Have you been served Foreclosure papers in New Jersey?
Don’t panic! The foreclosure process takes time, usually as much as a couple of years. New Jersey is a so-called “judicial state” in foreclosure proceeding – the foreclosure must proceed through the court system.
Although there is time to take action, the sooner the better. Contact your lender immediately to apply for loan modification. The longer you wait, farther behind you’ll get in your payments, creating “arrears” in your loan.
The most common reason loan modifications are denied is errors in the paperwork. If your modification is denied or you’ve been told you can’t qualify, then have your paperwork reviewed by a qualified attorney and re-submit your application.
If it turns out you’re unable to qualify (which an attorney can help you determine), then investigate Chapter 13 bankruptcy. The terms of Chapter 13 will involve a restructuring of your debt into a payment plan you can afford, if you’re still working and have enough income to make the payments in your payment plan. Often a homeowner can qualify for a modification under the terms of their Chapter 13 plan after an unsuccessful application before filing. Arrears are added to the loan principal, the interest is reduced or set to around 4%, and the term of the loan may be extended to 45 years, with some closing fees waived.
Although principal reduction has been in the news, with the White House advocating strenuously on behalf of it, the truth of the situation is that principal reduction is extremely rare. Many unscrupulous operators have sprung up promising principal reduction for large upfront fees. Beware scam operations! Talk to an attorney you trust before committing to such a program.
The total of loan principal and interest (P&I) should be close to 30% of your gross income to qualify for a home loan modification.
It’s extremely difficult for the self-employed to obtain a modification, but may qualify under Chapter 13.
Should I use a Foreclosure Defense attorney?
Another scam that has become increasingly common is a promise of Foreclosure Defense. Although for a period of time Foreclosure Defenses were more commonly heard by the courts in the wake of mass errors and shoddy practices by lenders, these actions have abated and are unlikely to succeed without a legitimate complaint of unrecorded payments. If you sent a payment that’s not showing up in the statements you’re getting, you might have a case.
Beware services that promise Foreclosure Defense for large upfront fees or monthly retainers for the duration of your occupancy. Consult an attorney you know and trust before entering into any such agreement. Research any offer you’re considering. Look them up on Google and search for possible complaints.
Should I use a Loan Modification service?
Another scam that’s emerged recently is Loan Modification Negotiation or Assistance Services with large upfront fees, claiming government affiliation or non-profit advocacy. For a large upfront fee, such services offer principal reduction or unbelievable terms. Remember, principal reduction is extremely rare. Research any offer and any company you’re thinking of doing business with.
It’s possible to stop a sheriff’s sale with an automatic stay under a Bankruptcy filing, which must be confirmed to remain permanent.
Contact Todd Murphy Law today, your qualified New Jersey foreclosure specialist.