On January 1, 2013 the new California Homeowner Bill of Rights went into effect. One part of this new law protects homeowners in foreclosure from dual-tracking. This means that if you request a loan modification within a certain period of time, your lender (or mortgage servicer) must stop temporarily stop foreclosure proceedings while it considers your application.
What Is Dual-Tracking?
In the past, a lender would sometimes continue to foreclose on a homeowner’s home, even while it was simultaneously considering the homeowner’s application for a loan modification. Because of this practice, called dual-tracking, many homeowners who were in the midst of loan modifications were shocked to lose their homes to foreclosure.
What Does the New California Foreclosure Law Do?
Under the new law, lenders and servicers that receive a complete loan modification application must temporarily stop foreclosure proceedings until it makes a decision on the application.
To learn details about the new prohibition on dual-tracking in California, as well as other provisions of the Homeowner Bill of Rights, see Nolo’s article California Foreclosure Protection: The Homeowner Bill of Rights.