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Wednesday, October 3, 2012

Mortgage Foreclosure "Dual Tracking" with Loan Modifications Now Restricted Under Settlement Agreement with Nation's Five Largest Banks



Earlier this year, 5 of the nation's biggest banks (GMAC, Bank of America, Citi, Chase and Wells Fargo) entered into a settlement with the Dept. of Justice over the allegations of "Robo-signing" of foreclosure complaints.   The settlement contains new servicing standards and protections for home owners.

The terms of that settlement agreement go into effect today and restrict when Banks can refer a case for foreclosure.  Borrowers must be thoroughly evaluated for all available loss mitigation options before foreclosure referral, and banks must act on loss mitigation applications before referring loans to foreclosure; i.e. “dual tracking” will be restricted. Denials of loss mitigation relief must be automatically reviewed, with a right to appeal for borrowers.

An executive summary of the settlement terms can be found here:

                                

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