“Mortgage servicers will face greater limits on their ability to foreclose on a borrower while simultaneously negotiating a loan modification under new rules issued by the U.S. Consumer Financial Protection Bureau,” Bloomberg’s Carter Dougherty reports.

The new rules “go further” than the bureau’s first proposal did to restrict the practice known as dual-tracking, the story continues, noting that AFR had asked the agency to rethink its original approach. While the final rules “stop short of prohibiting dual-tracking,” they “limit lenders’ ability to drive the foreclosure process forward without giving borrowers a chance to complete every step of a loan modification,” the Bloomberg story says, citing a senior CFPB official.

“To create time to work with the servicer, a company cannot initiate a foreclosure until 120 days after a borrower falls delinquent. Nor can they start a foreclosure if a borrower has a pending application for a loan modification. Servicers must also give borrowers written notice of alternatives to foreclosure and examples of those options.

“In some circumstances, a borrower could face foreclosure despite seeking a loan modification. For example, if a borrower sought a modification after the 120-day delinquency period, the foreclosure process could still go forward.”