Court stepsBy Omar J. Arcia, Esq.
Foreclosure Defense and Consumer Bankruptcy Attorney

            One of the most difficult challenges we face in assisting homeowners through the process of a loan modification, is the threat of foreclosure, or foreclosure sale of the property we are trying to preserve. The Consumer Financial Protection Bureau (CFPB) recently issued new mortgage servicing rules designed to protect borrowers when it comes to mortgage loans. These rules became effective on January 10, 2014, but many homeowners are unaware of these important changes in the law. 

            Under the new rules, mortgage servicers are required to implement major changes in the way they do business. A mortgage servicer is the company that collects monthly mortgage payments from borrowers on behalf of the owner of the loan, as well as tracks account balances, manages the escrow account, handles loan modification applications, and pursues foreclosure in the case of defaulted loans. The CFPB now requires mortgage servicers to send more detailed periodic billing statements, provide timely interest rate adjustment notices, promptly credit mortgage payments, provide payoff requests in 7 days or less, provide options to force-placed insurance, and quickly resolve errors and provide information requests. The most significant benefit for homeowners from these rules is that it restricts “dual tracking.”

            Dual tracking is when a mortgage servicer considers a homeowner for a loan modification, and at the same time proceeds with a foreclosure action against that homeowner. Under the new rules, a mortgage servicer CANNOT START FORECLOSURE until at least 4 months AFTER the homeowner stops paying the loan to provide the homeowner enough time to pursue a loan modification. If a loan modification application is made, the servicer CANNOT START FORECLOSURE unless the servicer notifies the borrower that he/she is not eligible for any loan modification, the borrower rejects a loan modification offer, or the borrower fails to comply with a trial modification. Also, if already in foreclosure, the mortgage servicer CANNOT REQUEST FINAL JUDGMENT OR CONDUCT A FORECLOSURE SALE if the homeowner submits a complete loan modification package at least 37 days before the foreclosure sale.

            The attorneys at the Arcia Law Firm have more than 40 years of combined legal experience, and we are privileged to successfully represent hundreds of homeowners in our community. We have foreclosure defense, loan modification and bankruptcy departments all in the same office. If you are struggling to make your monthly mortgage payments, if you are in the middle of a frustrating loan modification process, or if you just received a foreclosure summons, contact the Arcia Law Firm today at 954-437-9066 to schedule a free personal consultation with an attorney (not a paralegal or assistant), or visit to schedule your appointment.

            Detailed explanations of different options available to homeowners are also discussed in a one-of-a-kind DVD developed by the Arcia Law Firm entitled “Fight For Your Home.” If you mention that you heard about the DVD through blog post, you will receive a complimentary copy during your free consultation to discuss your case in detail with a member of our highly experienced legal team.

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