Mortgage Modification and the Dual Track Foreclosure Scam

Many lenders attempt to work out a mortgage modification with distressed homeowners in good faith, hoping that by doing so, those individuals will be able to maintain their property. Others are using the situation to prey on unsuspecting homeowners who feel they are safe from foreclosure while a mortgage modification is pending. Known as a “dual track foreclosure,” it has prompted legislation in California and Oregon prohibiting such practices.

A dual track foreclosure happens whenever a mortgage company pretends to be working out a modification on a loan, yet simultaneously proceeds with a foreclosure. Since most people believe they are safe from foreclosure while a modification is pending, they often do not take measures that would protect them from this action, to include filing for bankruptcy.

When finally hit with a foreclosure notice, those who are the victim of this dual-track scam often do not have time to react, and also do not have enough time to come up with the money they need in order to save their property. As a result, they are more likely to lose their homes than those who are given advance notice of a pending foreclosure.

Greed may be what is motivating lending institutions to deceive distressed homeowners into thinking they have their best interests at heart. Most people will continue trying to make their mortgage payment if they believe a modification is possible. Those same people would be much less likely to pay anything if they felt a foreclosure were imminent.

Homeowners who are in arrears should never assume that asking for a modification will help them avoid foreclosure. Instead, these individuals would do well to find to seek advice from The Sader Law Firm. Even if you decide to contact your mortgage company for assistance, you should contact us first to discuss your options.