After the first required foreclosure notice or filing, a servicer receives a complete loss mitigation application on March 3. The scheduled sale is April 20, 48 days later. Section 1024.41(g) applies, the application remains pending, and none of its sale-release conditions has occurred. May the servicer conduct the sale?
Correct Answer
D) No sale may be conducted while the 3 March application is pending
D. The servicer may not conduct the sale in these circumstances. Forty-eight days exceeds the more-than-37-day threshold. Scheduling the sale before receipt does not defeat the applicable protection. Scope and exceptions: The rule identifies possible release conditions involving ineligibility and applicable appeal treatment, rejection of all offers, or failure to perform an agreement. It does not freeze every procedural step or guarantee a modification. Other requirements may independently restrict a sale. Source: Section 1024.41(g)(1)–(3); comments 41(g)-2 and -5 — https://www.consumerfinance.gov/rules-policy/regulations/1024/41/
Why This Is the Correct Answer
D. The servicer may not conduct the sale in these circumstances. Forty-eight days exceeds the more-than-37-day threshold. Scheduling the sale before receipt does not defeat the applicable protection. Scope and exceptions: The rule identifies possible release conditions involving ineligibility and applicable appeal treatment, rejection of all offers, or failure to perform an agreement. It does not freeze every procedural step or guarantee a modification. Other requirements may independently restrict a sale.
Why the Other Options Are Wrong
Option A: The sale proceeds if the servicer answers the application by 13 April
A response alone does not establish a permitted basis to sell.
Option B: No sale may be conducted, because 48 days is under the 60-day minimum
The conclusion uses an invented 60-day threshold.
Option C: The sale proceeds, as it was scheduled before the application
It ignores the post-filing protection.
Exam Tip
Distinguish the sale prohibition from both evaluation duties and entitlement to relief.
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