New Jersey Foreclosure Prevention Efforts
For 2009, New Jersey ranked 14th among all states in foreclosure rate, an increase of 1.11% from the year before. Nationally, 2009 was the worse year for foreclosures in US history, with 2.8 million property owners receiving a foreclosure notice.
In New Jersey foreclosures are judicial. When a mortgage payment is 30 days late, the lender can declare the home loan in default. Most lenders in the state are not starting foreclosures until the borrowers are 90 days late. At least 30 days before beginning the court process, the lender mails the borrower a warning letter. In this pre-foreclosure period the borrower can put an end to the process by curing the default. This right may be used by the homeowner only once every 18 months.
The lender initiates a foreclosure through the courts and records the notice of a pending lawsuit with the county clerk. The lender can sue for either the default payments or the home loan’s entire unpaid balance. The borrower is notified of the foreclosure action in person or by publication if necessary. The homeowner has at least 35 days to respond or the court will make a ruling.
If the court rules against the borrower, an auction date for the house will be scheduled. Notice of the sale must be posted on the residence as well as in the county office where the property is located. The notice of sale must be published in two local newspapers, one of which is in the biggest municipality of the county, or the county seat. The borrower must be notified at least 10 days prior to the auction. The homeowner retains redemption rights during the 10 days following the sale. The property owner can be sued for a deficiency judgment if the sale price is less than the mortgage amount.
In 2009 the state assembly passed The Foreclosure Rescue Fraud Prevention Act to protect distressed homeowners from unscrupulous lenders and scam artists.
The state urges homeowners facing mortgage distress to contact their loan servicers: “Call Today, Do Not Delay! The sooner you call the more options you will have.”
Homeowners should also reach out to one of the non-profit US Department of Housing and Urban Development approved counseling agencies listed here.
The state urges homeowners to steer clear of mortgage rescue scams. Be wary of anybody who wants to charge an upfront fee: “Do not pay–walk away!”
For homeowner and occupants facing temporary financial setbacks beyond their control, New Jersey’s Mortgage Assistance Pilot (MAP) Program provides short term financial help in the form of a second mortgage. The assistance is for moderate income homeowners who are trying to keep their homes while facing foreclosure.
The homeowner’s income must be less than 120 percent of the average U.S. median income as defined by the United States Department of Housing and Urban Development. The applicant must have exhausted all other financial resources before qualifying for assistance from the program. The applicant must not be in ongoing bankruptcy proceedings.
The MAP mortgage is not a loan that requires monthly payments and carries zero percent interest. The entire amount is due and payable on cash out refinancing, sale of the property or if the homeowner no longer occupies the property as his or her primary residence. These loans top out at $20,000 and cover no more than six months of payment asssistance. Here is more on the program.
Homeowners in foreclosure should contact the Office of the Courts Foreclosure Mediation Hotline at 888-989-5277 or visit www.njforeclosuremediation.org. The courts in New Jersey require mediation in all cases in which owner-occupants contest foreclosures.
The Foreclosure Mediation Program provides access to housing counselors and court-trained mediators to resolve late payment issues. They try to work out a series of future payments that are affordable. Homeowners in bankruptcy may now participate in this program.
The New Jersey Attorney General urges any victim of mortgage-related fraud to report it to the Division of Consumer Affair’s toll-free hotline at 1-800-242-5846.
If you are a low income homeowner and feel that you’ve been misled by a lender, call Legal Services of New Jersey at 888-576-5529. All residents may file a complaint with the New Jersey Department of Banking and Insurance by calling 800-446-7467.
For more foreclosure help contact the State of New Jersey Housing and Mortgage Finance Agency or download this free brochure.
If you are unable to reach your servicer or local state program, or if you would like additional assistance in this process contact Mortgage Outreach at 1-866-408-0420. Mortgage Outreach works directly with many servicers to help find solutions for borrowers that are struggling to keep up with their payments.
