a pending foreclosure no matter which state you live in. If it’s a judicial foreclosure, you’ll get a complaint and summons letting you know that a foreclosure has begun. If it’s a non-judicial foreclosure, you may receive two notices:

1. Notice of default (NOD). Depending on state law, a non-judicial foreclosure starts when a notice of default is recorded at the county office. The NOD serves as public notice that you are in default. It contains details about the borrowers, lender, trustee, property, default, action required to cure the default, and a statement that if the default is not cured by the stated deadline, the lender will sell the property at a public sale.

2. Notice of sale (NOS). The notice of sale might be mailed to you, published in a local newspaper, posted on the property, and recorded in the county land records. It includes details about the property, a statement that the property will be sold at a public auction, and information about the foreclosure sale. If you do not receive an appropriate notice under your state’s laws, you may have a defense to the foreclosure. While that does not necessarily mean you could avoid the foreclosure, it may force the servicer to issue a new notice and start the foreclosure process from scratch. That could potentially give you enough time to get caught up on payments or sort out another option.

Right to Reinstate

Depending on state law, you may be able to stop a foreclosure if you make a lump-sum payment to get up to date on your loan, including any fees and expenses. In Utah, there is no right to reinstate after the foreclosure sale is completed. After that, you resume your regular payments. In general, you must reinstate the loan by a particular deadline, such as by 5:00 p.m. on the last business day before the property sale is scheduled. Your mortgage contract may also give you the right to reinstate. Check your mortgage or deed of trust for a section known as the reinstatement clause, titled as “Borrower’s Right to Reinstate After Acceleration” (or similar language) to find out if and how you can reinstate your loan. If you do not have a right to reinstate through state law or your mortgage contract, the lender may allow you to reinstate after considering your request. If the lender refuses, you can ask a court to allow the reinstatement. In general, a judge would rather avoid foreclosure if you have the cash to get current on your loan.

Right of Redemption

All states let borrowers pay off debt (including fees and expenses) and “redeem” their property before a foreclosure sale, and some states even allow borrowers to buy back the property after the foreclosure sale. To redeem the property, you pay the full balance due before the foreclosure sale or reimburse the person or entity that bought the property at the foreclosure sale, depending on the situation. In Utah, the only time you have a right of redemption is during the 90-day window after the Notice of Default has been recorded with the County Recorder’s office. After that, your right is gone. Call us to discuss options at that point.

Right to Foreclosure Mediation

Some states, counties, and cities give property owners facing foreclosure the right to partake in mediation. In foreclosure mediation, you meet with your lender (or servicer) and an impartial mediator to discuss options likes a loan modification, short sale, repayment plan, or deed in lieu of foreclosure.

Right to Challenge the Foreclosure

No matter where you live, you have the right to challenge the foreclosure in court. If it’s a judicial foreclosure, you can just participate in the existing foreclosure lawsuit. If it’s a non-judicial foreclosure, however, you must file your own lawsuit. In general, it may make sense to challenge the foreclosure if you think the servicer made a mistake or violated the law.

Right to a Surplus

If the property sells at a foreclosure sale for more than you owe (including any fees, expenses, and liens on the property), you are entitled to the excess proceeds—called a surplus. Of course, depending on state law, if the foreclosure sale does not cover your debt, you may be on the hook for a deficiency judgment.7

Fair Debt Collection Practices Act Validation Letter

The Fair Debt Collection Practices Act (FDCPA) is a federal law that covers when, how, and how often third-party debt collectors can contact debtors. FDCPA may apply to foreclosures, but it depends on whether it’s judicial or non-judicial:
• Judicial foreclosures. In general, judicial foreclosures are viewed as being subject to FDCPA because creditors can get deficiency judgments.
• Non-judicial foreclosures. The FDCPA does not apply to firms pursuing non-judicial foreclosures under a unanimous decision.
• When FDCPA applies, your mortgage servicer must send you an FDCPA validation notice that includes:
• How much you owe, including interest, late charges, attorney fees, and other charges
• The name of the creditor
• A statement that explains that, unless you dispute the validity of the debt within 30 days of receiving the letter, the debt will be assumed to be valid
• A statement that, if you notify the debt collector in writing within the 30-day period to dispute the debt, the debt collector will get written verification of the debt and send you a copy
• A statement that the debt collector will provide you with the name and address of the original creditor, if it’s different from the current one, if you request it within the 30-day period
Bank account garnishment means that a debt collector has successfully sued to have money taken out of your bank account. This happens if you haven’t repaid debts such as a medical bill or unpaid taxes. Your bank isn’t required to notify you of an account garnishment unless the withdrawal overdraws your balance. Depending on where you live, you may have certain rights and protections against having your bank account garnished.

Bank account garnishment means that a collection agency is legally allowed to remove money from your account to repay an outstanding debt, and is usually a last resort that creditors turn to when debtors repeatedly ignore requests to pay back what they owe. Loan companies won’t take the costly legal steps required to garnish a debtor’s bank account unless their mailed notices and phone calls have failed to settle the debt.

According to the law, a creditor needs to win a judgment in order to garnish your account. In other words, the lender must file a lawsuit, which requires an attorney to deliver notice to both the borrower and the court. To begin withdrawing funds from a debtor’s account, the creditor needs an order or writ of garnishment, signed by a court official. The Internal Revenue Service (IRS) is the only creditor that can garnish money from bank accounts without a judgment.

Having your bank account garnished is different from having your wages garnished. A court-ordered wage garnishment requires your employer to withhold a certain amount of your paycheck and send it to your creditor. Since the deduction takes place before your paycheck is cashed, this means that your bank plays no role in a wage garnishment. In rare cases, it’s possible for creditors to garnish both your wages and your bank account at the same time.

Can Your Bank Account Be Garnished Without Notice?

Once a garnishment is approved in court, the creditor will notify you before contacting your bank to begin the actual garnishment. However, the bank itself has no legal obligation to inform you when money is withdrawn due to an account garnishment. However, you may receive an automated overdraft notification if the garnished amount is greater than your available account balance. The notification of garnishment should come from your creditor and not your bank. After your bank is notified, it will need to follow the court order before honoring any other transactions you have scheduled. Federal law states that individuals who receive federal benefits will have their last two months’ worth of deposits reviewed to see which ones are exempt. If you believe that your bank account may be garnished, notify your bank of these transactions to ensure those funds are properly exempted. When a creditor garnishes your bank account, money that isn’t exempt from garnishment will be frozen and seized. Some banks may also charge non-sufficient fund (NSF) fees if the creditor attempts to withdraw more money than you have. Even if you have overdraft protection, the bank may be legally obligated to fulfill the transaction until the garnishment is satisfied. Some banks also charge a separate additional garnishment. Depending on where you live, account garnishment doesn’t necessarily mean the loss of your entire balance. State laws on bank garnishment vary, but most states impose a garnishment limit based on a percentage of your disposable income. This ensures that debtors will keep enough money to meet their living expenses. Certain types of income are specifically protected against garnishment. For example, direct deposits from federal benefits such as Social Security—are protected to some degree in every state.

To lift the garnishment, you can try to contact the collection agency to negotiate alternative payment options. You may be able to lower interest payments, reduce the amount you owe, or make partial payments for a certain amount of time. However, you’ll have more bargaining power if you reach out to your creditor before a judgment is made. It’s in your best interest to prevent an account garnishment from happening in the first place. You can challenge the judgment in cases where the garnishment is made in error, is improperly executed, or presents a serious financial threat to you. If you decide to challenge the garnishment, seek help from an attorney and act quickly since you may only have up to five business days. If you can’t afford an attorney, search for legal aid offices that offer services for free or at a reduced rate.

Filing for bankruptcy can stop a garnishment, but this should be considered as a last resort. When you declare bankruptcy, an injunction goes into effect that stops most collectors from calling, sending letters, or filing lawsuits and garnishments. The creditor filing the suit against you can ask the court to lift the injunction, but only under very special circumstances, but this doesn’t mean discharging your debt. You may still owe money after a bankruptcy.

What Is Repossession?

In repossession, a bank or leasing company takes a vehicle away from a borrower who is behind on payments, often without warning. Lenders might send a driver to collect the car, or they may take it away with a tow truck. In some cases, lenders can disable your car by remote control so you can’t drive it until you clear things up. Borrowers typically receive notification that they’re behind on payments, and lenders must inform borrowers about the consequences. But lenders might not tell you exactly when they’re coming for the vehicle.

When Is Repossession Allowed?

To borrow money or lease a car, you have to agree to specific terms. For example, you agree to make monthly payments on time and keep adequate insurance on the vehicle. If you don’t meet those requirements, the bank (or leasing company) has the right to take the car.

Resulting Problems

In addition to losing the car, your credit will suffer, and you’ll probably owe significant fees. Repossession, whether you eventually get the car back or not, shows up on your credit reports for seven years and can lead to lower credit scores. We’ll discuss those problems in more detail below.

Your Rights

Your lender might have the right to take your car, but you also have rights.

Private Property

Lenders can repossess a vehicle that is parked on private property, but state laws generally restrict them from “breaching the peace” while doing so. For example, repossession agents cannot damage your property to get access to a vehicle. They typically cannot destroy locks to get into your garage, nor can they use (or threaten to use) physical force when taking your car.

Sales Price

If your car is taken and sold, the lender needs to sell it for a “commercially reasonable” price.3 It doesn’t need to be the highest price possible, but the lender must make an effort to get fair market value out of the car. Why? The sales proceeds will go toward paying off your debt, so it would be unfair to repossess the vehicle and “give it away” to somebody else.


Things don’t necessarily end after repossession. If your lender sells your car, the sales proceeds go toward your loan balance. In many cases, the car sells for less than you owe, so your loan is still not paid off. The amount you owe after the vehicle sells is called a deficiency. In addition to your loan balance, you also have to pay for costs related to repossession. Charges can include expenses for sending a repossession agent, storing the vehicle, preparing the vehicle for sale, and more. Those costs are all added to your deficiency balance. If you can’t pay the balance, expect your lender to send your account to a collection agency. At that point, you can negotiate a settlement, pay nothing, or set up a repayment plan. In some cases, your debt will be forgiven or charged off (possibly resulting in tax liability for forgiven debt).

Free Initial Consultation with Lawyer

It’s not a matter of if, it’s a matter of when. Legal problems come to everyone. Whether it’s your son who gets in a car wreck, your uncle who loses his job and needs to file for bankruptcy, your sister’s brother who’s getting divorced, or a grandparent that passes away without a will -all of us have legal issues and questions that arise. So when you have a law question, call Ascent Law for your free consultation (801) 676-5506. We want to help you!

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States

Telephone: (801) 676-5506
Ascent Law LLC

4.9 stars – based on 67 reviews

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Stop Foreclosure

Stop Foreclosure

No one wants to be forced into foreclosure after finding a suitable home, but sometimes it’s the best option when times get especially tough. However, there are a number of ways homeowners can prevent foreclosure or at least manage the process more smoothly. Below are answers to the most frequently asked questions regarding the prevention and management of a foreclosure.

Will the bank negotiate with me to lower my interest rate and payment and prevent foreclosure?

Some lenders are more willing to adjust your mortgage than others, so you should always call your bank’s loan mitigation department to try. Typical solutions banks will put forward include accepting partial payments for a set period of time, accepting late payments or simply modifying the terms of your loan.

The federal government has also set up programs to help homeowners prevent foreclosure, such as FHASecure, Hope for Homeowners and the Homeowner Affordability and Stability Plan. The Homeowner Affordiability and Stability Plan is the latest program offered by the federal government and allows you to: (1) Modify your mortgage: people about to default should consider this option first, as it tries to reduce the size of the payments (by up to 31%) by reducing the interest rate on the mortgage for a set period of time (typically 5 years). To qualify, the unpaid principal of your mortgage must be less than $729,750. (2) Refinance your mortgage: people who are in trouble because their house has lost a significant amount of equity in the last few years (even those who are “underwater”) should consider this option. Note, however, that you cannot be underwater by more than 5 percent. Typically you need considerable equity to qualify for a refinance loan, but under this program owners may need little or no equity at all. To qualify, your loan must be owned by Freddie Mac or Fannie Mae, your mortgage must be less than $417,000 (unless you live in certain high priced areas such as New York, but if such is the case, you should consider modification over refinance) and you cannot be more than 30 days late on your monthly payments for the prior year.

Can I just sell my house for less than what I owe on it?

Selling your house for less than you owe is referred to as a “short sale”, and in many states, you must get the permission of your lender before you do this. If you don’t, the lender may sue you after the sale for the difference. If you live in a state that does allow this, then you can sell your house for less than the mortgage amount and the lender can’t do anything about it. Finally, short sales typically aren’t possible if you have more than one mortgage, unless the same lender owns the additional mortgages.

Can I file for bankruptcy to prevent foreclosure?

Usually Yes, you can. But not always. Sometimes, bankruptcy cannot prevent foreclosure, but it can certainly delay it. You really need to speak with a bankruptcy lawyer to know if it will work in your specific circumstances. Once you file, the court can enter a “stay” which would cease all collection actions, sales and foreclosures. The lender must then file for a motion to “lift the stay” and proceed with the foreclosure. This may be an attractive option if it also makes sense for other reasons since you can essentially live in your home for free for awhile and use the money you saved to secure a new place to live or help with your outstanding mortgage payments.

What will happen to my tenants if my property is foreclosed on?

Leases are generally wiped out upon foreclosure, unless the lease preceded the mortgage (which is rare). That does not mean, however, that your tenants will just up and leave immediately. You must give them proper notice of eviction (up to 90 days in some places), and there are a variety of other potential laws that may prevent your tenants from being evicted (such as Section 8 housing laws).

Can I give my lender the deed to my house instead of foreclosing?

Sometimes you can, but in most states the lender can still sue you for the difference between what it sells the house for versus what you owe. Thus, this is not an attractive option unless you can get your lender to agree, in writing, to not sue you for the difference. Similar to short sales, this option typically isn’t available if there is more than one mortgage on the property unless the additional mortgages are held by the same lender.

Homeowners who are hoping to stop foreclosure often dread dealing with the facts that got them to this place to begin with. Dealing with those facts can be depressing. If they think back to when they first bought that home, losing the home was probably the furthest thing from their mind. Few homeowners actually plan to go into foreclosure. Apart from those who knowingly participate in mortgage fraud with the intention of never making a single payment, most homeowners face sudden extenuating circumstances that force them to stop making timely mortgage payments. Here are a few of those reasons:
• Job loss/unexpected unemployment
• Sudden illness or medical emergency
• Death in the family
• Divorce/loss of a second income
• Excessive debt obligations
• Job demotion or promotion denials
• Inability to pay an adjustable interest rate that increases
• Unexpected major home maintenance expense
• Balloon payments due
If you’ve fallen behind on your mortgage payments and find yourself facing imminent foreclosure, it could still be possible to save your home. And if saving your home is no longer an option, you might at least be able to delay the foreclosure process and gain more time to live in the property without making any payments. If your foreclosure sale is scheduled to take place in a matter of days, you can stop the foreclosure in its tracks by filing for bankruptcy. Upon your filing, something called an automatic stay goes into place. The stay immediately puts the foreclosure on hold during the bankruptcy process. The lender may try to get around the automatic stay by filing a motion to lift the stay and asking permission from the court to continue with the foreclosure proceeding. But even if the lender’s motion is granted, the foreclosure will still probably be delayed for at least one or two months, during which time you can continue trying to work out a foreclosure alternative. If you want to save your home, you might be able to do so by filing Chapter 13 bankruptcy. If you can’t make your mortgage payments and keeping your home isn’t an option, Chapter 7 bankruptcy might still be able to help you make the most of the foreclosure.

Chapter 13 Bankruptcy

If you’re facing foreclosure, a Chapter 13 bankruptcy allows you to make up the mortgage arrears through your plan (something you can’t do in a Chapter 7 bankruptcy). Chapter 13 can also potentially help you save your home because it will reduce the amount of debt you will have to repay, thus freeing up your money to put toward paying your mortgage. With a Chapter 13 bankruptcy, you’ll be required to propose a repayment plan. If the court approves your plan, and you’re able to stick to the plan for the required three to five years, then your remaining unsecured debt will be discharged and you’ll be able to retain your home.

Chapter 7 Bankruptcy

If you’re in arrears and facing foreclosure, Chapter 7 bankruptcy doesn’t provide a way for you to catch up. So, unless you can negotiate something with your lender independently from the bankruptcy, you’ll most likely lose your home. But filing for Chapter 7 bankruptcy can still provide benefits. Perhaps the biggest benefit is the delay in foreclosure proceedings. A delay will allow you more time in your home and give you the opportunity to save money (because you won’t be making any mortgage payments during the delay) and to try to work out a foreclosure alternative with your lender. Chapter 7 bankruptcy will also eliminate your personal liability for your mortgage debt; you’ll probably still lose your home, but you won’t be liable for any deficiency remaining after the foreclosure.

Risks of Filing Bankruptcy

Filing for bankruptcy is a serious step and should be carefully considered. Most significantly, a bankruptcy filing can result in the loss of other valuable property and will damage your credit score. Keep in mind, though, that foreclosure will also damage your credit score, and the benefits of filing bankruptcy (the discharge of your mortgage and unsecured debts) might outweigh any hit you might experience to your credit.

Sue Your Lender

If you’re facing a judicial foreclosure, by the time of your scheduled foreclosure sale, you technically already had your chance to fight the foreclosure in court. But if you’re facing a non-judicial foreclosure (a foreclosure that doesn’t go through the court), then you might be able to slow or stop your foreclosure at the last minute by filing a lawsuit. But you can’t stop the process just because you want more time to live in the home. You must have some legal reason or valid defense that’s based in good faith for fighting the foreclosure. To succeed in your suit against your lender, you’ll need to prove to the satisfaction of the court that the foreclosure should not take place because, for example, the party foreclosing is not the party that owns the mortgage note, the lender (or servicer) didn’t take all of the legally required steps in the foreclosure process, or the lender (or servicer) made some other serious error. The downside to suing your lender is that a lawsuit can be very costly. If a court doesn’t believe your allegations against the lender, your lawsuit will serve only to delay rather than prevent your foreclosure. But even a delay to your foreclosure might be enough of an incentive for your lender to reach a settlement with you.

Apply for Loss Mitigation

While you can’t wait until the last minute before a foreclosure sale for this option to help, you might be about to stop or delay a foreclosure by applying for loss mitigation (an alternative to foreclosure). Under federal law, if you send the servicer (the company that handles the loan account on behalf of the lender) a complete loss mitigation application more than 37 days before a foreclosure sale, the servicer can’t ask a court for a foreclosure judgment or order of sale, or conduct a foreclosure sale, until:
• it tells you that you don’t qualify for a loss mitigation option (and your appeal, if you get the right to appeal, has been exhausted
• you turn down all loss mitigation offers, or
• you don’t stick to the loss mitigation agreement, like if you fail to make payments on a trial modification.

In most instances, the servicer has to make a decision your application within 30 days and can proceed with the foreclosure after any of the three above conditions is satisfied. Also, the servicer doesn’t have to review multiple loss mitigation applications from you. But if you get current on the loan after submitting an application, and you later submit another application, the servicer has to review it. A few states also have laws that prevent a foreclosure from going ahead if the borrower submits a loss mitigation application, some of which are more generous than federal law. If you’re facing foreclosure, you might be able to stop the process by filing for bankruptcy, applying for a loan modification, or filing a lawsuit.

If a foreclosure sale is scheduled to occur in the next day or so, the best way to stop the sale immediately is by filing for bankruptcy. The automatic stay will stop the foreclosure in its tracks. Once you file for bankruptcy, something called an “automatic stay” immediately goes into effect. The stay functions as an injunction prohibiting the bank from foreclosing on your home or otherwise trying to collect its debt. So, any foreclosure activity must be halted. The bank may file a motion for relief from the stay. The bank will probably attempt to have the stay lifted by filing a motion seeking permission from the court to continue with the foreclosure. Even if the bankruptcy court grants this motion and allows the foreclosure to proceed, the foreclosure will be delayed at least a month or two. This should provide you with time to explore alternatives to foreclosure with your bank.

Chapter 13 Bankruptcy vs. Chapter 7 Bankruptcy

If you want to keep your home, a Chapter 13 bankruptcy might help you accomplish this goal. But if you’re simply trying to buy some time by stalling the foreclosure, a Chapter 7 bankruptcy might be right for you.

Benefits of a Chapter 13 bankruptcy

A Chapter 13 bankruptcy can help you keep your home by restructuring your debts. You will repay debts some in part and some in full over a period of three to five years as part of a repayment plan. You might be able to avoid foreclosure and remain in your home with this type of bankruptcy because you can repay any delinquent mortgage payments through the plan. Also, you will likely pay a fraction (or sometimes, none) of your unsecured debts during the plan period and possibly eliminate certain other debts like underwater second and third mortgages because they’re considered unsecured loans entirely when you complete your plan, freeing up money for your first mortgage. Even if you can’t complete the plan, filing for Chapter 13 bankruptcy will give you at least several months before a foreclosure can be completed.

Benefits of a Chapter 7 bankruptcy

If you’re already in foreclosure, filing Chapter 7 bankruptcy isn’t usually a good way to save your home unless you can get a loan modification. But it will delay the foreclosure proceedings and provide you with time to live in the home without making payments. You can put this money towards saving up for a rental. You can also use this time to try to work with the bank to come up with a way to avoid foreclosure. And, even if you still go through a foreclosure, a Chapter 7 bankruptcy can eliminate your personal liability for the mortgage debt, which means you won’t be liable for any deficiency remaining after the foreclosure. Also, if you already filed for bankruptcy within the past year, the stay could be limited to 30 days or eliminated altogether. If your bank is using a non-judicial process to foreclose where the foreclosure is completed outside of the court system then you might be able to delay or stop the foreclosure by filing a lawsuit against the bank to challenge the foreclosure. This tactic normally won’t work if the foreclosure is judicial because by the time of a foreclosure sale, you’ve already had your opportunity to be heard in court. To prevail, you’ll need to prove to the satisfaction of the court that the foreclosure should not take place because, for example, the foreclosing bank:
• can’t prove it owns the promissory note
• didn’t act in compliance with state mediation requirements
• violated a state law, like a Homeowner-Bill-of-Rights law
• didn’t follow all of the required steps in the foreclosure process (as determined by state law), or
• made some other grievous error.

The downside to suing your bank is that if you’re unable to prove your case, you’ll only delay the foreclosure process, perhaps briefly. Lawsuits can be expensive and, if you have no reasonable basis for your claims, you could get stuck paying the bank’s court costs and attorneys’ fees.

Apply for a Loan Modification

While you can’t wait until the last minute with this option, you might be able delay a foreclosure by applying for a loan modification, or another foreclosure avoidance option, because the bank could be restricted from dual tracking. Dual tracking is when the bank proceeds with the foreclosure while a loss mitigation application is pending.

Ultimately, if your modification application is approved, the foreclosure will be permanently stopped so long as you keep up with the modified payments.

Federal Rules Restrict Dual Tracking

Under federal law, if a complete loss mitigation application is received more than 37 days before a foreclosure sale, the servicer may not move for a foreclosure judgment or order of sale, or conduct a foreclosure sale, until:
• the servicer informs the borrower that the borrower is not eligible for any loss mitigation option (and any appeal has been exhausted)
• the borrower rejects all loss mitigation offers, or
• the borrower fails to comply with the terms of a loss mitigation option such as a trial modification.
Be aware that the servicer generally doesn’t have to review more than one loss mitigation application from you. But if you bring the loan current after submitting an application, the servicer must consider it. If you’re facing an imminent foreclosure sale and considering any of the options discussed, it is strongly recommended that you consult with a local foreclosure attorney or bankruptcy attorney immediately.

Foreclosure Lawyer Free Consultation

If you are in the foreclosure or pre-foreclosure process, please call Ascent Law for your free consultation (801) 676-5506. We want to help you.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States

Telephone: (801) 676-5506

Ascent Law LLC

4.9 stars – based on 67 reviews

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