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Beware of Dual-Tracking to Foreclosure
October 12, 2012
by Dan McGookey, Foreclosure defense attorney - Ohio In one of the most recent versions of mortgage fraud in the securitized home loan business, loan servicers have started to use the National Mortgage Settlement (“NMS”) aka the “robo signer settlement”, as a means to sharpen their skills at debt collection by perfecting a technique known as “dual tracking”. Dual tracking is the time-tested method used by the greed-driven banks whereby the loan servicer deliberately misleads the unwitting homeowner into believing it is trying to work with the homeowner to keep him or her in the home, while at the same time, and in reality, working with its lawyers to take the home away. It is a method fundamentally based on deception; deception of the homeowner, that is. Ironically, the NMS, meant to both punish the nation’s five largest servicers for their wrongful conduct in using fraudulent documents in prosecuting foreclosures, and to provide redress for those victimized by such conduct, has now been turned into an opportunity for those same wrongdoers to resume their illegal activities in an even more effective way. In a world where it is profitable to foreclose, these banks will stop at nothing to drive up their bottom lines, even if it means wrongfully dispossessing millions of families from their homes. How does the NMS provide cover to these banks to further perpetrate their fraud? Generally what happens is that the bank (GMAC/Ally for example), will send a letter to a financially distressed homeowner, posturing itself as the “white knight”, there to offer the homeowner substantial mortgage relief in the way of principal balance reduction, or a reduced interest rate, under the guise that the offer is part of the NMS. The problem is the homeowner targeted to receive this sort of offer is already in the “cross hairs” of the foreclosure-minded servicer, and the servicer knows that the relief offered is too-little, too-late for the homeowner. At the same time the servicer makes the bogus offer of mortgage relief to the borrower, it ratchets up the pressure on him or her by directing its lawyers to move the foreclosure process along. The deception comes into play when the desperate homeowner believes the bank wants to work with him rather than foreclose, thereby “letting his guard down”, and not actively challenging the bank in the legal process. Like prey going for bait in a trap, the unsuspecting homeowner is ensnared in the foreclosure process by going after the bait which appears to be mortgage relief. Don’t take the bait! Avoiding the Foreclosure Trap In the lead story this week, we talked about the how the Wall Street Banks have actually turned a lemon (the National Mortgage Settlement) into lemonade for themselves, through a loan collection process known as “Dual Tracking”. This is another example of why homeowners must be ever vigilant when defending their homes. Once the foreclosure process has begun, it is almost certain that the bank will not stop it by giving the homeowner a good faith chance to succeed in paying on the mortgage. Remember this cardinal truth at all times – chances are your bank wants you to fail because, in the world of securitized mortgage lending, it is profitable to foreclose.
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