Question: Can my home be foreclosed while I am applying for a loan modification?
Answer: Generally, no. Recent loan servicing regulations prohibit "dual tracking", a procedure where servicers review loan modifications while simultaneously pursuing foreclosure. These regulations restrict servicers from moving ahead with the foreclosure process while it is reviewing a loan modification application. There are, however, time limits on this: submitting a loan modification the day before the scheduled sale will not necessary stop a foreclosure.
In addition to these federal regulations, there are other legal defenses that may be available to stop a foreclosure while a loan modification is under review. Contact a lawyer if you find yourself in this difficult situation.
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Labels: FAQ, loan modification