A bank can be engaged (as well as they seem to become engaged) in the process of evaluating your home mortgage loan for modification and at the same time  go after ownership of your residence through judicial foreclosure.

Although Illinois homeowners continue to struggle with their mortgage payments and try to avoid foreclosure, many banks and mortgage companies continue to pursue foreclosures against borrowers seeking loan modifications while the application for modification is still under consideration.   This situation can cause a variety of difficult situations for homeowners.

Homeowners often get a false sense of security when their home mortgage modification is being considered.  They believe that the bank or mortgage company is “working with them” and they will eventually come to reasonable terms which will allow them to retain possession of their residence.  In cases where the lender is simultaneously  pursuing its foreclosure option the lender “keeps the clock running against the homeowner” in regard to the options which homeowners may have for saving their home or for properly using (or extending) the time available for providing alternative housing for themselves and their families.

This highly controversial practice by banks and mortgages is called (among other things) “dual tracking”,  and often works as a “sucker punch” which  punishes trusting homeowners who work to keep their homes. While both federal regulators and various state officials work to curb or ban the practice of dual tracking, Illinois homeowners must be aware that Banks can foreclose on their homes before any loan modification is completed.

This dual tracking  procedure can be particularly difficult for homeowners who do not seek the help of lawyers experienced in this area.  Relying on the advice of friends and acquaintances they may choose not to appear in court on a foreclosure while their mortgage modification proposal is under consideration by their lender or otherwise fail to protect their interests as  a result.  While it may be true that in any given case a court appearance may not be necessary, determining how that fits into any given situation requires extensive knowledge of the applicable law and experience in the area.

Banks can pursue a judgment against you while at the same time considering your application to modify your home loan, failing to protect yourself in court can result in a judgment being entered which will ultimately cost you any rights you have to ownership of  your home, and can result in you being forced to move out of your home unnecessarily or forced to move out under terms which are less favorable to the homeowner than they needed to have been.

Illinois borrowers who are in default on their mortgages and who are considering applying for loan modifications should beware of the practice of dual tracking. Lenders generally make qualifying for loan modifications difficult, and lenders often have two different departments handling the simultaneous loan modification application and foreclosure process.  This can  create more opportunities for miscommunication, or worse, mishandling of your loan modification application. If you are currently in default on your mortgage and would like to know more about your legal rights and options with regard to loan modifications and foreclosures, contact a local experienced foreclosure defense attorney to ensure you are not a victim of this dual tracking nightmare.