Dubiln Packard

New Jersey

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Atlantic City Foreclosure Rate Highest In The Country

atlantic city foreclosures1 in 257 homes in Atlantic City is in foreclosure.

Realty Trak reported in October that Atlantic City has the highest foreclosure rate in the Country (and Trenton is second) (see article here). There was a foreclosure complaint filed on one in every 257 homes in Atlantic City in October.  This is four times the National average.  Foreclosure filings in Atlantic City rose 14% from September to October.

Atlantic City is suffering from the decline of casino gambling with four major casinos closing resulting in massive lay-offs.

New Jersey overall has one of, if not the, highest rates of foreclosure state wide.  Why?

Statewide, 1 in every 171 households have had a foreclosure complaint filed against the property. This is more than double the national average. And not just foreclosure complaints, but New Jersey is first in delinquencies too which is a leading indicator of foreclosures coming.

High Property Taxes.

New Jersey property taxes are the highest in the Nation.  Everyone here in New Jersey knows their property taxes are high.  And, our roads and bridges continue to crumble and our public transportation system is in a serious need of upgrading. Where is the money going?

Jobs are leaving the State.

High property taxes scare away potential employers and cause existing employers to leave the State to save on wages and corporate property taxes and the general high cost of living.  Property taxes have also been a major factor in slowing the recovery in home values keeping them flat or worse following the drop in 2008 and 2009.

After effects of hurricane Sandy.

Hurricane Sandy also contributed to a drop in real estate prices and, when coupled with slow or negative  job growth, has kept home prices low.

Decline in Atlantic City casino gambling.

Atlantic City has suffered greatly from competition from other States that have opened casino gambling causing casinos to close and workers to be laid-off.  According to figures released by the Division of Gaming Enforcement, Atlantic City’s casino industry lost 4,000 jobs in the 12 months prior to August. Subtracting the newly closed Revel, Showboat and Trump Plaza workforces, and the possible 2,800 job losses at Trump Taj Mahal, and the area could soon have nearly 12,000 fewer jobs than it did in August 2013, not taking into account possible new jobs at the remaining casinos.

Christie hasn’t helped.

What has Governor Christie (remember him?) done to help?  In short – nothing.  There have been a number of policy decisions by the Christie administration that have worsened the foreclosure crisis in New Jersey: In 2012 Christie used the $75 million the state was awarded in a multi-state settlement with banks over mortgage industry abuses to close a budget gap.  That same year New Jersey took longer than any other state to give out federal funds for unemployed homeowners who couldn’t pay their mortgages during the recession.  New Jersey also didn’t join a lawsuit against Bank of America, which ended in a settlement that provided other states millions of dollars for foreclosure relief.

What Can You Do If Your House Is In Foreclosure?

First, determine if your house is worth saving.  Is your loan underwater?  Is there hope that the value will recover and you can sell the home in the near term?  Is it worth paying what you would have to pay each month if you get a loan modification?

Second, if you determine you want to save your home, apply for a loan modification.  If you cannot obtain a loan modification, you may need a chapter 13 bankruptcy.

Be careful of scams.  With all of the press Atlantic City has received lately, there are plenty of people who  will try to take advantage of the situation.  Be careful.

 

 

 

 

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Will I Qualify For a Loan Modification

will i qualify for a loan modificationYou Want To Qualify For A Loan Modification: How Will You Know If You Qualify?

To Qualify for a loan modification can be frustrating but wouldn’t it be helpful to know if you qualify right now?  There is a simple rule of thumb that you can use.  Compare your income to your new estimated monthly payment after a loan modification.  This will let you know if the bank thinks you can afford the monthly payments.

How Do You Know If You Can Afford The Monthly Payments?

To know whether or not you can afford the monthly payments, you must pass an income test. You must have the correct ratio of income to mortgage payments.

If you cannot pass the income test, and cannot afford the monthly payments, the only thing you can do to fix this is by adjusting your income.

 

How Can I Increase My Income To Qualify For A Loan Modification?

  1. Look for a second job to supplement your income.
  2. Rent out a room in your house.
  3. Encourage your kids to contribute to the household.

For More Information About Loan Modifications, See My Complete Article:

Read our post: How To Get A Loan Modification. 

Good Luck!

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Two Biggest Reasons People Fail To Get A Loan Modification

loan modification frustrationDid you fail to get a loan modification?  Here are the Two Biggest Reasons People Don’t Get Loan Modifications and how to avoid them.

Reason 1. The single biggest reason people fail to get a loan modification is: they don’t submit all of the documents requested. You must submit all of the documents requested.

Reason 2. The second biggest reason people fail to get a loan modification is: they’re not submitting the documents in a format that the bank accepts; they are very specific in the way that they require you to send in documents.

Don’t Fall Into The Trap.

 

Don’t want to fail to get a loan modification?  Don’t make these two mistakes.

We suggest you submit everything at one time and don’t leave anything out to submit later.  Also, when the bank advises you that something is missing or outdated, submit what they ask for right away – don’t wait.  This will save you an enormous amount of aggravation and frustration.  Most, if not all of the documents the bank is requesting must be the most up-to-date version of the document that is available.  If it is June and the bank asks for the 3 most recent bank statements, submit statements for April, May and June rather than March, April, and May.

For More Information.

To find out more about how to get a loan modification, read our post: How To Get A Loan Modification. 

Good Luck!

 

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How To Get A Loan Modification

How To Get A Loan ModificationTrying to get a loan modification can be very frustrating.

So many people we talk to tell us they have been trying for months to get a loan modification…only to get the runaround from their lender.

But First, What Is A Loan Modification?

A loan modification is changing the terms of your existing loan with your existing lender.  By the way, it is not a “re-modification.”  What terms?  First, if you are behind on your payments – we call those missed payments the “arrears” – you have to catch up.  In a loan modification, the arrears are added to the principal balance.  Then, you get a new – hopefully lower – interest rate and then the number of years is reset to zero and now you have a new 30 or 40 year loan with a new principal balance and a new internet rate.  Hopefully, all of that translates into a new monthly payment you can afford.

That last part is important.  “…you can afford.”  If you can’t afford to make the payments, you won’t qualify for a loan modification. If you want to find out if you qualify for a loan modification, read our post: Do I Qualify For A Home Loan Modification?

How Do You Know If You Can Afford The Monthly Payments?

There is a simple rule of thumb to help you know right away whether or not you will qualify for a loan modification.  Take your gross monthly income and multiply by 0.30.  That’s 30% of your monthly gross income.  That number is where your lender likes to see your monthly payment. If you are self-employed, there are special considerations. If you want to find out if you qualify for a loan modification if you’re self-employed, read our post: Will I Qualify For A Modification If I Am Self-Employed? 

If I Don’t Qualify, Where Can I Get More Income?

  1. Get a second job.
  2. Rent out a room.
  3. Get your kids to contribute.

Ok, I Think I Can Qualify.  Now What?

All of the banks use pretty much the same forms.  Go to your bank’s website and search for the form.  Or, you can contact your bank directly and have them send you the package of forms. Complete the forms and attach all of the documents requested by the bank.

The Biggest Reason People Don’t Get Loan Modifications.

The single biggest reason people don’t get a loan modification is: they don’t submit all of the documents requested.  You must submit all of the documents requested.

Be Patient:

It may take 3-6 months of calls, faxes, emails, letters etc. to get help before you get relief.

Good Luck!

 

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Foreclosure Time Line In New Jersey

foreclosure time lineHow Long Does It Take in New Jersey to process a residential foreclosure action from start to finish?

The foreclosure time line in New Jersey has a number of variables depending on how the borrower reacts to each step along the way.  New Jersey’s Fair Foreclosure Act specifies, albeit indirectly, the minimum time frames necessary to process a residential foreclosure action in New Jersey.  At minimum, a un-contested residential foreclosure action can take as little as 169 days or, at maximum, as long as 200 days. This assumes the borrower is not working with an attorney and either did not file an Answer to the Complaint or filed what would be deemed a “non-contesting” Answer.

There are a number of basic steps to processing a foreclosure action in New Jersey.

Step One: Assuming default has occurred, the lender or its attorney must first notify the borrower that it is in default and that it has a right to cure that default 30 days prior to filing a Complaint in Court.

Step Two: File a Complaint with the Court, serve the Complaint on the borrower along with a Summons notifying the borrower that it has 35 days to file an Answer.

Step Three: assuming no Answer is not filed, the lender will ask the Court to enter a Default Judgment.  This usually takes about 30 days.

Step Four: Notice to the borrower that it intends to file for entry of final judgment providing the borrower with 14 days to notify the lender that it has a good faith ability to cure within 45 days.

Step Five: Lender files it proofs to enter Final Judgment.  This usually take 30 days.

Step Six: Final Judgment is entered and a Sheriff Sale is scheduled, borrower notified and the sale date is advertised in the official newspapers for four consecutive weeks.  28 days.

Step Seven: Sheriff Sale is completed.

Step Eight: Right to redeem expires and deed is transferred to buyer. 14 days

Total 181 days.  This is the minimum.

If your case proceeds as an un-contested action, 181 days is the shortest amount of time to fully process a residential foreclosure action in New Jersey but often it takes longer than this 181 days.

Bank Delays In Hopes of an Improved Real Estate Market.

Banks, particularly in a situation where the value of the property may not be as much as the amount of the loan, will delay a foreclosure in the hopes that the value of the property will increase over time.  In the meantime, they don’t aggressively process the case after the default judgment is obtained. There is a risk on the part of the lender, if either the Court or the borrower believes the lender is not in good faith processing the case, that the case might be dismissed for lack of prosecution.

Backlogs Can Add More Time.

Both lender attorneys and courts have been very backlogged with the large number of cases in process since the financial and housing crisis of 2008.  It has been typical for foreclosure cases to take as long as 1000 days to process through the courts simply because of the large number of cases that have to be processed.

Optional steps that can prolong the process.

There are a couple of instances in the above steps where the borrower can add some time.

Optional Step One: In Step Three above, file an Answer within the 35 days provide for in the Summons.  Although the Court may deem your Answer as “non-contesting” without a hearing, it may allow your case to proceed as “contested” if you file an Answer that raises certain facts about the loan. In such a situation a case management hearing will be held and the case will be schedule for a trial. It is very typical in this situation, though, that the lender will file a Motion For Summary Judgment challenging your Answer and have it deemed “non-contesting” and send it back to the foreclosure division for processing in the normal course.  This entire process could however add a minimum of 30 days to the process and often longer.

Optional Step Two: In Step Four above, the borrower could notify the lender that it has the ability to cure.  This could add 31 days to the process.

Optional Step Three: A borrower is entitled to two 2-week adjournment of the Sheriff sale for any or no reason.  This could add an additional 30 days to the process.

Optional Step Four: Even though the property may have been sold at a Sheriff sale and you the borrower and homeowner have been ordered to vacate the property.  If you don’t, the new owner will have to evict you as if you are a tenant at the property.  This could add at minimum 14 days to the process but often adds 30 to 90 days if the judge believes you really need time to find a new home to move to.

Litigation As An Option.

Everything discussed above assumes you have not hired an attorney and do not have a valid defense to the foreclosure action.  After consulting with an attorney, you may determine that it is to your benefit to contest the foreclosure action and fight back.  This changes everything above.  The time frames for a contest action are subject to much variation but more than likely would be much longer than the time frames set forth above.

Practically Speaking What Are the Time Frames I Can Expect?

Generally in New Jersey, we have been seeing cases take 18 to 36 months and sometime much longer than that if the lender simply does not process the case.  However, backlogs have been reduced quite a bit as of this date in mid-2015 and I just saw a case yesterday that went from Complaint to Sheriff sale in less than 12 months.

Every case is different.