What does "dual tracking" refer to in mortgage servicing?

"Dual tracking" refers to the practice where a mortgage servicer simultaneously pursues foreclosure proceedings while also considering or processing a borrower's application for a loan modification. This situation can put the borrower at a disadvantage, as they may be working diligently to secure a modification to avoid foreclosure, unaware that the foreclosure process is concurrently moving forward.

This practice has led to regulations by the Consumer Financial Protection Bureau (CFPB) because it often results in entrapment for borrowers—where they may face foreclosure despite attempting to resolve their financial issues through a modification. The intent of the regulations is to protect borrowers by ensuring they have an opportunity to be evaluated for loan modification without the fear of foreclosure being pursued at the same time.