Suing Mortgage Servicers for Dual Tracking Violations in Oklahoma

Facing foreclosure is one of the most stressful experiences a homeowner can endure, especially when your mortgage servicer appears to be playing games. In Oklahoma, many homeowners find themselves caught in a practice known as dual tracking. This occurs when a lender or mortgage servicer moves forward with foreclosure proceedings while simultaneously negotiating a loan modification, short sale, or other loss mitigation option with the borrower. Although it sounds inherently unfair, it used to be a common industry practice. Today, federal rules strictly regulate this behavior.

The Consumer Financial Protection Bureau (CFPB) has established clear guidelines under federal law to protect homeowners. If you submit a complete loss mitigation application at least 37 days before a scheduled foreclosure sale, your servicer is generally prohibited from conducting the auction. Unfortunately, servicers still make mistakes or deliberately ignore these rules. If you live in Oklahoma City, Tulsa, or Norman, understanding how to enforce your rights at the local court level is critical to saving your home. Finding an experienced local lawyer in our US Attorneys Directory can greatly increase your chances of successfully fighting back.

Step-by-Step Process to Stop Dual Tracking in Oklahoma

Whether your home is located in Oklahoma County or Tulsa County, fighting a dual tracking violation requires swift and precise action. Because Oklahoma is a judicial foreclosure state, the lender must take you to court to take your home. This gives you a platform to raise a defense and stop the process if the lender violates the law.

Step 1: Gathering Evidence of Dual Tracking

The first step is to prove that you submitted a complete loss mitigation application. Gather all correspondence, emails, fax confirmations, and certified mail receipts showing when your application was delivered. You will also need any letters from your servicer acknowledging receipt of your documents. Under 12 C.F.R. § 1024.41, the servicer must acknowledge your application and halt foreclosure activities if it is complete.

Step 2: Sending a Notice of Error

If a homeowner discovers that the servicer has filed a foreclosure petition or scheduled a sheriff's sale while their application is pending, homeowners generally send a formal Notice of Error (NOE) to the servicer's designated address. This formal letter demands that they correct the dual tracking violation. Keep a copy for your records, as this will be vital evidence if you need to litigate.

Step 3: Filing an Injunction in District Court

If the servicer ignores your NOE and the auction date is approaching, you may need to file an emergency motion for a Temporary Restraining Order (TRO) or an injunction. In Oklahoma, injunctions are governed by Okla. Stat. tit. 12, § 1382. You or your attorney will draft a petition outlining the RESPA violations and file it at your local courthouse, such as the Oklahoma County District Court, Oklahoma City or the Tulsa County District Court, Tulsa.

Step 4: Attending the Injunction Hearing

Once your motion is filed, the judge will typically schedule a rapid hearing. You must present your evidence showing that a complete application was pending and that allowing the auction would cause irreparable harm. If the judge agrees, they will issue an order stopping the sale until the loss mitigation process is properly concluded. Precedent such as Deutsche Bank National Trust Co. v. Brumbaugh, 270 P.3d 151 (OK Supreme Court 2012) highlights the importance of strict compliance with foreclosure procedures in Oklahoma.

How Dual Tracking Affects Specific Homeowner Situations

Dual tracking violations manifest differently depending on the type of relief you are seeking. Servicers often use different departments for foreclosures and modifications, leading to dangerous communication breakdowns.

Homeowners in Trial Loan Modifications

If you have been approved for a trial loan modification and are making your trial payments on time, your servicer is strictly prohibited from advancing a foreclosure. Unfortunately, the legal department sometimes continues pushing for a default judgment. Document every trial payment made. If a judgment is entered against you while in a trial plan, you may have grounds to sue for damages and have the judgment vacated.

Borrowers Awaiting Short Sale Approvals

A short sale allows you to sell the property for less than the outstanding mortgage balance. If you have submitted a buyer's contract and a complete short sale package, the servicer must evaluate it before proceeding to a sheriff's sale. If they dual track and auction the home, you lose the opportunity to avoid a foreclosure on your credit report. You may need to file a motion to stay the proceedings at the Cleveland County District Court, Norman if your property is in that jurisdiction.

Individuals Negotiating Forbearance Agreements

Forbearance temporarily pauses or reduces your payments due to a hardship. If you apply for a forbearance and the servicer pushes forward with foreclosure while evaluating your hardship, this constitutes a dual tracking violation. Borrowers are typically required to file an Answer within 20 days of being served with a summons under Okla. Stat. tit. 12, § 2012(A) to avoid a default judgment.

How Much Does it Cost to Fight Dual Tracking in Oklahoma?

Defending against an illegal foreclosure requires budgeting for legal and court fees. While costs vary based on the complexity of your case, here is a general breakdown:

Keep in mind that if you successfully sue a servicer for a RESPA violation under federal law, you may be entitled to recover your attorney fees and actual damages caused by the illegal dual tracking.

How Long Does the Injunction Process Take?

Time is of the essence when facing a foreclosure auction in Oklahoma. If your servicer is actively dual tracking and a sheriff's sale is scheduled, an emergency Temporary Restraining Order (TRO) can sometimes be obtained within 24 to 48 hours. After a TRO is granted, the court will typically schedule a full preliminary injunction hearing within 14 days. A standard foreclosure lawsuit in Oklahoma generally takes anywhere from 4 to 8 months to complete, but asserting a dual tracking defense can significantly extend this timeline, giving you breathing room to finalize your loan modification.

Frequently Asked Questions (FAQ)