Many loan servicers are under the misimpression that the prohibition against dual tracking only applies to loan modifications. This is incorrect; it also applies to forbearance agreements, deeds in lieu of foreclosures and short sales.
My previous article on Debt Collection Consumer Protection described the protections afforded by the Fair Debt Collection Practices Act. There are also numerous other federal, state and local laws which provide additional protections for consumers.
The Fair Debt Collection Practices Act (FDCPA), codified in 15 USC, section 1692, is a federal statute which was enacted to protect consumers from abusive, unfair or deceptive practices by debt collectors.
Many litigation attorneys are very good at what they do - winning cases and obtaining judgments. But once they obtain a judgment, their clients are not always voluntarily paid what they have been awarded, and the judgment must be enforced. In order to do so, the debtor’s assets must first be located so enforcement proceedings can commence.
When a mortgage is foreclosed, not only are the rights of the owners of the property extinguished, but all rights of third parties who have subordinate liens or other interests are extinguished, as well as the property, which will be sold at the foreclosure sale “free and clear” of any such interests.
In order to effectively utilize the courts to collect a debt owed, a creditor must understand the difference between litigation attorneys and collection attorneys.