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ABA: The American Bankers Association

The bank’s mortgage loan customer has failed to pay his property taxes for two years so the state will auction the home for nonpayment of taxes. The mortgage servicing rules prohibit servicers from taking foreclosure action until the loan is past due 120 days, but the mortgage note and deed of trust notes stipulate that borrowers in default if they fail to pay taxes. Is it permissible under the mortgage servicing rules to foreclose on these grounds?

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