In New Jersey, if you have fallen behind on your mortgage payments, but you can catch up within 12-24 months, a repayment plan may be the best solution to avoid foreclosure. Understanding how it works and whether you qualify can help you take action before it’s too late.
Can a Repayment Plan Stop Foreclosure in NJ?
Yes, a repayment plan can stop foreclosure in New Jersey, just like a loan modification. A repayment plan requires you to make up missed payments over time while keeping up with your regular monthly mortgage payment. If your Lender approves a repayment plan, they should not file a complaint, apply for Final Judgment, or schedule a Sheriff Sale while you are making the payments.
What is a Repayment Plan?
A repayment plan is an agreement with your lender that spreads out missed payments over several months (normally 12-24 months), adding a portion of the past-due amount to your regular mortgage payment.
For example, if you are $12,000 in arrears, your lender may approve a Repayment plan that requires you to make your normal monthly mortgage payment, with an additional $1,000, each month for 12 months. Unlike loan modifications, repayment plans do not permanently change your loan terms; they are a short-term solution to prevent foreclosure.
How Do I Know if I Am Eligible?
A repayment plan can help homeowners catch up on missed mortgage payments, but eligibility depends on several factors, and you will likely be required to submit an application, much like a Loan Modification, which would include:
- Temporary Financial Hardship: You must show that a short-term issue, like job loss or a medical emergency, caused your delinquency.
- Ability to Pay Moving Forward: Lenders need proof that you can afford both your regular mortgage and additional repayment amounts.
- Financial Documentation: You’ll need to provide income and expense records to support your request.
Because lender policies vary, direct written communication is key. An experienced foreclosure attorney can help you determine if seeking a repayment plan is the right move for you.
Do I Have Other Foreclosure Prevention Options?
A repayment plan isn’t the only way to avoid foreclosure. Here’s how it stacks up against other strategies:
- Loan Modification: Instead of repaying past-due amounts, this option permanently changes your loan terms, possibly lowering your monthly payment.
- Forbearance: Allows you to pause or reduce payments temporarily, but you must repay the missed amounts later. If you can resume payments and need structured support to catch up, a repayment plan may be your best option.
Call our office today to discuss the best option to stop foreclosure and save your home.
How Can Ira J. Metrick Help Me Save My Home?
Attorney Ira J. Metrick has over a decade of experience helping New Jersey homeowners save their homes. His practice focuses on foreclosure defense, loan modifications, and claims against lenders and their representatives, making him a trusted advocate in complex cases. If you need a repayment plan or another foreclosure defense strategy, our office provides legal guidance and aggressive representation to protect your home. Contact us today.
