Real Estate Attorney Discusses Increase in New Jersey Foreclosure Filings
According to a story in the Asbury Park Press, New Jersey currently has the second-highest rate of homes in foreclosure. The Mortgage Banker’s Association recently explained that 8.4% of all homes in the state were in foreclosure. Second only to Florida, New Jersey will likely see even more filings in the coming year.
The Reason for the High Foreclosure Rates
The recent increase is a result of a 2010 moratorium on foreclosure filings in the state. The courts ordered this moratorium because lenders frequently lacked adequate documentation when filing for foreclosure. However, since the moratorium was lifted in August 2011 the backlog has begun clearing out—the state is now on the brink of seeing a vast increase in the number of home loans in foreclosure. In addition, the process in our state can take approximately three years, dragging out an ultimate resolution in each case for quite some time.
Whereas other states seem to be digging their way out of the foreclosure crisis, New Jersey is in the middle of it all. Making matters worse is the fact that New Jersey lacks a proper program to effectively deal with the long-term consequences for families as result of the rise in these filings.
Alternatives – Short Sale
Our New Jersey real estate attorneys know that many people deplete their savings and use their credit cards to the max in an attempt to pay their mortgage—it is often not enough. After exhausting all of their financial resources, some families assume that there are no other options to avoid foreclosure. That assumption is often wrong.
For example, to avoid the risk of foreclosure in our area, our Moorestown real estate attorney may be able to help you work with the bank to come up with alternative arrangements. One option is a “short sale.”
A short sale occurs when a lender accepts less than the total debt due on your home. A homeowner is allowed to sell their home for less money than they owe on the mortgage. If a short sale is done properly, you will be able to avoid the foreclosure process and the bad credit that often results from it. Short sales can have many benefits to homeowners, the first of which is that you control the sale as opposed to your bank. Additionally, the sale of your home will be treated much like any other home on the market, and your family will not have to deal with the stigma attached to a foreclosure.
However, the short sale process is often complicated – not all homeowners qualify, and you may face a lender who will not accept a short sale. To qualify for a short sale your mortgage must be close to being in default and the total amount of available family assets may be taken into consideration. In addition, many lenders won’t accept a short sale unless the property value of the home has decreased.
For these reasons, it is important that you have a skilled real estate attorney who can walk you through the process and advise you on the best options for you and your family. As the number of home loans in foreclosure continues to rise in our state, the Burlington County foreclosure lawyer at our firm remains available to work closely with all New Jersey residents, and help them avoid the stressful, time-consuming foreclosure process. In most cases, your lender will pay all attorney fees on your behalf.