Today Your Legal Corner will discuss the “Foreclosure Process.”
If you are like most, when there is something you just do not want to do, excuses are plentiful. This is especially true when a family must downsize or relocate due to foreseeable financial constraints. Lets face it. In life, stuff happens. We get older, lose a job or are faced with unexpected debt. Still, because we are creatures of habit, movement or change quite often does not happen fast.
When it comes to the foreclosure process, take immediate action and formulate your plan. Do not wait. The earlier a person responds, the better financial position he or she will be placed in.
In New Jersey, the Fair Foreclosure Act governs residential foreclosures. A foreclosure process occurs when someone fails to make payments on their residential property loan and the lender attempts to collect the debt by filing a lawsuit to obtain possession and ownership of the home.
Initially, when a mortgage is granted to purchase a home or to refinance, the lender is given a security interest in the mortgaged property. A default on the property happens when the mortgage payments are not being made. Typically, a home foreclosure process will commence after three missed payments.
Important to note under New Jersey law, a Notice Of Intent To Foreclose must be mailed to the homeowner by registered or certified mail and return receipt, 30 days prior to filing a complaint.
Foreclosure Process – Avoidance
To avoid the foreclosure process, develop your plan of action early. Decide if you are financially able to stay in your home or if relocating is a more realistic option. If your decision is to remain in your current home, seek out any and all refinance programs that may be available. Inquire as to government incentives and military programs if applicable.
When a home is refinanced, the payments may be made more affordable. This can happen by receiving a lower interest rate or a longer repayment term. Additionally, discuss with your attorney the possibility of filing for Chapter 13 bankruptcy.
If the decision is made to leave the home, a short sale may be an option. The goal of a short sale is to avoid a foreclosure by selling the home, and settling the debt for less than the amount owed. Additionally, the property can also be signed over to the lender. This is known as a Deed in Lieu of Foreclosure. A Deed in Lieu of Foreclosure may still affect a person’s credit but the impact is less severe than the home foreclosure process.
When payments, refinancing or other type of agreement cannot cure a default within the 30-day period, the lender may then file a foreclosure complaint subject to the laws of New Jersey.
Do not wait until a foreclosure process has started to consult with an attorney. Meet with the attorney early on because your options will be greater then and will decrease the longer you wait. For example, once a sheriff sale has happened, the default in most cases cannot be cured. Instead, the owner only has ten days to pay the balance of the mortgage loan or the home is gone forever. Remember: formulate a timely plan!
Till next week, God bless, keep smiling and remember who’s in Your Legal Corner. Next time, YLC will discuss “Top Things to Look for On Your Yearly Free Credit Report“
Victoria M. Dalton is an Attorney Of Counsel with the dedicated Law Offices of Hoffman DiMuzio. Call 856-845-8243 or fill out a brief online contact form.
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Your Legal Corner was created to provide educational articles about the law and is not legal advice! Always consult with an attorney to address your legal needs!