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#2113717 - 01/10/17 03:03 PM 120 day foreclosure rule - 1024.41(f)
scottb Offline
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Registered: 09/28/06
Posts: 71
I seem to remember the CFPB clarifying what constituted being "120 days past due" back in the Fall. I cannot seem to find the citation now. Was it a loan 120 days late based on the due date? or was it a loan that had been consistently past due for 120 consecutive days (i.e. loan due for 9-30-16 on 11-30-16 BUT the loan hadn't been current with all interest and princ 7-30-16)?
Any citation would be appreciated.

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Mortgage Servicing Rules
#2113718 - 01/10/17 03:12 PM Re: 120 day foreclosure rule - 1024.41(f) [Re: scottb]
Norman Paperman Offline
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#2114711 - 01/19/17 11:28 AM Re: 120 day foreclosure rule - 1024.41(f) [Re: scottb]
RR Joker Offline
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Registered: 11/15/02
Posts: 18489
Loc: The Swamp
So in essence...if a customer continually stays 90 days behind...they will avoid foreclosure due to the fact they continue to make a payment before they become 120 days ...I believe that is the correct interpretation of 'until no payment is" due? IOW, not the cumulative number of days in a 'delinquent' status.


Edited by RR Joker (01/19/17 11:31 AM)
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#2114734 - 01/19/17 12:54 PM Re: 120 day foreclosure rule - 1024.41(f) [Re: scottb]
MBTCompliance Online
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Registered: 04/18/15
Posts: 187
Just to clarify others' opinions:

If property taxes are not paid in accordance with contract and/or mortgage, we cannot foreclose if the borrower is not 120 days delinquent on their regular payments. Therefore, we must accelerate and if not brought current within 120 days, we can foreclose.

"Although a breach other than the failure to meet the periodic
payment obligation will not begin a period of delinquency under the specified mortgage
servicing provisions, a servicer may be able to exercise its rights to accelerate payment for such a
breach if permitted by the mortgage loan contract and other applicable law. The 2016 Mortgage
Servicing Rule does not prohibit a servicer from accelerating the mortgage loan in such
circumstances. If a servicer properly accelerates a mortgage loan, the periodic payment used to
calculate the period of delinquency is the total amount due after acceleration. However, if the
borrower reinstates the mortgage loan or cures the arrearage following acceleration, the
borrower is no longer delinquent and the delinquency period ends."

However, if the property taxes are so far delinquent that they are being sold at a tax sale, we do not have to wait until they are 120 days delinquent on their regular payments because they would be a superior lienholder.

"The 2016 Mortgage Servicing Rule prohibits a servicer, including a small servicer, from making
the first notice or filing required under applicable law for any judicial or non-judicial foreclosure
process unless: (1) the mortgage loan is more than 120 days delinquent; (2) the foreclosure is
based on a borrower’s violation of a due-on-sale clause; or (3) the servicer is joining the
foreclosure of a superior or subordinate lienholder."

Are my assumptions correct?

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#2115698 - 01/26/17 02:39 PM Re: 120 day foreclosure rule - 1024.41(f) [Re: scottb]
RR Joker Offline
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Registered: 11/15/02
Posts: 18489
Loc: The Swamp
I'm just curious, since the definition has finally been clarified, have any of you changed your policy on accepting/crediting partial payments?
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My opinion only. Not legal advice.

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#2116716 - 02/02/17 11:37 AM Re: 120 day foreclosure rule - 1024.41(f) [Re: scottb]
RR Joker Offline
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Registered: 11/15/02
Posts: 18489
Loc: The Swamp
bump
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