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Can a loan servicer file foreclosure while we are in review for a mod

Yucca Valley, CA |

I have applied for a loan mod through Green Tree and they seem to be dragging their feet and sitting on my paperwork. As a result it has gone passed the thirty day point for mod review and they are going forward to set a date for sale. I thought they couldn't do a mod and foreclosure in ca at the same time. I think the fax machine is directly linked to the shredder because I keep sending the same docs over again. WE need HELP

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Attorney answers 3


As of now, yes. On January 1, 2013 the California Homeowner Bill of Rights becomes law, and lenders will no longer be able to "dual track." You can read the full contents of the Bill at My experience, however, has been that lenders will continue to reschedule the sale date as long as your modification is still under consideration. The problem is that if they finally reject your modification application they will set the sale date within 30 days, giving you little time to do anything about it. I agree with you about the frustrations of dealing with lenders about modifications. The same is true for short sales. Be persistent and good luck.


Yes, until the new law in California goes into effect (January 1, 2013) there is still what is called "dual tracking" of loan mod reviews and foreclosure timelines. This means, while a loan modification is "under review" the foreclosure is not halted and the timing of such proceeding continues to run. NOD to Notice of Trustee Sale (NOTS) at least 90 days.... NOTS until Trustee Sale Date at least 21 days.

If you are seeking to stay in your home and capable of making payments/currently employed, you may wish to consider a Chapter 13 as a possible solution. For more information on chapter 13 and bankruptcy in California you may wish to visit:

We provide free consultations, easy to understand explanations, and reasonable fees/payment plans to help you protect your rights with experienced legal counsel.

Best of luck!

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Yes, they can and they do. However, in many situations they continue the sale date until the final review of the loan modification. Should the servicer set a sale date, you can stop the foreclosure by filing for bankruptcy relief. If you are able to continue paying the current mortgage amount until the loan modification is finalized, you can file for a chapter 13, pay the mortgage, and may be able to cure the mortgage arrearages within 36-72 months of your chapter 13 plan period. However, when/if your loan modification is approved and the amount of mortgage is reduced, the balance/saving between the currrent mortgage amount and the modified loan amount must/will be paid to the administering chapter 13 trustee. You may also be able to avoid/remove any junior mortgage liens from your property in a chapter 13 case if the current market value of your house is less than your first mortgage. If you did not qualify for a 13, you may still look into filing for a chapter 7 as it not only may remove your personal liabillity for the debt but also buy you sometime to move.
Best of luck!