Foreclosure Defense in New Jersey

Foreclosure Defense in New Jersey Passaic Bergen County

If you are in need of a foreclosure defense in New Jersey you need to contact an attorney with experience in the areas for real estate, bankruptcy, and loan modifications. Franklin S. Montero will give you a free in person consultation so you can find out what your options are for your particular case.

Over the past seven years or so, foreclosure in New Jersey has become part of everyday life for many Americans. Prior to 2008, a person facing a foreclosure on their home had very few options other than to catch up with their payments or surrender the premises. However, due to the incredible meltdown of the housing market and the accompanying foreclosures in record numbers many new options have emerged. The following are some of the options you might consider if you are facing an impending foreclosure or even if you have already been served with a Foreclosure Complaint.

Short Sale

Borrower obtains approval from the bank to sell the house for less than it is worth. This should not be attempted without the services of an attorney. Only if you are being released from any and all liability at closing, there is no reason to help the bank that is foreclosing you your home to sell it for them.

Do Nothing

Doing nothing is always an option and for some people who see no reason to engage in the process of trying to save their home. The have decided to just walk away. Many bought at the height of the boom, in 2005 or 2006 and almost immediately their mortgages were under water. This is not advisable as you will most certainly be plagued by a deficiency judgment in the future and any attempt to obtain a mortgage in the future will be seriously hampered.

Recent developments

The most significant recent development has been suggestions that there may be principal reduction for loans under water for Fannie Mae and Freddie Mac loans. Finally, some Congressmen have listened to the argument that it is not fair to force people out of their homes so that investors can buy them and then rent them to other people who have just lost their homes. Why not just let those already in possession of the property refinance at the new current market value?

Strategic foreclosures

Some people have determined that it is better to buy something else and walk away.  After the dramatic drop in home values in 2008, deliberately not paying your mortgage even though you are able is known as a “strategic foreclosure”. These people have decided to save the payments they would have made to their existing mortgage so that they could then buy another home at a greatly reduced rate.

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Cash for Keys

In cases where the decision has been made to give up the house to the bank, borrowers may sometimes be able to negotiate its surrender in exchange for $5,000 to $10,000 or more. This should be done before the Judgment of Foreclosure and Warrant of Removal have been obtained by the bank. In essence you are making the turnover of your house easier for the bank and in return you are receiving some funds that you may well need to move and obtain a rental.

Deed in Lieu

This term is short for Deed in Lieu of Foreclosure. As in Cash for Keys, you are making it easier for the bank to obtain title to your property, but there is no cash being paid to you. Instead, you are merely hoping to receive a release from your mortgage obligation in exchange for signing over the Deed to the bank. You would naturally be insisting on a release from any further obligation under your Mortgage and Note.

Deed in Lieu

This term is short for Deed in Lieu of Foreclosure. As in Cash for Keys, you are making it easier for the bank to obtain title to your property, but there is no cash being paid to you. Instead, you are merely hoping to receive a release from your mortgage obligation in exchange for signing over the Deed to the bank. You would naturally be insisting on a release from any further obligation under your Mortgage and Note.

Chapter 7 Bankruptcy

The automatic stay of a bankruptcy will stop the foreclosure process immediately. Eventually the bank will file for a relief from the stay, but in the interim you may be able to work out a resolution and if you cannot, at least you will be eliminating any deficiency judgment that might otherwise be obtained by the bank.  

Chapter 13 Bankruptcy

The vast majority of Chapter 13 bankruptcy petitions are filed by those with equity in their homes. They can propose a plan whereby any missed payments will be made up over the course of a 36-60 month plan while staying current with their payments going forward.

Foreclosure Mediation

Also a recent phenomenon, this is required in many states, including New Jersey and New York. These are Court supervised procedures which aim at resolving disputes over loan defaults and claims by borrowers of improprieties by the lender and their agents. Borrowers are required to request mediation and submit worksheets containing their current financial information. The borrow and bank representative will meet at the Court House with a Mediator and who will attempt to have the parties reach an agreement. This is not as successful as it should be, mostly due to the bank’s reluctance to lower interest and/or principal. Nevertheless, it is a process which should be taken advantage of in most cases.

Loan Modification

This is the area with the most change and growth since the mortgage crisis began. Virtually unheard of in the home mortgage context until recently, banks have been forced by the government to engage in some form of loan modification process with HARP and HAMP. Although many banks are still extremely reluctant and recalcitrant in this area, there are success stories of varying degrees. Usually this involves a reduction in the interest rate, a lowered payment and past due balances tacked onto the end of the loan.

Answer to Complaint

This area of legal practice has grown in response to the revelations of many bad practices by the banks including but not limited to predatory lending, robo-signing and failure to deal in good faith in the loan modification process. The simple act of filing an Answer to the Complaint will extend the foreclosure process which is what many homeowners are seeking at the very least. If you have been served with a Foreclosure Complaint you should seek the advice of an experienced foreclosure defense firm.