Not only is a home one of the most significant financial investments most people will ever make, but it is such a personal investment as well – it’s the place where some of the best of life’s memories are made. It’s the place where you relax, the place where you spend time with loved ones, the place where you raise your kids and enjoy your pets and dream about the future, the place that you are excited to come back to after a vacation. For many people now, it’s the place where they work and build their careers as well!
That’s why foreclosure is such a scary word. No one thinks seriously when they buy a home that they could one day be in a position to lose it. However, in today’s volatile economy where inflation and interest rates are so high, and in a post-pandemic landscape where government protections against foreclosure have now stopped, many homeowners find themselves struggling to make their mortgage payments and falling behind.
One missed mortgage payment doesn’t mean that you will be foreclosed on, but if you have missed a few mortgage payments in a row, have received a Notice of Intention to Foreclose from your mortgage lender, or have already been served with a foreclosure complaint and summons, don’t panic! There are still several ways that New Jersey homeowners can defend against foreclosure – you do have options.
Here are four of the most effective ways that you can stop foreclosure and save your home:
1 – Obtain A Loan Modification
Applying for a loan modification is one “loss mitigation” strategy (foreclosure defense) and probably the most popular option. It involves working with your lender or with an external third party to change the terms of the promissory note, reduce the monthly mortgage payment amount, lower the interest rate or convert from a variable to a fixed interest rate, eliminate late fees, and/or lengthen the term of the mortgage in some cases.
Know that getting a loan modification isn’t easy; this is mainly because lenders have no obligation to accept your request. Every lender has different standards of hardship that mortgage holders can qualify for, but the process involves a lengthy, complex application and lots of supporting documentation. There are many scammers in New Jersey who are not qualified to assist you, legally speaking, and who are just trying to take more of your money. That’s why it is in your best interests to work with local loan modification attorneys if you take this route (the most trustworthy sources of information and legal assistance).
2 – Contest It
There is something known as the Fair Foreclosure Act that protects homeowners from unjust actions that may be taken against them by lenders – essentially, mortgage lenders have to follow strict rules and procedures before they can repossess a home. They have to send a notification letter within a certain timeframe, include certain information and resources, and more. If they make any mistakes or act illegally, you can and should contest the foreclosure in court! You can argue that they do not have the legal right to foreclose against you. In some cases, you can even counter-sue.
As with any legal action that involves filing a formal answer and appearing at a trial, you need the best legal representation possible to ensure that you have the best chances at making a successful, persuasive argument for your side. New Jersey lawyers who specialize in foreclosure defense and litigation can explain your rights and options and aggressively protect your interests.
3 – Sell Your Home
There are a few ways that you can sell your home before the bank takes it from you and avoid foreclosure happening.
One of those ways is a short sale – the property will be sold at a price less than the amount you currently owe on the mortgage. All the proceeds go to the lender, who will forgive the remaining balance. The lender has to pre-approve the short sale. It will still show as a negative mark on your credit score but will have fewer adverse effects than a foreclosure.
Another of the ways that New Jersey homeowners can defend against foreclosure is selling the home for cash to a buyer or investor. This is a quick way to pay off the mortgage and cure default. It still means that you will lose your home, though, but you can avoid any negative consequences and you may even walk away with more money to start somewhere new.
4 – File For Chapter 13 Bankruptcy
Which of these ways you should use will depend on your specific situation, but filing for Chapter 13 bankruptcy can halt foreclosure in its tracks. As soon as you file for Chapter 13, the court will enact an automatic stay on all debt collection actions against you. This includes liens on your property, wage garnishment, and foreclosure. Once that order is in place, the court will set up a 3 – 5 year supervised debt repayment plan that will allow you time to catch up on your payments. When the plan is up and you have cured your default, you can keep your home!
Facing Foreclosure? Contact Our Firm Today!
The Law Offices of Patel & Cardenas has successfully helped hundreds of homeowners in New Jersey save their homes and their financial futures. We can save you time, money, and stress if you are on the verge of foreclosure! Our highly experienced and multilingual attorneys will guide you every step of the way to a favorable resolution. We have a vast network of realtors, investors, and mortgage brokers at our disposal who can assist you with various parts of the process as well; you can trust us to connect you with the right resources you need to make it through this difficult time and get back on your feet. Our extensive knowledge can give you an important advantage. Call today to schedule a free consultation and discover more about what comes next!