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The COVID-19 pandemic had massive economic implications across the country, many of which are still being felt today. 

Millions of homeowners fell behind on their mortgages, and while they received temporary relief through federal sponsored programs and legislation, those moratoriums have since ended.

In that time period, there’s been a surge in confusion surrounding loss-mitigation. Since 2020, the phrase “dual tracking”has become one of the most searched-for mortgage topics.

In 2024, the Consumer Financial Protection Bureau received more than 2.8 million complaints, and mortgages were among the top categories consumers reported about.

In this article, we’ll discuss in more detail what dual tracking is for mortgage foreclosures, as well as the rules and regulations surrounding it

What ‘Dual Tracking’ Actually Means in Plain English

Dual tracking is a process by which a mortgage loan servicer proceeds with a foreclosure while they review an application for loss mitigation at the same time.

During the housing crisis in the early part of the 2000s, dual tracking was unfortunately a common practice, which resulted in many homeowners being blindsided. Some had worked out loan modifications over the phone and then found out that their home was sold at auction anyway.

This was an unfair practice that federal regulators took notice of as the housing crisis slowed down.

Regulation X/RESPA Basics: The Federal Rules That Police Dual Tracking

The Real Estate Settlement Procedures Act (RESPA) first went into effect in June 1975. The federal law was first published by the Department of Housing and Urban Development (HUD), which at the time also published what’s known as Regulation X.

Essentially, RESPA requires that all mortgage brokers, servicers and lenders provide borrowers with timely and pertinent disclosure about the costs and nature of all steps in the home buying settlement process. It also prohibits kickbacks and places limits on how escrow accounts can be used.

Following the housing crisis, the CFPB established the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, which took effect in early 2014. It revised Regulation X, adding protections for borrowers such as prohibiting the use of dual tracking.

According to the federal rules, all mortgage services have to pause any foreclosure action the moment a borrower requests financial assistance and formally completes an application.

While Regulation X doesn’t guarantee that borrowers will receive a loan modification, it does guarantee them the right to have their application reviewed by the servicer in a fair and timely manner. 

The Dual Tracking Timeline in Numbers: 120/45/37/30/14

Each state has the ability to create their own foreclosure rules and regulations, but all must abide by Regulation X. Part of this includes establishing a timeline for what happens during the foreclosure process.

Here are some of the important timelines in the process, as they relate to foreclosure and loan modification …

30: A loan service must evaluate borrowers for all available options and send a written decision within 30 days of receiving a complete application for loan modification or financial assistance.

37: If a borrower has completed an application more than 37 days before a sheriff’s sale, the mortgage service can’t conduct the sale, move for an order of sale or judgment while that application and any timely appeal is pending.

14: If a borrower completed an application more than 90 days before a sheriff’s sale, they get an appeal right. The servicer can’t foreclose on the home until the borrower’s appeal is decided and they’ve had at least 14 days to accept any offer.

45: If a foreclosure sale hasn’t yet been scheduled on the date when the loan servicer receives an application for loss mitigation, they must then treat that application as having been received 45 days or more before any foreclosure sale. This triggers written notice and document check rules.

120: The servicer can’t issue a foreclosure notice or official filing until a borrower is more than 120 days delinquent on the loan.

When Dual Tracking is Flat-Out Prohibited Under Regulation X

When a borrower has completed an application for loss mitigation, protections from foreclosure kick in under Regulation X. If the borrower’s application is incomplete, the loan servicer typically has more flexibility and the borrower has fewer protections under the law, though some changes in the law are working to change this.

For completed applications, the servicer is prohibited from moving forward on a foreclosure judgment or order of sale, and cannot conduct a serif’s sale. 

Loan servicers can move forward with the foreclosure process if the loss mitigation application was received 36 days or less before the sheriff’s sale, if the borrower rejects all the options offered to them, and if the borrower fails to meet a loss mitigation or trial plan agreement.

What Services Must Do on Time When You Apply for Help

Once a loan servicer has received an application for loss mitigation, they must provide an acknowledgement letter within five business days. This letter must outline whether the application is complete or not, what’s missing and a reasonable date by which the borrower must supply required documents.

Within 30 days, the servicer must complete a full evaluation of the application, including testing the borrower against all investor-approved options such as loan modification, repayment plans, forbearance and deferral.

If the application is denied, the servicer must provide clear reasons for the denial and provide the borrower with the timeline they have to appeal the decision, which is often at least 14 days.

How to Spot (and Prove) You’re Being Dual-Tracked

If you believe that you’re being dual-tracked, it’s important to look for common signs and gather proof so you can protect your interests and rights.

First, look for red flags in the mail and in your online account history. This could include sheriff’s sale dates that were set or changed after you completed your application, or motions for judgments that were filed while you were on a trial plan or pending review.

Compare the foreclosure timeline, including your payment history and the foreclosure steps that the servicer has taken.

Collect a paper trail to back up your points, including call logs, letters you’ve sent and received, screenshots in your account portal and payment receipts.

Legal Tools to Challenge Dual Tracking in Real Life

Borrowers can challenge dual tracking by sending a Notice of Error to the loan servicer. This notice must include the borrower’s name, information that will indicate the loan account such as a loan number, and an explanation of the error the borrower believes has occurred.

In this letter, you should specify the error and how it applies to federal laws 12 C.F.R. § 1024.35 and § 1024.41(g). Include supporting details such as copies of work, dates and times you spoke with someone at the company and their name, and any other relevant information.

Under Regulation X, servicers are required to submit a written response to the borrower within five business days acknowledging that they’ve received the error notice. The servicer can request additional information from the borrower as a condition to investigate it.

You can also file an online complaint with the CFPB, which will then route the issue directly to the company. Companies then generally respond directly to you within 15 days, but some will notify you that they are in the process of doing so and may take up to 60 days.

If your efforts are still unsuccessful at stopping dual tracking, you can request that a judge issue an injunction or stay of the sheriff’s sale based on violations of Regulation X. You can sue under RESPA’s private right of action, including potential statutory and actual damages plus attorney’s fees.

What to Do if Your Home Was Sold While a Mod Was Pending

If your home was sold at a sheriff’s sale while a loan modification was pending, there are some important steps that you should take to protect your rights.

First, check if your application was actually “complete” according to the definition outlined in Regulation X. Gather proof that your loan servicer moved for a judgment or held the sheriff’s sale despite you filing a complete application in a timely manner.

Quick legal action is essential if a wrongful sale has already happened to prevent the home from being taken from you illegally.

How Babi Legal Group Uses the Numbers and Rules to Protect Homeowners

Stopping dual tracking can be a complicated and complex process for borrowers. That’s why it’s always best to consult with an experienced lawyer such as the attorneys at Babi Legal Group.

We help our clients facing dual tracking audit the foreclosure timelines, lining up delinquency dates, application dates and sale dates against the legal framework. We identify Regulation X violations and build a record for the court or negotiation directly with the servicer.

We can help coordinate loss mitigation, litigation and bankruptcy (if necessary) to stop wrongful foreclosures and dual-tracking behavior.

To learn more about how we can help you, contact us today.

You’re Not Out — Michigan Redemption Rights Explained (What You Can Still Do After Foreclosure)

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Financial difficulties can lead to major problems and headaches if you’re unable to make payments. This is especially true with mortgages, as lenders can foreclose on borrowers homes and take possession of them once repayments are missed.

Part of the foreclosure process in Michigan involves a Sheriff’s Sale, during which the home is put up for sale through an auction process, with the highest bidder becoming the new owner of the property.

However, this is not the end of the line for borrowers, even though many Michigan homeowners might think so. Thanks to Michigan’s redemption period, borrowers can still reclaim their homes even after a sheriff’s sale has taken place.

So, while a sheriff’s sale might cause quite the psychological shock, Michigan’s laws protect homeowners, allowing them to not lose their homes even after the auction ends.

In this article, we’ll explain in more detail the foreclosure and redemption process in MIchigan.

What the Sheriff’s Sale Actually Changes (And What It Doesn’t)

Up until the actual Sheriff’s Sale takes place, the homeowner can still submit an application for loss mitigation. If that doesn’t happen, the Sheriff’s Sale will take place, at which time an auction will be held for the property.

The Sheriff’s Deed will list the last day that the property can be redeemed. 

The immediate thing that the completion of a Sheriff’s Sale does in Michigan is sell the property to a new owner. That owner (who is the winner of the auction) will receive the Sheriff’s Deed, which constitutes the legal change in title.

If no one purchases the property, it will be labeled REO, or Real Estate Owned. At this point, the borrower’s credit report will reflect the foreclosure.

Most importantly, though, the end of a Sheriff’s Sale starts the redemption period in Michigan.

What a Sheriff’s Sale doesn’t immediately change is the homeowner’s rights to the property. No homeowner is evicted from the property at this point, and they still have the option to regain ownership of the property.

Homeowners also generally are allowed to retain complete possession of their home through the entire redemption period, which we’ll discuss in more depth in the next section.

In other words, while the purchaser of the home at Sheriff’s Sale is the technical owner of the home at this point, they aren’t free and clear.

Your Statutory Rights to Stay in the Home During Redemption

A Sheriff’s Sale in Michigan doesn’t allow the buyer to legally remove the homeowner from the property. They are typically allowed to live in the property during the redemption period, and they’re not required to make payments anymore.

During this period, the homeowner does, however, need to maintain property insurance, maintain the utilities and the property itself if they are going to live in it. 

In addition, the homeowner has to allow the new purchaser to inspect the home and all of the structures on the property during the redemption period. 

Homeowners have to file a sworn Affidavit of Occupancy, which is filed with the county clerk, during the redemption period. This will prove that they are continuously living in the home, which protects their rights to live in it during the redemption period and to eventually redeem it if they want.

If this affidavit is not filed, state law (MCL 600.3241) will presume that the property is abandoned, which gives the owner rights to take possession of the property — even if the redemption period hasn’t ended.

Understanding the Michigan Redemption Clock

Michigan’s redemption period begins the day that the Sheriff’s Sale is held. In most cases, it will last for six months from this time.

There are some instances in which the redemption period can be extended to up to 12 months. For instance, farming property can qualify for this extended period, and so can any property if the amount that is still due on the mortgage is less than two-thirds of what the original amount owed was.

The redemption period can become shorter, though, if the property is found to be abandoned. This can happen if the homeowner actually leaves the property, if they do not file the sworn Affidavit of Occupancy, if they cause damage to the home or if they refuse an inspection of the property, for example.

What You Can Legally Do During the Redemption Period

Michigan homeowners still retain a lot of rights during the redemption period. They can sell the property, for example, through an investor sale, a traditional sale or by assigning redemption rights.

This can be a complicated process, though, that often requires the property to be sold for more than the auction price.

Homeowners can still figure out ways to redeem the home, either by paying off what’s due on the mortgage or refinancing the loan and use the remaining equity as part of the redemption.

They can also negotiate with the purchaser or lender to gain redemption support, extensions or a cash-for-keys agreement.

It’s even possible that homeowners can challenge some of the lender’s conduct leading up to the Sheriff’s Sale, or deficits in notice and posting of the sale.

Buyer Inspection Rights & Your Privacy

Homeowners who are foreclosed on have privacy rights in MIchigan, though they must require the Sheriff’s Sale buyer to inspect the interior of the home and any structures on the property.

The buyer, though, must provide the homeowner with written notice detailing the inspection and give them at least 72 hours notice that they want to do so. They also must coordinate the day and time with the homeowner. 

The buyer also has a right to get information on the property once per month during the redemption period. If they don’t get a response from the homeowner, or if the buyer believes that damage has been done, then they can seek to gain possession of the home early through the courts.

What the Servicer or Investor Can and Cannot Do During Redemption

Servicers or investors are not allowed to force the homeowner to move out early, nor are they allowed to arbitrarily force early eviction — or make threats to do so. As mentioned, they even must give proper notice for property checks and inspections.

If the homeowner believes their rights have been violated and contact from a servicer crosses the line into unlawful pressure, they can file notice with the courts. They’ll likely have to prove the improper behavior happened, through submitting any documentation they have about it.

If You Want to Redeem: How the Math Works

To redeem a property, homeowners must pay the full Sheriff’s Sale price, plus interest and all allowable fees. This must be done in full, though it can be financed through another mortgage or loan, if the homeowner is able to obtain one.

In almost all cases, buyers demand to receive certified funds only. That’s because they want to ensure that the funds being sent to them are indeed there.

The End of Redemption: What Happens When the Clock Runs Out

When the redemption clock has run out in Michigan, homeowners will receive an official summons to appear in court. This is an eviction case, and will only be scheduled and held if the homeowner hasn’t already left the home on their own.

During this hearing, the court will set a date that the Sheriff will go to the home to physically remove the homeowner from the property, if necessary. Any personal property that the homeowner has is theirs to take with them, though if any is left behind after they’re evicted, it becomes the legal possession of the buyer.

After the redemption deadline has passed, it’s possible for homeowners to still negotiate with the buyer, but it’s very rare. This emphasizes how important it is to redeem the property during the period if that’s something you want to do.

How Babi Legal Group Helps Homeowners During Redemption

The foreclosure process can be complicated in Michigan. Understanding your rights during the entire process, including the redemption period, is essential to protect your interests.

If you’re facing foreclosure or are already in the redemption period, it’s important to consult with an experienced foreclosure lawyer like the ones at Babi Legal Group.

Our expert attorneys can interpret the Sheriff’s Deed and calculate your real timeline, stop illegal conduct and help enforce your right to stay in the home. We can negotiate with buyers, investors and lenders to maximize your options, and prepare strategies for selling, redeeming or defending possession of the property.

For a free consultation, please contact us today.

How to Get Unclaimed Money in Michigan: A Simple Guide for Residents

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Every year, billions of dollars of money goes unclaimed in Michigan. In fact, as of early 2025, there was more than $2 billion worth of unclaimed money in the coffers of the state.

A sizable portion of this total, $189.6 million in fact, is held in more than 17.6 million properties, each worth $50 or less.

This illustrates the fact that residents of Michigan are letting their rightfully-owned money be held by the state each year. Luckily, there is an easy way to get whatever money is yours.

In this article, we’ll explain what unclaimed money in Michigan is, and how you can find out if you have any — and the steps to take to claim it.

What is Unclaimed Money in Michigan?

Unclaimed money is essentially any financial asset that has been abandoned or forgotten. It can include things such as refund checks, insurance payouts, unused gift card balances or old bank accounts.

When these funds go unclaimed, the business that holds them has to legally try to contact the owner to give it to them. There are specific rules that require companies to report and transfer financial assets after a period of inactivity.

Once they’re unable to reach that person for a certain period of time, though, they have to turn the assets over to the state.

At this point, the State of Michigan is responsible for holding onto those financial assets temporarily until the rightful owner comes forward to claim them.

How to Search for Unclaimed Money in Michigan

Like many other states, Michigan’s Department of Treasury has an easy-to-use online system that allows you to search for any unclaimed money that the state may owe to you.

By visiting the state’s site, you can easily search your name to see if the state is holding any unclaimed money on your behalf.

Once you’ve arrived at the site, you only need your full name to conduct a search. Additional details that you provide — such as the city and/or Zip code of the place you reside — can help to narrow down the results, especially if you have a common name.

Keep in mind that if you have lived in multiple locations in Michigan, you may have unclaimed funds associated with more than one address..

The state’s unclaimed property site also allows you to look up funds that might be owed to deceased relatives. Of course, you’ll need to have the proper documentation to move forward and claim them, if you find any.

How to File a Claim for Unclaimed Money

After you perform the search on the state’s website, it will produce any results of unclaimed money that are associated with your name. You’ll first want to verify that the results are actually meant for you, and not someone else who shares your name.

If you believe that the funds are indeed yours, you can move onto the next step in the process. This involves going through a short verification process that will ensure that you are the rightful owner of the unclaimed property.

You may need to provide information such as a Social Security number, driver’s license number or other form of acceptable government ID. Depending on the type of property you are claiming, you may need to provide proof of address or a document that shows your past affiliation with the business that held the funds.

The processing times vary once you’ve completed the verification, but most claims are resolved within a few weeks.

How Michigan Protects Your Unclaimed Money

A common question people have is how does the state of Michigan protect your unclaimed money while they hold it? Per state law, the Department of Treasury has to keep your funds safe until either you or your heirs file a proper claim.

The state also has to hold the unclaimed assets indefinitely. In other words, they never “expire;” you or your rightful heirs can always claim them.

By putting a proper verification process in place, the state ensures that no one else can falsely or fraudulently claim your money.

After you’ve completed the process, you can get online updates about where your claim stands on the state’s website.

Tips to Prevent Your Money from Becoming Unclaimed Again

While it’s great that you can regain possession of your financial assets, it’s best to ensure that the state doesn’t come into possession of them in the first place. By following some simple habits, you can make sure that your financial assets are always in your contract.

First, make sure that your contact information is always up to date. Many unclaimed property cases occur because the business that holds them simply is unable to reach you.

You should regularly check-in on old financial accounts and insurance policies so they don’t become inactive or abandoned.

It’s also a good idea to conduct a quick annual search of the state’s unclaimed funds site so you can catch newly-reported funds quickly.

When You Might Need Legal Help

The state’s unclaimed funds process is simple. In some cases, though, you may need additional support from an experienced Michigan lawyer.

For example, large claims or those that involve estates can get quite complicated. These often require providing legal documents to the state that prove your authority over the unclaimed funds.

An attorney can also help challenge any incorrect denial or clarify ownership issues over the financial assets. By get the property legal support, you’ll be ensuring that your claims are processed quickly and properly.

Final Thoughts: Unclaimed Money in Michigan is Easy to Recover

Millions of cases of unclaimed funds are held by the state of Michigan. Luckily, a simple online search and providing basic documents and information is all that most residents need to reclaim forgotten funds.

Most people will be able to use the state of Michigan’s official search tool to find their unclaimed funds and claim them fast. It’s a completely free tool to use and is simple to understand.

You can speed up the process and ensure proper and prompt delivery of your funds by preparing ahead and gathering the necessary documents. Then, by following small habits, you can ensure your money never gets “lost” again.

If you need assistance with more complicated unclaimed funds cases, enlist the help of the lawyers at Babi Legal Group. We have years of experience helping residents prove their authority over unclaimed funds in Michigan and can help you do the same.

Contact us today to learn more.

What Happens to My EIDL Loan if My Business Closes?

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During the COVID-19 pandemic, the Small Business Administration (SBA) rolled out an expansion of an existing loan program meant to help small businesses that were suffering financially from a disaster.

Known as Economic Injury Disaster Loan (EIDL) loans, the program provided much-needed financial support to business owners who were struggling as a result of the pandemic. 

While EIDL loans offer favorable terms including low interest rates, high limits and longer repayment periods, they do have to be repaid — unlike the other popular SBA loan program from the time, the Paycheck Protection Program (PPP).

Some small businesses continued to struggle despite taking EIDL loans, and some even had to shut down.

But, closing your business does not automatically erase your EIDL loan. As such, it’s vital to know how the SBA responds in these situations.

Does the SBA Automatically Discharge the Debt?

Borrowers who are still struggling to fully recover from the pandemic need to know how financial hardship factors into the SBA’s collection decisions.

EIDL loans  are not automatically discharged just because a business folds. Like many other types of loans, there is no loan forgiveness associated with this program.

In fact, some borrowers are personally liable for the amount they borrowed, depending on how large the loan was.

If you close your business, the SBA will evaluate several factors to decide whether they want to pursue the outstanding balance on your loan. This includes things such as the amount you borrowed, what collateral you put down (if any) and any personal guarantee you were forced to sign. 

Are You Personally Liable for the EIDL Loan?

It’s very important to understand personal liability because it can determine whether your own personal finances, and not just the business’, are exposed if you can’t repay. 

For EIDL loans, your personal liability likely depends on the total amount of the loan you took. 

For loans of $200,000 or less, the SBA typically didn’t require borrowers to put a personal guarantee on the loan. This might limit your personal liability, depending on your loan agreement.

Larger EIDL loans of more than $200,000 almost always involve personal guarantees and/or collateral. This means that the SBA has the legal right to pursue you personally for repayment of any outstanding balance.

What Happens if You Stop Making EIDL Payments?

Similar to how other loans work, if you miss an EIDL repayment, it can trigger a structured federal collections process. Understanding the details of this process is crucial — before the default occurs — so you can know your rights.

As a government agency, the SBA is required to follow a multi-step process once repayments are missed. This includes sending notices of missed payments to borrowers to formally filing default.

Defaulted SBA loans can be sent to the Treasury Department, which has the power to seize tax refunds and certain federal payments. In other words, they can prevent you from getting a tax refund in order to collect the money that you owe them.

Depending on your loan and whether you put a personal guarantee on it, the government may be able to place a lien on your assets such as vehicles and your home even after your business closes.

Options if You Cannot Pay Your EIDL Loan

So, what happens if you are having trouble repaying your EIDL loan?

Until early in 2025, the SBA offered the Hardship Accommodation Plan (HAP), which allowed borrowers to temporarily reduce their payments. However, this program is no longer available.

Luckily, there are several relief paths available, so understanding them will help you choose the best strategy for your financial situation.

One option could be loan modification. Sometimes, the SBA will adjust the repayment terms, extend your repayment timelines or reduce your monthly obligations based on need.

Borrowers who are facing severe financial hardship might qualify to settle their loan for a reduced lump sum. The SBA will evaluate each application for an offer in compromise (OIC) on an individual basis.

If none of those options are viable for you, it’s possible that filing for bankruptcy could eliminate your personal liability tied to EIDL loans, or allow you to restructure it — depending on what type of bankruptcy you file.

Can EIDL Loans Be Discharged in Bankruptcy?

How EIDL loans are treated in bankruptcy varies from one case to the next. So, understanding what can and cannot be discharged is essential before you file.

Chapter 7 bankruptcy, designed for individuals, may eliminate personal liability on EIDL loans if you meet certain qualifications.

Through Chapter 13 bankruptcy, you can reorganize your debts, including any EIDL-related liabilities, through a repayment plan that you can afford.

Chapter 11 or Subchapter V bankruptcy are made for businesses. They are both reorganization bankruptcies, and could help if your business has any remaining assets or debts tied to your EIDL loan. 

Depending on the type of bankruptcy you file, as well as your overall financial picture, you may have to surrender collateral or negotiate in order for your outstanding loan to be fully discharged.

How Lenders and the SBA Treat Closed Businesses

After a business closes, the SBA has specific expectations for outstanding EIDL loan amounts. Meeting those expectations can help borrowers reduce potential financial consequences.

Once a business has closed, the SBA requires certain documentation, including dissolution records, a list of assets, recent tax returns and other proof that verifies the business is no longer in operation.

Dissolving your LLC, corporation or other business entity the right way can help to prevent unexpected administrative issues and future liabilities. 

By following recommended legal steps, you can minimize the risk of future disputes or collections.

When You Should Speak with a Michigan SBA Loan & Bankruptcy Attorney

If you are facing trouble repaying your EIDL loan, it’s important to consult with a local attorney who can help you navigate the complicated SBA processes and protect your personal finances in the meantime.

Some common signs that you should seek legal help immediately are if you’ve been threatened with a Treasury offset, if aggressive collection efforts have begun, and/or you have overwhelming debt that you can’t control.

Experienced attorneys can negotiate with the Treasury or SBA, securing you better terms, lower settlements and even protection through bankruptcy strategies. 

It’s very important to seek out an attorney who’s familiar with the Michigan court system in addition to the SBA processes, as they can provide more effective guidance that’s tailored to local laws.

Final Thoughts: You Have Options, Even if Your Business Didn’t Survive

Losing a business can be very difficult, but you still have several legal paths that can protect your financial future. From modifications to settlements, there are many different ways you can reduce or eliminate any debt burdens you still have.

It’s important to be proactive and take strategies that will minimize your risk and safeguard your income and personal assets.

At Babi Legal Group, our experienced attorneys can offer expert legal support designed to help Michigan borrowers navigate EIDL challenges with confidence.

To learn more, please contact us today.