What is dual tracking?

Dual tracking happens when a servicer advances foreclosure steps, such as scheduling a sale or filing a notice of default, while a borrower's pending loss mitigation application remains unresolved. This puts homeowners in an impossible position: they are trying to avoid foreclosure through modification or forbearance, but the servicer is simultaneously pushing the case toward sale.

Federal regulations, including provisions in the Dodd-Frank Act and rules enforced by the Consumer Financial Protection Bureau, prohibit servicers from dual tracking in most circumstances. Specifically, a servicer cannot move to foreclosure sale while a complete loss mitigation application is pending. The servicer must evaluate the application within a specified timeframe and provide a written decision before proceeding with a sale. Some preparatory steps, like sending notices, may continue, but the servicer cannot schedule or conduct the foreclosure sale itself.

Why this matters: Without restrictions, servicers could ignore modification requests and proceed to sale anyway, stripping borrowers of their right to explore alternatives to foreclosure. Dual tracking violations give rise to defenses in foreclosure litigation and can support claims of servicer misconduct. Homeowners facing foreclosure should track when they submit loss mitigation applications and confirm in writing that servicers have received them. Violations of dual tracking prohibitions can become grounds for countering foreclosure actions or seeking damages.