Right before you are about to get your financial issues in line, your lender drops the “F” bomb – “foreclosure.” While this goes against rooted and established ethics concerning borrowers’ rights, it happens all of the time. The good news is that the nation is making a concerted effort to reduce this practice.
For example, a new bill has been signed into the law in Nevada, which prevents banks from engaging in the practice of “double tracking.” “Double tracking,” also known as “dual tracking,” is when the lender attempts to foreclose on a homeowner while the individual is within a foreclosure prevention method, such as loan modification or a short sale. The new law, passed by lawmakers and signed into the law by Governor Brian Sandoval in the 2013 legislative session, will be good news for some homeowners.
In the past, some lenders would dump surprise foreclosures on homeowners immediately before their short sale closing. However, the new law, SB321, prohibits the foreclosure process from continuing while an alternative recovery method is pending. If a borrower is current on his or her duty to pay under a preventative and alternative method, the foreclosure process cannot be initiated. Specifically, the substitute process must end before the lender or bank can continue with the foreclosure.
In addition to the rules on double tracking, the law includes other benefits. For example, other provisions include a mandate that servicers provide the homeowner with information about foreclosure prevention alternatives at least 30 days before the recording of a default notice or initiating judicial foreclosure. Moreover, another portion of law does not allow foreclosure proceedings unless a servicer follows through will all requirements for reaching out to struggling borrowers.
Sources suggest that the law will allow more Nevadans to qualify for loan modifications with the security. People will be able to remain in their homes as they attempt to recover from financial disaster.
The poor economy has taken a toll on Nevada and the rest of the nation. However, difficult times to do not warrant shoddy practices among financial institutions and other lenders. Hitting someone when he or she is already down is simply unethical. This is especially true when the person is making efforts to recover. Fortunately, part of the law creates civil remedies to penalize lenders that materially violate one of the rules outlined in SB321.
If you are struggling to fight foreclosure, know that you do have options. To learn more, contact an experienced bankruptcy law attorney in your area.
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