FAQ: Can My Home Be Foreclosed While I Am Applying for a Loan Modification?

Question:  Can my home be foreclosed while I am applying for a loan modification?

Answer:  Generally, no.  Recent loan servicing regulations prohibit “dual tracking”, a procedure where servicers review loan modifications while simultaneously pursuing foreclosure.  These regulations restrict servicers from moving ahead with the foreclosure process while it is reviewing a loan modification application.  There are, however, time limits on this: submitting a loan modification the day before the scheduled sale will not necessary stop a foreclosure.

In addition to these federal regulations, there are other legal defenses that may be available to stop a foreclosure while a loan modification is under review.  Contact a lawyer if you find yourself in this difficult situation.