Dubiln Packard

Stop A Sheriff Sale – Save Your Home

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Stop A Sheriff Sale – Save Your Home

stop a sheriff sale new jerseyIf you want to save your home from a Sheriff sale, there are number of strategies you can employ – it’s not too late.

Don’t be concerned that its the last minute.  You may have been trying for months or longer to get a loan modification or maybe you gave up months ago but now you’re faced with the prospect of having your home sold out from under you by the Sheriff. Here’s what you need to know to survive.

How To Stop The Sale.

There are two methods of stopping the sale before it happens:

1. Adjournments – the lender (plaintiff) or homeowner (defendant) may ask the court to stop or adjourn the sale temporarily for any or no reason.  But, the homeowner can only ask twice and each time the sale can only be adjourned for two weeks.  The plaintiff or lender can ask as many times as he or she wants.  In certain limited situations, the homeowner can ask the court for a further adjournment but it will only be granted for good cause such as there is a sale pending or you are about to be approved for a loan modification.

2. Bankruptcy – this is a powerful tool to (a) stop the Sheriff sale and (b) to bring your mortgage loan current which ultimately saves your home form foreclosure.

Once The Sale is Stopped, How To get Caught Up On Your Missed Payments.

Once the sale has been stopped, it’s time to get working on a loan modification.  A loan modification is what most people want and in most cases is the best way to resolve a foreclosure.  If its not possible to get a loan modification in the short time you have after you have stopped a Sheriff sale, and we didn’t use bankruptcy to stop a Sheriff sale, then bankruptcy can help to (1) stop the sale after the adjournment runs out, (2) get more time to get a loan modification, (3) use the bankruptcy court’s loss mitigation program to get a loan modification, or (4) get current on the loan without a loan modification.

Can You Get A Loan Modification?

Even though you may have tried and failed or given up hope months ago, and even though the Sheriff sale is about to happen, it still may be possible to get a loan modification to permanently cure your foreclosure case.

The Basic Issue To Be Resolved.

The Arrears – The problem you are facing is that there a number of missed payments and the lender won’t just let you start paying again. Once three payments have been missed, the loan is declared in default and the only way to be able to start paying again is to catch-up on the missed payments.  These missed payments are part of what is called the arrears.  Any real estate taxes or insurance that may have been paid by the lender and any legal fees and late fees are added together with the missed payments to make up all of the arrears.  The arrears have to be paid before the lender will allow you to start making regular monthly payments again.

How to Pay The Arrears – There are essentially three ways to pay the arrears: (1) pay the total arrears in a lump sum, (2) with a loan modification, have the arrears added to the principal balance of the loan, or (3) pay the arrears in 60 equal monthly payments in a chapter 13 bankruptcy plan.

The Tools We Use.

Loan modification – in a loan modification, the arrears are added to the principal balance of the loan and a new amortization schedule is calculated usually based on 30 years and often with a new interest rate. For loans with high interest rates, this helps lower the monthly payment as does extending the term to 30 years and sometime longer.  This is the ideal result.

Chapter 13 Bankruptcy – this is essentially a repayment plan that is used to pay the arrears over 60 equal monthly payments.  Then, in addition to making these 60 monthly payments, at the same time, you start paying your current monthly mortgage payment.  This double payment – so to speak – is what can be tough for many people, that’s why the loan modification is the best route if possible. An additional benefit to the chapter 13 bankruptcy is that in certain circumstances, we may be able to eliminate a second mortgage loan.  Also, if you have excessive consumer debt from credit cards, or if you have other debt from medical or other unplanned expenses, these debts can be handled with a chapter 13 bankruptcy.

Consider All of Your Options – Take Action.

As you can see there are a number of ins-and-outs to resolving a foreclosure.  This article only scratches the surface but I hope you can see there is help waiting for you if you take action.  Don’t be discouraged if there is a Sheriff sale pending.  We can stop a Sheriff sale and resolve your foreclosure even though its the last minute.

 

Get my free Consumer Guide to Saving Your Home From A Sheriff Sale.

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When Do I Have To Move After A Sheriff Sale in New Jersey?

eviction notice after sheriff saleIf your home has been sold or is about to be sold, you must move – but read on.

You will have to move after a Sheriff Sale.  When the time finally comes after you have tried everything you could try to save your home and your home is sold at a Sheriff Sale in New Jersey, the home is no longer yours and its time to think about moving. The ownership interest in the home is actually transferred by the Sheriff to the new buyer and you are required to move out of your home right away. But, there are still a couple of last minute strategies you might want to consider to stay in your home a little longer.

You Have 10 More Days.

There is a slight delay, though, after the sale.  In New Jersey, there is something known as a 10-day right of redemption for the home owner.  This gives the homeowner the right to pay-off the loan and prevent the home from being sold if it can be done within the 10 days after the sale.  In some cases, a home owner might be able to borrow money from a friend or family member or get a hard-money loan. Therefore, the law provides for 10 days after the sale to do “redeem” your home.  If not, as is usually the case, then, and only then, does the Sheriff transfer the property to the new owner.

For most people, then, that means you have an additional 10 days after the sale before you have to move.

What If You Can’t Move Right Away?

Even after the 10-day period, some people just can’t move after a Sheriff sale, at least not right away. Maybe you don’t have the money.  Maybe you have nowhere to go.  Maybe you or a family member is sick or disabled making it harder to move.  There are many reasons. If that’s you, what should you do?  Here are a couple of options:

Cash For Keys – Often the new owner will send a representative to your home to talk to about moving.  An experienced foreclosure sale buyer knows that it may be hard for you to move and that it could be costly and time consuming to evict you.  Therefore, a smart owner will offer you the necessary cash you need to move in exchange for you moving out right away or within a short period of time. Its common for a representative of the new owner to offer you $5000 if you move out in 30 days or $3000 if you move out in 60 days (see below to see why this is smart for them and how you can gain leverage to get money to move).

Make them Evict You – There is a 90-day period before eviction following a sheriff sale.  Approximately 60 days after the sheriff sale, you will receive a final notice with a date set for eviction.  If you can’t move before that date, you can go to the sheriff’s office and ask for a hearing where you can tell your story to the judge and ask for more time.  You may get a couple of weeks or a couple of months.  If you still can’t move on the extended eviction date, you can go before the judge again and ask for even more time. There are many extenuating circumstances that judges will consider in such cases: particularly for elderly home owners or for home owners with children.    Now you know why its smart for the new owner to offer you cash for keys!

Having your home sold at a Sheriff sale is tough on even the strongest family but, as you can see from the information above, there are some last-minute things you an do to get more time before you move after a Sheriff sale.  Even after the sale to stay in your home just a little longer.

 

 

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Who Will Bid On A Home In A Sheriff Sale In New Jersey

foreclosure sheriff sale new jerseyOften only your mortgage lender will bid on a home in a Sheriff Sale in New Jersey at a foreclosure Sheriff sale.

So, what does that mean to you?

First, the Sheriff Sale process in New Jersey for home owners in  foreclosure is confusing and often scary.  The fear of losing your home is staggering and those who are involved in it have many questions. There are many little strategies that, when put together, can prolong the time you stay in your home.

Here’s one little strategy that can help.

At a Sheriff Sale for a home being foreclosed on in New Jersey, often the mortgage lender is the only bidder at the Sheriff Sale, particularly if the home is underwater (value of the home is less than what is owed to the first mortgage lender).  There usually isn’t anyone who would bid on a home at a price above market and the lender for some reason doesn’t yet want to face the fact that this loan is going to be closed-out at a loss.

The Bank Might Actually Be Happy That You Stay In The Home After The Sheriff Sale.

Why is this important?  Because if the lender is the only bidder, rather than an investor or buyer who wants to live in the home, the lender may not be in a rush to get you out of the home after the sale.  In fact, the lender might appreciate having someone living in the home and keeping it in reasonably good condition.

You Must Actually Be Evicted After A Sheriff Sale.

In another post, I will talk about eviction after a Sheriff Sale but for now just know that even after a Sheriff Sale, unless you leave the home freely, you must be evicted as if you were a tenant in the property and therefore are afforded certain protections under the law. For now, understand that is can be helpful to you if only the lender places a bid on a home in a Sheriff Sale In New Jersey.

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How Much Notice You Will Receive Before A Sheriff Sale In New Jersey

sheriff sale notice new jerseyAre You Worried About How Much Notice You Will Receive Before A Sheriff Sale In New Jersey?

If your home is in foreclosure and you’re getting close to the end of the process, you may be worried about being served with a notice of a Sheriff Sale.  Many people wonder: how much notice will be given prior to the sale?

Notice in the Newspaper.

The Sheriff in New Jersey is required to provide notice by advertising the sale in the designated newspaper for four (4) consecutive weeks.   Each Sheriff office has designated a specific newspaper in which notices are advertised.  Check on the website for the Sheriff office in your county.

Notice At The Property.

Although not required to do so, the Sheriff often posts a notice at the property 30 days prior to the sale and also provides written notice to the occupant whether that is you as the owner or if you are a tenant in the property.

Online Sheriff Sale Listings.

Each Sheriff office maintains a website where the current list of sales is posted in a searchable database.  This is a good resource to get up-to-date information but not all offices update the site right away so some of the information may be somewhat out of date.  You can also call the Sheriff office or go to each Sheriff website for a listing of all upcoming sales.

Friendly Service.

I have found in all cases that the personnel in the Sheriff offices are extremely friendly and helpful and a call or visit to their offices is always helpful.

If your home is in foreclosure and you are worried about a Sheriff sale and how to stop it and save your home, we can help. Start by downloading one of our free consumer guides.

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Supreme Court Rules Borrowers Cannot Strip Second Mortgage In Chapter 7 Case

supreme court bankruptcyA Tough Case For Home Owners In New Jersey Facing Foreclosure.

The Supreme Court of the United States decided in a unanimous decision recently that a homeowner in a Chapter 7 bankruptcy case can not void a second mortgage lien when the debt owed on a first mortgage lien exceeds the current value of the home.  The practice, while not allowed in New Jersey, known by bankruptcy lawyers and foreclosure lawyers as “stripping” a lien is very helpful to homeowners. When a lien is “stripped” it is converted from a secured loan to an unsecured loan which means little or no payment will go to that creditor and – more importantly – the lien will be removed from the property which provides much more flexibility in managing the first mortgage on the property.

New Jersey bankruptcy and foreclosure lawyers were watching this case closely in the hopes the practice would become allowed in New Jersey Bankruptcy Court.  Homeowners in a chapter 13 bankruptcy case do currently enjoy the ability to “strip” a second mortgage.

The ruling, which will benefit commercial lenders, says that bankruptcy courts may not “strip off” a second mortgage lien on property if the value of the property is less than the amount the homeowner owes to the first mortgage lienholder — in other words, the second mortgage lien is “completely underwater.”

In the case of Bank of America v. Caulkett, Bank of America asserted that junior liens should not be treated as unsecured loans, because the bankruptcy code only “strips off” claims from property that are disallowed and because the Supreme Court’s ruling in Dewsnup v. Timm, disallowing “stripping down” of primary liens to the value of the underlying property, should extend to this case. The defendants argued that second liens should be treated as unsecured, and hence disallowed.

The Court’s unanimous ruling impacts the right of junior lienholders to collect on loans in the event of a debtor’s declaration of bankruptcy and the treatment of previously secured, but subordinate, debt in bankruptcy proceedings.

From the ruling:

Held: A debtor in a Chapter 7 bankruptcy proceeding may not void a junior mortgage lien under §506(d) when the debt owed on a senior mortgage lien exceeds the current value of the collateral if the creditor’s claim is both secured by a lien and allowed under §502 of the Bankruptcy Code. Pp. 2–7.

The debtors here prevail only if the bank’s claims are “not . . . allowed secured claim[s].” The parties do not dispute that the bank’s claims are “allowed” under the Code. Instead, the debtors argue that the bank’s claims are not “secured” because §506(a)(1) provides that “[a]n allowed claim . . . is a secured claim to the extent of the value of such creditor’s interest in . . . such property” and “an unsecured claim to the extent that the value of such creditor’s interest . . . is less than the amount of such allowed claim.” Because the value of the bank’s interest here is zero, a straightforward reading of the statute would seem to favor the debtors.

This Court’s construction of §506(d)’s term “secured claim” in Dewsnup v. Timm, 502 U. S. 410, however, forecloses that reading and resolves the question presented here. In declining to permit a Chapter 7 debtor to “strip down” a partially underwater lien under §506(d) to the value of the collateral, the Court in Dewsnup concluded that an allowed claim “secured by a lien with recourse to the underlying collateral . . . does not come within the scope of §506(d).” Id., at 415. Thus, under Dewsnup, a “secured claim” is a claim supported by a security interest in property, regardless of whether the value of that property would be sufficient to cover the claim. Pp. 2–4.

(b) This Court declines to limit Dewsnup to partially underwater liens. Dewsnup’s definition did not depend on such a distinction. Nor is this distinction supported by Nobelman v. American Savings Bank, 508 U. S. 324, which addressed the interaction between the meaning of the term “secured claim” in §506(a)—a definition that Dewsnup declined to use for purposes of §506(d)—and an entirely separate provision, §1322(b)(2). See 508 U. S., at 327–332. Finally, the debtors’ suggestion that the historical and policy concerns that motivated the Court in Dewsnup do not apply in the context of wholly underwater liens is an insufficient justification for giving the term “secured claim” a different definition depending on the value of the collateral.

If you are struggling with a foreclosure, we may be able to help.  Start by downloading our free consumer guide at the right.