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#1843270 - 08/16/13 06:06 PM Foreclosure and waiting 120 days
Carolina Blue Offline
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Carolina Blue
Joined: Jul 2005
Posts: 951
Lost in a regulatory fog
Okay, this may be a stupid question but if a borrower voluntarily "hands over the keys", tells us to start foreclosing, or abandons their house do we still have to wait for them to be 120 days past due to start the foreclsoure process?

I was thinking at that point we can consider it no longer their primary residence, but not sure. Can the borrower waive the 120 days?

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Mortgage Servicing Rules
#1843417 - 08/16/13 10:05 PM Re: Foreclosure and waiting 120 days Carolina Blue
rlcarey Offline
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rlcarey
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Galveston, TX
If they want to turn in the keys, then they should voluntarily deed the property over to you to eliminate the foreclosure process altogether. It is called a "Deed in Lieu".
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#1843715 - 08/19/13 07:12 PM Re: Foreclosure and waiting 120 days Carolina Blue
POWFNB Offline
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RLCAREY, deed in lieu is not always the best option for the bank due to other potential lien issues. Carolina, I have a similar question related to non-payment of taxes, tax lien lender loan, or other deed covenant defaults. Is the 120 day waiting period required only if payment delinquency is the sole event of default?

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#1845920 - 08/26/13 06:12 PM Re: Foreclosure and waiting 120 days Carolina Blue
pacar Offline
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Posts: 320
I think the bureau has clarified the definition. From page 379 of the rule:

The Bureau has clarified the meaning of delinquency in commentary in a manner
substantially similar to the late payment trigger that was proposed in § 1024.39(b). Accordingly,
in the final rule, § 1024.39(a) requires a servicer to provide the written notice not later than the
45th day of “a borrower’s delinquency.” Comment 39(b)(1)-1 contains a cross-reference to
comment 39(a)-1, which generally explains that delinquency begins on the day a payment
sufficient to cover, principal, interest, and, if applicable, escrow for a given billing cycle is due
and unpaid, even if the borrower is afforded a period of time after the due date has passed to pay
before the servicer assesses a late fee. The cross-reference also clarifies that a borrower is not
delinquent for purposes of § 1024.39 if the borrower is performing as agreed under a loss
mitigation option designed to bring the borrower current on a previously missed payment.

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#1845927 - 08/26/13 06:17 PM Re: Foreclosure and waiting 120 days Carolina Blue
pacar Offline
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Posts: 320
Also looking for ways out of the 120-day requirement ... do we still have to wait to foreclose if the property is confirmed to be adandoned? I am scanning the rule looking for any indication that there is an exception, but I'm not finding one.

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#1846056 - 08/26/13 08:31 PM Re: Foreclosure and waiting 120 days pacar
Carolina Blue Offline
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Carolina Blue
Joined: Jul 2005
Posts: 951
Lost in a regulatory fog
Not sure how it will fly with examiners, but if you can document the property is abandoned then you can say it's not a primary residence and the new rules don't apply?

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#1846099 - 08/26/13 09:53 PM Re: Foreclosure and waiting 120 days POWFNB
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 77,622
Galveston, TX
RLCAREY, deed in lieu is not always the best option for the bank due to other potential lien issues.

I never said it was a great idea - I was just explaining what it was called. Naturally, they should be visiting with legal counsel on any such actions.
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#1856215 - 09/26/13 09:48 PM Re: Foreclosure and waiting 120 days POWFNB
ndbanker Offline
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Joined: Jan 2006
Posts: 68
I didn't see a response related to the question as to whether the 120 waiting period applies to defaults due to reasons other than delinquency, such as nonpayment of insurance and taxes (when not escrowed), transfer of ownership issues, cross default or death. I am struggling to find any discussion of other default reasons.

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#1858914 - 10/04/13 10:02 PM Re: Foreclosure and waiting 120 days ndbanker
Puzzled Offline
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The CFPB made some revisions to the Mortgage Servicing Rule on 9/13 that amend Section 1024.41(f)(1)giving two exceptions to the 120 day rule: (1) When the foreclosure is based on a borrower's violation of a due-on-sale clause (2)When the servicer is joining the foreclosure action of a subordinate lienholder.

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#1862269 - 10/17/13 04:11 PM Re: Foreclosure and waiting 120 days Carolina Blue
Kim M. Offline
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Joined: Oct 2005
Posts: 129
Kansas
Did the 9-13-2013 changes allow for a small servicer to file for foreclosure prior to 120 days delinquent?

Thanks

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#1873642 - 11/22/13 04:55 PM Re: Foreclosure and waiting 120 days Kim M.
Tarhe Offline
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Joined: Nov 2006
Posts: 1,200
California
Kind of related question: If the 120-day period has started in the foreclosure process, and say at 90 days, the borrower asks us for a modification, does the 120-days start over? Or can the 120-days continue while we review his request? Or do we flat out deny the request? How does the dual tracking piece fit into this scenario? Is this not considered dual-tracking because we are well down the path of foreclosure?

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