Have You Been Dual Tracked?

Here’s a post from Credit Slips by Katie Porter, law professor and scholar enlisted to head California’s monitoring effort of the mortgage settlement.  She wrote an article that was very prescient as to false documents and robo-signed documents appearing with Proofs of Claim in bankruptcy, Katherine M. Porter, Mortgage Misbehavior, 87 Tex. L. Rev. 121 (2008) (finding evidence of endemic servicer overcharges in bankruptcy cases).

The Mortgage Settlement’s Big Day

posted by Katie Porter

Today, October 2, is the last day for the nation’s five largest mortgage companies to implement the servicing reforms in the National Mortgage Settlement. As California Monitor, I issued my first report to highlight one of the most important changes–restricting dual tracking. Dual tracking is the name given to the race between foreclosure and loan modifications. Because banks control both processes, beyond some specified waiting periods by state law, many families lose the race to get a decision on whether they can save their home with a loan modification. Restrictions on dual tracking are key to avoiding preventable foreclosures and creating fundamental fairness in the foreclosure process.

The report gives some data on dual tracking to bring visibility to this issue. After the jump, I report some bad news and good news on how the Settlement implementation reforms are going.

The California Monitor Program received 224 complaints about dual tracking since the Settlement was announced. The bad news is this clearly understates the degree of the problem. Most families do not file a complaint, and even among the 1,482 total complaints received, some may focus on confusing communication from their banks, meaning my staff doesn’t realize dual tracking is occuring into well into its work to help the family. The good news is the trend line is sharply downward in September. As the chart shows, dual tracking complaints were half as frequent last month.


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