I have a deal with my bank should I file an Answer in my NJ Foreclosure?

I have a deal with my bank should I file an Answer in my NJ Foreclosure?

 

My name is Veer Patel. I’m an attorney and partner at Patel, Soltis, and Cardenas attorneys at law in the State of New Jersey. I practice foreclosure law.

Today I’m answering a question: “I’ve worked out the deal with a lender do I still have to file an answer in my New Jersey foreclosure action?”

I can’t tell you how many times clients think they’ve worked out a deal with their lender. They get a promise from someone on the phone saying, “Yeah you’re modified. Don’t worry about it. Just make your payment.”

Or, they think they heard something. Or, they didn’t hear correctly. Or, they think that their foreclosure in litigation is on hold because the bank said it would be. So, they let the litigation go until it is too late.

The foreclosure is actually completed while they are still trying to work something out with their bank. The goal should not to waive any of your rights unless you absolutely have to. So, if you’ve gone past certain timelines and you think you cannot file an answer. I would say you should still file an answer to protect your rights in case something falls through with the bank.

That’s my recommendation. File an answer. Protect your rights.

A lot of times a client will get a modification. When the clients come in they will say, “I received a loan modification, but I also have a summons and complaint here. Should I file an answer?”

I look at the modification and the conditions that go with it. I take a look at whether or not the trial payment has been set up. Or if their payment plan is feasible and is actually better than what they currently have.

Typically a bank sends something in writing which indicates that you have 3 to 6 months months where you have to pay on time or you have to pay a set amount and once you’ve made these payments you’ll get a permanent modification.

You will you’ll sign and return the documents to the bank. If you have not got anything in writing from your bank, then odds are you do not have a loan modification. Then the modification is recorded and voila you have new terms on your mortgage.

The foreclosure is dismissed and you’re okay. So if a client comes in and they’re in the middle of a plan but they do not know the terms of the modification. I have to dig into why they think they have a modification. Until the trial payments are over and the client accepted those terms, there is no guarantee the foreclosure litigation will stop.

Once the loan modification comes in and they choose maybe to not accept the terms. (We had a case one time where the interest rate went up 4% above what our client was paying and would have paid an extra $200,000 in interest over the course of the loan, so we had to give the opinion that it was a bad loan modification.) So, if they didn’t file an answer, they would have waived certain rights. This would allow the bank to speed up of the timeline of foreclosure against them.

In that circumstance you know it would have been it’s better to file an answer in the foreclosure. Sometimes people are still going through a hard time when they’re working through their loan modification. Whether they’re in between jobs or whether someone is sick or they’re still sick but things are looking better. There are a lot of circumstances why people get a trial payment plan, then they make one or two payments and they can’t make the third. Or, you know they make three and then miss the fourth before the permanent modification is recorded.

So you know in that circumstance, if you didn’t file an answer, you’ve allowed the speed-up of the timeline against you. And, it really harms you if you’re if you just need another month or two in the long run to really work things out to get back up on your feet.

That’s the answers the question. I do think that you should still really concentrated on your court case to make sure you do not give up your rights, and have a back up plan.

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