What Struggling Homeowners Need to Know About Dual-Tracking

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Homeowners must notify their mortgage servicer or lender immediately if they experience financial hardship and find it difficult to repay their monthly mortgage. Working out with your servicer is important if you want to protect your home from foreclosure especially during this time that the federal government has declared a national emergency against the COVID-19 pandemic. Applying for any loss mitigation like a loan forbearance could be an option to keep your family safe.

However, you may find it frustrating if your servicer suddenly takes action to foreclose on your home even after submitting a complete loss mitigation application. This is a bad practice known as dual-tracking. Dual-tracking could be prevalent during these difficult times as servicers have become overwhelmed with borrowers who take action to protect their homes. As someone in a tough situation, there are things that you need to know to prevent this from happening.

Dual-tracking in the time of COVID-19

During this difficult time of a pandemic, servicers could be overwhelmed with loss mitigation applications from struggling borrowers. The company that manages your monthly mortgage payments may wrongfully advance a foreclosure procedure even if you’ve initiated a workout plan to protect your home from foreclosure. In the process, you may lose your home if the foreclosure procedure is first completed while waiting for your relief. Dual-tracking was a common practice during the 2008 housing crisis where servicers would advance a foreclosure procedure even if the borrower was in the process of applying for loss mitigation.

Your servicer has a duty to protect you and your family from foreclosure

In accordance with the expanded foreclosure protection rules established by the Consumer Financial Protection Bureau (CFPB), mortgage servicers are required to take action to protect you and your family from losing your home. If you’ve previously sought and submitted a complete loss mitigation application and was able to make your mortgage current, your servicer should help you again if another financial hardship makes it impossible for you to repay your monthly mortgage. Servicers also must notify you in writing about the status of your loss mitigation application and when it is completed. Those are just a few of the protections you have as a borrower.

What is a complete loss mitigation application?

Basically, your servicer is not allowed to start a foreclosure if you have a pending loss mitigation application and have submitted all the required documents. A loss mitigation application is considered complete if the servicer receives all the required information to evaluate your application and the relief options available to your situation. Your servicer should exercise reasonable diligence in collecting the information and documents they require to evaluate your situation. Once you start processing your loss mitigation, your servicer should not start a foreclosure.

After completing your application, the servicer can only start a foreclosure if they’ve already informed you that you are ineligible for any loss mitigation options, you have exhausted your appeal, you have not accepted the workout options presented to you, or you’ve accepted a workout option but you’ve failed to comply with the terms of the deal.

It’s possible to avoid dual-tracking

Dual-tracking is a frustrating situation if you’re eager to protect your home and yet your servicer has initiated to foreclose your property. As someone struggling with your monthly mortgage payments, it’s important that you contact your current servicer immediately. During this time that you’re figuring out a workout plan with your servicer, it’s important that you keep all correspondences and take down notes from the contact persons you’ve spoken with at your servicing company.

If you think your servicer is not cooperating with you, or if a foreclosure has been initiated during the time that you’re applying for loss mitigation, a certified housing counselor could help you get in touch with your servicer. Moreover, you may also consider filing a complaint with the CFPB. Just recently, the CFPB ordered a servicing company to pay $1.5 million for violating the law against dual-tracking.


During this time of a national emergency, mortgage servicers could be overwhelmed with borrowers requesting for loss mitigation. However, some servicers could initiate a foreclosure even if the borrower has started a loss mitigation application. The federal government prohibits dual-tracking to help prevent struggling homeowners from losing their homes and to create a workout plan to repay mortgage. When applying for loss mitigation, it’s important that you comply with all the information and documents requested by your servicer. You can get help if you think your servicer is not cooperating with you.