A borrower submits a complete first lien loan modification application on 2 June. The servicer records a notice of sale on 9 June. Assuming the loan and application qualify for section 2923.6 protection, may the servicer record the notice while the complete application is pending?
Correct Answer
A) Dual tracking: no notice of sale while a complete application is pending
While a complete first lien modification application is pending, the servicer may not record a notice of default or notice of sale or conduct a sale: that is the dual tracking the Homeowner Bill of Rights prohibits. Other choices: recording the notice is the prohibited act rather than the sale itself; the timing exception runs the other way; and approval is not what triggers the protection. Source: Cal. Civ. Code § 2923.6(c)
Why This Is the Correct Answer
While a complete first lien modification application is pending, the servicer may not record a notice of default or notice of sale or conduct a sale: that is the dual tracking the Homeowner Bill of Rights prohibits. Other choices: recording the notice is the prohibited act rather than the sale itself; the timing exception runs the other way; and approval is not what triggers the protection. Source: Cal. Civ. Code § 2923.6(c)
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