Restrictions on Starting Foreclosure in 2014
LONG BEACH, CA., December 20, 2013/ Wealth Management Financial Advisors, announces upcoming changes in servicer regulations regarding modification and home loan assistance for struggling homeowners.
On November 26th and 27th of 2013, Marie Deary, senior financial advisor at WMFA, attended the Mortgage Servicing Compliance conference is Washington DC to discuss the housing market from the homeowners’ perspective. One of the hot topics discussed in the conference was “Dual Tracking.” Dual Tracking is the process in which a servicer will maintain a foreclosure sale date while a property is in review for modification or other options in order to save a home.
Mortgage servicers cannot start a foreclosure until 120 days (4 months) after a borrower falls delinquent to provide time for the borrower to submit a loss mitigation application. If the borrower does not submit an application, the foreclosure can begin. (Mortgage servicers are allowed to send certain early delinquency notices required under state law that may provide information related to counseling, legal help or other resources during the first 120 days a borrower is delinquent.)
Even if a borrower is more than 120 days delinquent, if that borrower submits a complete loss mitigation application before the servicer has made the first notice or filing required to initiate a foreclosure process, a servicer may not start the foreclosure process unless:
• the servicer informs the borrower that the borrower is not eligible for any loss mitigation option (and any appeal has been exhausted)
• the borrower rejects all loss mitigation offers, or
• the borrower fails to comply with the terms of a loss mitigation option such as a trial modification
Previously, the homeowner’s package had to be with the servicer 14 days before a pending foreclosure sale date was placed on hold. With the new programs, the package must be received 45 days before the pending foreclosure sale date in order to be considered for loss prevention options. Since the timing is critical in such cases, this could impact homes in jeopardy quite a bit.
According to the California Homeowners Bill of Rights, Dual Tracking must be stopped once the homeowner is placed into the review process for options to save the property from foreclosure. Since these new laws slated to be implemented are on the federal level, it is going to be an uphill climb for those homeowners who are at risk of foreclosure.
Since property values are increasing, now is the time to take action. Homeowners must act now to avoid the changing political climate