An increasing number of homeowners are defaulting on their mortgages. If you have been forced to make this difficult decision, don't be dismayed, there are still legal options available to you.
Two Types of Foreclosure: Contested & Uncontested
Even if you agree that you have stopped paying a debt that you owe, you may not agree that the Bank has a right to foreclose. The most common problem faced by homeowners is that their loan has been sold to numerous different banks and they can't be sure that the lender that is suing them actually owns the loan.
Another issue is that the homeowner believes they owe far less than what the bank claims, but believes the bank has made errors in computing the amounts due, illegally raising the face value of the loan under an Adjustable-Rate-Mortgage, through fees, costs, and penalties, or for other reasons.
A third recurring problem is that the loan was not what the homeowner expected, but was procured through fraud.
NJ Foreclosure Mediation Focuses on Ability-to-Pay Workouts
If you or your attorney are having difficulty getting bank representatives and loss mitigation personnel to work with you on your loan, a professional mediator will assist you in trying to reach a resolution with the bank.
Information is available online at http://nj.gov/foreclosuremediation/. You can also call 1-888-989-5277.
Issue #1: Ability to Pay - If you can demonstrate ability to pay, even a lesser amount than is being required, you may be able to work out a deal where you stay in your home. As a "rule of thumb" you need to show that your income is at least three times the mortgage amount you are seeking, inclusive of taxes and all fees.
Types of mortgage modifications and workouts include:
Extension of term (30 year to 40 year)
Reduction of interest rate
Conversion of an adjustable rate to a fixed rate