Many homeowners have heard the term “dual tracking” but many don’t fully understand this concept, which was made unlawful by the California Homeowners Bill of Rights (2013). Dual Tracking is a lender or mortgage servicer simultaneously negotiating with the homeowner on a modification, while at the same time foreclosing on the subject property.
Homeowners Bill of Rights (California 2013)
The California Legislature thought it was important to protect homeowners from this type of misleading and borderline fraudulent conduct by lenders. The issue is that a typical homeowner (rightfully) will assume that when their lender is actively working with them on a loan modification, requesting documents and information, completing and submitting their package to loss mitigation, etc., the lender will naturally stop the foreclosure process, it’s only fair. Obviously when the lender advances the foreclosure process while at the same time negotiating a mortgage loan modification, this is misleading to homeowners (either negligently or intentionally), and has come to be known as “Dual Tracking.”
Dual Tracking is Still Rampant in California
Despite the protections of the Homeowners Bill of Rights, and restriction against dual tracking, dual tracking is still rampant in California, and across the country. Dual tracking is an important tool for lenders to use to “ease” unwary or less sophisticated homeowners into foreclosure and then out of their property. The idea is for the lender to placate or subtly reassure homeowners they are “doing all they can” or “taking appropriate action” to keep their home so the homeowner does not hire a foreclosure defense attorney, bankruptcy attorney or cause any delay in the foreclosure process. Mortgage lenders are very adept in California at pushing through non-judicial foreclosures quickly and smoothly when homeowners think they’re protected. Just because there is a law against dual tracking, does not mean it is followed.
McFarlin LLP is a foreclosure defense and bankruptcy law firm serving California. We offer homeowners the opportunity to speak to an attorney about their situation at no initial charge.