If you are facing financial hardships, getting a foreclosure notice from your lender is a frightening prospect. However, just because you receive a delinquency notice from your mortgage company doesn’t mean the worst case will happen.
By signing your mortgage papers, you have entered into a contract that you will pay the lender back and that you have agreed to their terms. You breach that contract when you stop making payments. As a result, the lender has a right to take back your home by starting foreclosure proceedings. But there are many steps before that happens -- and many opportunities to get back on track with your mortgage.
Slowing down the process of foreclosure
In New Jersey and elsewhere, foreclosure can begin after homeowners haven’t paid their mortgage for 90 days. Once the process starts, it usually takes an average of 250 days in the Garden State for an uncontested foreclosure to be granted depending upon court schedules.
Since it’s a long process, there is time to take steps that can keep you in your home. These include:
Know the law: New Jersey is a judicial foreclosure state, meaning the lender must file a lawsuit before moving forward with the action against you. Talking to a New Jersey real estate attorney can help you through the process and advise you about how recent legislative changes may impact your case.
Contact your lender: Foreclosure is a time-consuming and costly process, and many lenders would gladly work with you to find a way to keep you in your home and making payments. Some solutions include:
- Refinancing: The lender may offer you a new loan with new terms
- Repayment plan: You and the lender look at your budget finding a payment that fits
- Forbearance: The lender agrees to suspend mortgage payments temporarily
- Loan modification: The lender changes your existing loan to make payments manageable
Contact a HUD-approved housing counselor: Federally-funded agencies in New Jersey partner with various lenders who provide affordable options.
Consider filing for bankruptcy: While taking this option may harm your credit, it could be a solution to reducing or eliminating your debt. It can also give you more time to figure out how to stay in your home.
New Jersey continues to have the highest foreclosure rate
Foreclosures in the United States for the first six months of 2019 fell by 18% compared to the year before, but New Jersey homeowners continue to experience the highest foreclosure rate in all 50 states.
Consulting an experienced real estate attorney can help you deal with the complicated laws and find a way to keep you in your home while looking for the best possible financial outcome.