My sense is you can send out demand letters within 120 days and threaten foreclosure, you just can “make first notice” (i.e. public notice for judicial or non-judicial foreclosure) or “file for foreclosure” (public filing) until 120 days passes.
Anyone have a take on this?

"A servicer shall not make the first notice or filing required by applicable law"

IMO,If the demand letter isn't required by law to start the foreclosure process it is good to go.

Just make sure threatening someone with foreclosure complies with both ethical standards and any State law.

I concur.

You need to also make sure that the letter does not state or imply that the foreclosure will be initiated prior to the required 120 day period. Otherwise you could open yourself up to a lawsuit for misrepresenting the borrower's rights or regulatory criticism, if not under RESPA then under UDAAP...

Another twist: Borrower was notified prior to January changes that payments plus taxes were delinquent and needed to be brought current. They recently sent in a partial payment, but taxes not paid.

1. Because a partial payment was accepted on payment, does the 120 day count now apply? No grandfather?

2. Or, can we continue with foreclosure because the taxes were not addressed? and, Does the foreclosure due to taxes even come into play on the new foreclosure rules?


I failed to mention, we are a small servicer and we do not escrow. Therefore, taxes can become an issue from time to time.

There's no grandfathering involved in the servicing rules. If you accepted a payment that moved the date next due, you have to count your 120 days from that date.

I can't comment on whether you can initiate foreclosure based on tax delinquency.