If you have been experiencing extreme financial distress, it was most likely caused by an unexpected event or series of life events such as illness or unemployment. Unsecured debt like credit cards may have spiraled out of control. Aggressive debt collectors may be calling and hassling you daily, with their activity and threats escalating as they generally have little to take from you except for your credit rating.
The mortgage lender is another story, since they have a secured debt in the form of a lien on your home. If financial troubles have caused you to miss numerous mortgage payments, you are probably worried about losing your home to foreclosure. If so, it’s important to understand how the New Jersey foreclosure process works. It is also important to find an experienced foreclosure defense attorney who can review your case, answer your questions, and help you move forward with your best interests in mind.
Most Lenders Begin the Foreclosure Process After 120-Day Delinquency
In New Jersey, while the bank may quickly alert you of their plans to foreclose (usually after you have missed three mortgage payments), the process could drag on for quite a while, depending on your case. The Notice of Intent to Foreclosure signals that a complaint is on the way, usually a month or so later. The 30 days beforehand though gives you time to decide whether you are going to attempt to ‘cure the default.’ In plain terms, curing the default means paying the bank what they say you owe or working out other terms before they serve you with a summons and complaint.
Responding to the Complaint May Delay the Foreclosure
While it’s best to begin consulting with a foreclosure defense attorney and negotiating with your mortgage lender as soon as you begin falling behind on mortgage payments, once you’ve received the notice of intent you can still discuss your eligibility for options such as a loan modification or a forbearance program through your lender. Communication is key, and this is where the assistance of an experienced attorney is crucial. If no other arrangements are made, you should expect the lender to serve you with a foreclosure complaint. If you do not respond to the complaint, most likely the lender will receive a default judgment against you and foreclosure proceedings will move forward. There will still be time to try to modify your loan, but you must act quickly.
From there, a date for the sheriff’s foreclosure sale will be set and then your house will be sold. If you wish to try and delay that process, you can file for two-week adjournments-twice. After that if no other progress is made in stalling or stopping the foreclosure, the home is auctioned at the Sheriff’s office (find out more about this process in our recent blog, ‘Sheriff Sale Process in New Jersey‘).
If you decide to fight the foreclosure, it could be delayed by months (and maybe a year or more) allowing you to stay in the home during that time. Your attorney may be able to stop foreclosure with a lack-of-note defense, or by pointing out fraud or violations in lending, or other infractions.
Other Options May Stop Foreclosure, Including Bankruptcy
You may also be able to short sell your home, with the lender agreeing to the amount of the sale without suing you for the rest of what was left on the mortgage. A deed-in-lieu also allows you to walk away from the home, basically just turning in the keys and giving the property back to the bank. While this still means negative consequences to your credit, it is much better than having a foreclosure on your record.
Bankruptcy is also an option for stalling a foreclosure, or perhaps staving it off for good if you file for Chapter 13. Once the automatic stay is in effect for either Chapter 7 or Chapter 13 bankruptcy, all debt collection activities are halted, including foreclosures-even if they have progressed to the point of impending Sheriff’s sale. The stay may not be permanent in Chapter 7, especially, if the lender files to have the stay lifted and their motion is granted (often very likely).
Contact Us for Help Now to Save Your Home
If you are worried about foreclosure or have already received a notice from your lender, it’s time to get educated about your rights and your options. If you want to keep your home, it’s imperative that you have someone working for you. An experienced foreclosure attorney will understand the complexity of the law and protect you-as well as fighting your lender in court to save your home. Contact Levitt & Slafkes, P.C. now so our foreclosure defense attorneys can review your case and help you move forward in a way that suits your needs best. We are here to help!