Forbidding “dual tracking” is also part of being reasonable. In other words, the bank branch cannot be in negotiation with the debtor while simultaneously, and unbeknown to the client and, it seems, usually the branch, the bank’s legal department is engaged in issuing summons, taking judgment and/or selling the house in execution.[1] One of the provisions of relatively new California law is that a lender “cannot engage in dual-tracking, or the process of pursuing a foreclosure action while a loan modification application has been submitted”.[2] In January 1, 2013, the California Homeowner Bill of Rights became law and consumers were further protected against this abusive bank practices.
[1] This practice is very common in the author’s personal experience.
[2] Nicholas Krebs British Cures for American Foreclosure Woes: A Comparative Analysis of Foreclosure Law in the United States and United Kingdom Chi.-Kent J. Int’l & Comp. L. Vol. XV p22.