Federal Mortgage LawsQuestion 90 of 400
A borrower submits a complete loss mitigation application 40 days before a scheduled foreclosure sale. Under Reg X, the servicer generally must:
a.Evaluate the application and not proceed to foreclosure sale while it is pending review
b.Ignore the application because foreclosure has started
c.Immediately deny all options
d.Charge a review fee before evaluating
Explanation
Regulation X's loss mitigation procedures generally prohibit a servicer from proceeding to a foreclosure sale (the 'dual tracking' prohibition) while a complete loss mitigation application submitted more than 37 days before the sale is pending evaluation. The servicer must review the application and give the borrower an opportunity to accept or appeal an offer before moving forward.
Law Reference: Real Estate Settlement Procedures Act (Reg X servicing rules)Practice all 400 questions free — no signup required.
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