Foreclosure Options and Rights as a New Jersey Homeowner
If you are behind on your mortgage payments and your home is at risk of foreclosure, the important thing to remember is that your home cannot be taken from you overnight. The foreclosure process can take several months, and there are legal guidelines that your lender must follow. The process begins with a letter from your lender or their attorney, called a Notice of Intention to Foreclose, stating their intention to begin foreclosure if the arrears are not paid within 30 days. An important first step at this point is to contact a New Jersey licensed attorney, who can advise you on your rights and foreclosure options.
If you receive a foreclosure complaint, you have options. The foreclosure options include:
- Seeking a Short Sale or Deed in Lieu of Foreclosure. If you decide to leave your home, you may be eligible for a short sale, in which your lender agrees to allow you to sell the home for less than the total amount due. If the mortgage is the only lien against the property, you may qualify for a Deed in lieu of Foreclosure, in which you simply sign the deed over to the lender and vacate the property. If you are considering either of these options, you should consult with a qualified tax professional regarding possible tax consequences.
- Applying for a loan modification. You may be eligible for a loan modification program that could reduce the interest rate, extend the duration of your loan, or reduce the amount you owe. The New Jersey Courts offer a free mediation program to explore these options. When you receive the foreclosure complaint, there will be forms to explain the Court’s Mediation Program. It is also possible to conduct an analysis to identify what loan modification programs are available; determine whether you will be approved for the modification; and predict the modified monthly payment. It is important to understand that APPLYING FOR A MODIFICATION DOES NOT STOP THE FORECLOSURE PROCESS. If you want to stop the foreclosure process, you must file a Contesting Answer to the Complaint.
- Paying the amount owed. The most straightforward course of action is to pay the arrears, plus any late fees and other charges. This is called reinstatement. You have the legal right to reinstate until Final Judgment is granted. Once you reinstate the loan, you can go back to your normal payment schedule.
- Contesting the foreclosure in court. You can contest the foreclosure complaint by filing an Answer that properly questions the lender’s right to foreclose. There are several ways to do this, such as disputing the claims that the lender has made in the foreclosure complaint and filing Counter-Claims against the lender for any violations on their part. A licensed foreclosure defense attorney will be able to evaluate your case and help you identify your defenses.
- Declaring bankruptcy. You have the right to file for Bankruptcy, as provided by federal law. In most circumstances, upon the filing of a Bankruptcy Petition, you will be entitled to the “Automatic Stay” which is an automatic injunction that temporarily halts the foreclosure and other actions by creditors. In order to fully understand your options concerning Bankruptcy, you should seek a consultation with an experienced bankruptcy attorney to determine whether it is an option for you.
Contact Ira Metrick today for a free consultation to discuss the foreclosure options that are right for you. In addition to filing contesting Answers and defending the foreclosure, we have the resources to conduct an analysis to identify what loan modification programs are available to our clients; whether our clients will be approved for the modification; and we can give our clients an estimate of the modified monthly payment. We also offer aggressive loan modification representation to monitor lender’s’ compliance with the new federal rules.
