If you fall behind in your mortgage payments, your bank or mortgage lender may take action to repossess your home. After all, it’s not technically your home until you’ve paid the mortgage in full. Until that time, you AND the bank own the home. So if you don’t hold up your end of the bargain, the bank could come knocking. And the news won’t be good! The good news is, there are tactics you can use to avoid foreclosure now in NJ.
The legal proceeding is known as a “foreclosure,” and will result in the loss of your home, foreclosure fees, additional legal fees, and possibly a deficiency judgment if your outstanding liens exceed the current value of your home. Your credit will also be shot when all is said and done.
The foreclosure process usually goes something like this:
You lose your job, become ill, or simply have trouble paying your mortgage after your adjustable-rate mortgage resets. Unfortunately, these aren’t typically valid reasons to miss your mortgage payments.
When you originally applied for your mortgage, you probably verified asset reserves to prove to the bank that you could afford to pay the loan for a certain period of time, even if you failed to receive additional income for some period of time.
Once you miss your first payment, the bank or lender will hit you with a 30-day late. At this point your credit will take a huge hit, and a representative from the bank or lender may call you, or send you a notice in the mail regarding your failure to pay on time. But don’t fear, there are actions you can take to avoid foreclosure now in NJ.
The bank or your loan servicer may also discuss a forbearance plan with you to resolve the missed payment and get you back on track. This is basically a special payment plan the bank/servicer sets up with the borrower to either lower payments or suspend payments so you can continue paying your mortgage.
Alternatively, there’s the possibility you could take advantage of a special refinancing or loan modification program to make your payments more affordable going forward. But you will still need to prove to them that you’ll be able to handle the new financing terms.
If you fail to speak with your lender/servicer, and continue to miss mortgage payments, you will be hit with a 60-day late, followed by a 90-day late. That will impact your credit pretty significantly, and any chances of refinancing or seeking a forbearance plan may be lost.
Once you hit the 90-day late mark, the bank or lender will send a Notice of Default. The NOD essentially states that you have 30 days to make the payment current, appear in court, or face the risk of a foreclosure. This is the time to take immediate action to avoid foreclosure now in NJ. If 30 days go by and you fail to appear in court or make your payments current, the court can schedule an auction to sell your home within 7 days. After this time there is little you can do to avoid foreclosure now in NJ.
If the auction ends without a buyer, the bank or lender will gain ownership and likely perform maintenance on the property, clear up any title issues, then put it on the market.
After paying legal fees, foreclosure fees, late fees, and losing your home, you’ll be hit with a huge ding on your credit report. A foreclosure will drop your credit score dramatically and prevent you from borrowing from A-paper banks for many years to come. Also beware of foreclosure scams, they are rampant. If you decide to work with a foreclosure help firm, first do your research.
To avoid foreclosure now in NJ contact Scotty Buys Homes! We can help you understand the foreclosure process in NJ.
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