Dual Tracking: Why They Can’t Foreclose While Reviewing Your Modification

“Dual Tracking” is when a bank moves forward with foreclosure (the “foreclosure track”) while simultaneously working with you on a loan modification (the “loss mitigation track”). It is one of the most dangerous practices in the industry because it lulls homeowners into a false sense of security.

The Federal Prohibition (12 C.F.R. § 1024.41(f) and (g))

Regulation X strictly prohibits dual tracking.

• Before the First Notice: A servicer cannot make the first notice or filing required for foreclosure until you are more than 120 days delinquent.
• After You Apply: If you submit a complete loss mitigation application, the servicer cannot move for foreclosure judgment or conduct a foreclosure sale.

They Must Stop the Sale

If you have a sale date scheduled, and you submit a complete application more than 37 days before that date, the servicer must halt the sale and review your application.

The Remedy

If a servicer tries to sell your home while your application is pending review, we can file a federal lawsuit to seek an injunction (a court order stopping the sale) and sue for damages. This is a powerful defense that can save your home.