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