Dubiln Packard

Foreclosure

Everything you need to know about

Foreclosure

  • Foreclosure Defense
  • Loan Modification

and your options to purchase, refinance, sell, liquidate, surrender, or foreclose your property in the State of New Jersey.

by

Second Mortgages

Second mortgages are treated differently than first mortgages in all circumstances.

In a sale or foreclosure, the first mortgage holder has priority, receiving proceeds of the sale up to the amount of the full remaining balance.

In a Chapter 13 bankruptcy, a second mortgage’s lien on the property can be stripped and the loan converted to unsecured debt, pooled together with other debts covered under the Chapter 13 payment plan. All of the debt in the pool is eliminated on completion of the plan, often with a small portion of the original balance having been paid.

In a Chapter 7 bankruptcy, if the home is kept via a homestead exemption, the lien remains on the property. This situation has been challenged, with a new precedent established in the 11th Circuit allowing a second mortgage to be stripped in a Chapter 7 filing. Judicial thinking seems to be moving in this direction – but in the meanwhile, if a house in New Jersey becomes unaffordable under current law, either filing Chapter 13 bankruptcy or selling it are the available options.

If the property is underwater and is sold or foreclosed upon, sale proceeds go to the first mortgage holder first and any outstanding tax liens second, making it unlikely that the second mortgage holder will recover any funds in the sale. The debt remains outstanding, and the holder of the second mortgage may sue. Since the second mortgage has become unsecured debt as a result of the foreclosure, deed in lieu or short sale, it can then be wiped in a Chapter 7 bankruptcy filing.

Hopefully precedent will soon be established in New Jersey affording Chapter 7 filers the same protections as Chapter 13 filers – but, until then, an unaffordable second mortgage can force a homeowner out of their home unless they can qualify for a Chapter 13 bankruptcy filing.

Todd Murphy Law has extensive experience dealing with Chapter 7 and Chapter 13 bankruptcies and extensive experience negotiating with creditors.

Call Todd Murphy Law today for a free consultation.

by

Foreclosure Defense | New Jersey

A decade ago it was rare for foreclosure challenges to be heard by the courts. A few years back revelations about predatory lending practices and shoddy record keeping had brought the banks themselves under greater scrutiny. Studies had shown high error rates in bank paperwork and mounting evidence of lender misconduct. In this environment, the chances of getting a foreclosure defense heard  increased greatly, leading to the proliferation of Foreclosure Defense services and advertising.

The State of New Jersey mandates “judicial foreclosure,” meaning the action takes place before a judge, offering the borrower the opportunity to defend or challenge the foreclosure without needing to file a lawsuit against the lender.

Complexities created by the securitization of loans can cause lenders and mortgage servicers to misapply payments. The ownership of mortgage notes can often be obscure. Paperwork submitted by the bank frequently contained serious errors. These kinds of errors could cause a foreclosure to be stayed by the courts, buying time for the borrower to modify the loan, refinance or sell.

This situation has reverted to the status of a decade ago, when foreclosure defenses were rare. Unless there’s a clear case of unrecorded payments or abuse on the part of the lender, such an action is unlikely to succeed.

Review of documents by an experienced attorney is recommended in order to find errors, if they exist, and create advantage for the distressed borrower.

If a loan is found to be “unconscionable” by the court, a borrower may be able to obtain rescission (cancellation) of second and third mortgages under certain circumstances. This outcome has become increasingly rare in the past few years.

Before hiring a Foreclosure Defense firm, research them. Promises and large up-front fees are commonplace with unscrupulous operators preying on the hopes of homeowners. Consult an attorney you trust before you sign!

Call Todd Murphy Law today for a free consultation

by

What is Loan Modification?

Loan Modification A loan modification is a change of the terms of a loan, allowing it to emerge from —or avoid—default with payments affordable to the borrower. Late fees are forgiven, but other collection fees are rolled into the principal and the loan is re-amortized. Payments are lowered by changing the interest rate, the term of the loan, or both.

It can be challenging for the consumer to see the process through the bureaucracy of their bank. Common reasons for difficulty in completing the process are omissions in the paperwork, failure to meet deadlines and follow up, and the elusive nature of bank personnel– all of which can make the process very frustrating. To find out why loan modifications can be such a hassle, read our post: Why Are Loan Modifications Frustrating?

Due to recent changes in the law, it is now possible to begin a modification process before the loan goes into default. Pursuing this option early on can prevent a cascade of other problems that can result from a loan going into default.

The paperwork requirements for doing a modification are similar to those required to close on the original mortgage. A modification is similar to a refinance. Proof of income, a letter of explanation regarding variations in income, and other items may be necessary. If you want to find out how to get a loan modification, read out post: How To Get A Loan Modification.

 

by

Advice for Making Chapter 13 Bankruptcy Work for You

Looking for advice for making Chapter 13 Bankruptcy work for you?

People file for Chapter 13 bankruptcy for many reasons such as to reorganize debts in a manageable way or to save a home from foreclosure.   Unfortunately, many Chapter 13 Bankruptcy cases fail in the long-run.  Here is some advice for making Chapter 13 Bankruptcy work for you.

It is important to remember that Chapter 13 Bankruptcy is a long process – often five years – and it is important to do everything you can do to make the most of all that Chapter 13 Bankruptcy can do for you.

Its a Long Haul.

First stop should be an experienced New Jersey Bankruptcy Attorney.  At the same time, you should consult a couple of good websites hosted by Bankruptcy Lawyers to educate yourself on the process.  Since you are reading this article, it appears you are already on the right track.

Bankruptcy Is A Game Changer.

The huge benefit of Chapter 13 Bankruptcy is it provides you with the opportunity to manage your debt based on your actual budget.  I’ll say that again – your budget.  It puts you in control of paying your debts according to your budget and schedule not your creditors demands.

Chapter 13 Bankruptcy gives you power over your creditors and protects you from almost all legal action against you.

Do Your Part.

If Your Expect Extraordinary Results You Must Put Forth Extraordinary Effort

Chapter 13 Bankruptcy is a lot of work.  Be sure you stay involved in the process, make your payments on time and work with your Bankruptcy Attorney to develop a budget and plan you can afford in the long term.

Careful Planning Makes It Work.

The Budget. Chapter 13 is a reorganization of your debts.  We start by analyzing your income then preparing a household budget that you can live on.  Whatever money is left of your income after paying all of the expenses in your household budget then is paid to the trustee to fund your “Chapter 13 Plan.”

The Plan. The Chapter 13 Plan is a plan to pay your creditors.  Creditors are first sorted by priority into secured or unsecured creditors.  Secured creditors include your mortgage lender and car loan lender and they get paid first.  If there is any money left over after paying the secured creditors, that money is divided amongst your unsecured creditors such as credit cards.   There are other features of a Chapter 13 Plan that can be beneficial such as eliminating second mortgages or adjusting the terms of loans other than your first mortgage.

Get The Right Bankruptcy Attorney On Your Team.

In choosing an attorney, look for someone who will take the necessary time to work with you to develop a budget and a plan that you can live with for five years.  Too many people can’t make their plan payments which can lead to many different problems the most serious of which is to have your case dismissed.  This means you lose all of the rights you gained from the bankruptcy laws.

Advice For Making Chapter 13 Bankruptcy Work For You.

But what should you do during the bankruptcy process to make it run smoothly?

  • You should remain involved in your case the entire time it is pending.  This means keeping in touch with your New Jersey Bankruptcy Attorney, and informing him/her of any changes in your income or expenses as well as  to your email address, your home address, or phone number.
  • You must make your Chapter 13 Bankruptcy Plan Payments on time every time.  Missing a payment can have very significant consequences.  Don’t make this mistake.
  • Make sure you keep your mortgage and car payments up to date.
  • If you sense that you might fall behind on payments or if you have an emergency, call your bankruptcy lawyer.
  • Remember that your lawyer’s job is to create a payment plan than should work for you. You are the one who makes it work.
  • If you receive something in the mail that you don’t understand, contact your Bankruptcy Attorney right away.

 

Keep Focused On The Goal.

 

Obstacles Are those frightful things you see when you take your eyes off the goal – Henry Ford

 

 

Considering bankruptcy?  Todd Murphy, a NJ Bankruptcy Attorney, is the New Jersey Bankruptcy Lawyer people have trusted for over 15 years for Chapter 7 Bankruptcy and Chapter 13 Bankruptcy.  Our office is conveniently located to serve all of Essex County, Bergen County, Passaic County, Hudson County, Union County, Morris County, and Middlesex County

by

Can Bankruptcy Stop A Foreclosure?

Yes – in many cases.

Bankruptcy is a very smart choice for most individuals who are having trouble with too much debt. It is a government sanctioned program designed to help you while giving you every protection available under the law.

One benefit of filing for Chapter 13 bankruptcy is that it can stop foreclosure.  Chapter 13 bankruptcy can even stop a foreclosure on the night before it is scheduled to happen.

Each foreclosure situation is different, so speaking to a New Jersey bankruptcy lawyer is the best way to determine if filing for bankruptcy is the best way for you to prevent foreclosure of your home.  Chapter 13 bankruptcy is designed to help you reorganize your finances, and in the process can help stop a scheduled foreclosure.