How to Avoid Foreclosure in New Jersey
It is not at all uncommon to fall a month behind on your mortgage. If it is caused by a simple mistake or you one difficult month, then it’s not something to worry about if you can and intend to rectify it immediately. But what if you are a month or two late and you realize that due to a family hardship, crisis, or change of circumstance you can’t afford to keep making your mortgage payments? In those situations, it is crucial to act quickly.
Don’t delay, get on the phone immediately and talk to your lender or real estate professional. There is no automatic deadline and each lender is different, but the one common denominator is that you want to be the one to act first and not wait for a notice of default. For one thing, you may decide that the best way out of the situation is to sell the house.
Talk with Your Lender and a Professional
In our area you want to contact your lender right away, or speak with one of your local Burlington short sale lawyers who can assist you in this process and provide options for you, usually at no cost to you. If you don’t start moving quickly, you lender will move forward toward foreclosure once it sends you a notice of default—usually after you’re three months late on your payments.
One option is to hire a good real estate agent to try to sell your property outright and then pay the lender the amount you owe. However, if you already know that the sale price of your property will most likely be less than what you owe on the mortgage some more help is needed. That is because professionals experienced in short sales may be necessary to help you negotiate with the bank so that the lender will accept less than the full amount owed and release you from any further debt. The lender will probably tell you a date by which you need to find a buyer and close the deal, because the lender may not let you stay in the property and not pay a mortgage indefinitely.
If you are struggling with your mortgage but would like to keep your home, your lender may modify your loan if you have an adjustable rate mortgage or if you are several months behind on your mortgage. You should call and ask to speak with your lender’s loan modification or loss mitigation department. The lender may make a number of accommodations for a few months while you attempt to get approved for a modification. For example your lender may agree to accept partial payments (although you may have to make up the difference later), accept a late payment, or agree to modify the terms of your loan.
If your lender doesn’t want to work with you, you should contact a HUD-approved housing counselor for help negotiating with your lender. HUD-approved housing counselors work for free and are well versed in various foreclosure prevention programs. There are a number of different plans offered by the federal government to help homeowners avoid foreclosures as part of the Making Home Affordable program.
In any event, it is important not to make decisions about a short sale or loan modification alone. Help is available—often free of charge—to provide counsel so that you are fully versed on your options before finalizing any decision. In our area, contact the Moorestown real estate lawyer at our firm to learn more.