New Jersey Mortgage Foreclosure Defense Lawyer
If you or someone you know is facing a looming or an existing foreclosure process, a seasoned New Jersey foreclosure defense lawyer can make a difference in the outcome. Foreclosures are challenging and stressful events that can lead to the loss of the home you cherish. New Jersey has enacted laws specifically designed to help people facing foreclosure. There are critical steps that can lead to the mitigation of financial losses and extend the time available to negotiate an income fitting loan modification. There are also legal remedies that can make it possible to recover the home after it is sold at a sheriff’s sale. No one should lose a home and be chased later for a deficiency judgment, which is the amount you may be responsible for paying if the sheriff’s sale of the foreclosed property doesn’t satisfy your debt.
The law firm Young Marr & Associates has skilled foreclosure defense lawyers with an unwavering commitment to helping you obtain the best results possible. Your initial consultation is free of charge and confidential. Call us at (609) 755-3115 to schedule a consultation or contact us online.
The Mortgage Foreclosure Process in New Jersey
Foreclosure is the legal process that allows lenders to receive court approval to force the sale of a property attached to or collateral of a delinquent mortgage loan. New Jersey’s foreclosures are judicial, which means the process is administered through a court of law.
While the average New Jersey foreclosure can take between 8 to 10 months, time literally means mounting expenses for the borrower who has fallen behind in payments already. Foreclosure defense lawyers can have a significant impact in possibly:
- Mitigating penalties, damages, interests, and other fines that can accrue over time.
- Preventing or mitigating the risk of a deficiency judgment that typically seeks payment of the debt remaining if a foreclosure sale doesn’t cover the balance owed in the mortgage.
When a homeowner fails to make payments on their mortgage for three months, the foreclosure process will begin. The mortgage borrower will be made aware of the start of the process when they receive a Notice of Intention to Foreclose. After the homeowner receives this notice, they will have 30 days to either respond or pay the past-due amount that they owe.
After 30 days, the lender will file a foreclosure complaint against the mortgage borrower with the New Jersey Office of Foreclosure; after this has been filed, the mortgage borrower will be the “defendant” and the lender will be the “plaintiff.” Notice of the complaint will be served to the borrower in person. Along with the notice of foreclosure, they will be served a summons to appear in court for the foreclosure hearing, as well as information about how they can participate in a foreclosure mediation program.
The mortgage borrower has 35 days to respond to the foreclosure complaint. The reply that they file must be an admittance or denial of the claims made in the foreclosure complaint. If the mortgage borrower does not deny the claims made against them, then the foreclosed property may be sold. The sale will begin when the homeowner receives notice of the sale of the property, which they will have 10 days to respond to.
Federal and State Foreclosure Laws in New Jersey
There is a rich body of laws intended to protect borrowers who fall under difficult financial circumstances. Foreclosure laws can help establish “defenses” in order to protect New Jersey borrowers against usurious and abusive lenders. There are important legal rights connected to the lender’s actions in compliance with federal and state laws. Defenses expose actions where the lender may have dismissed or blatantly violated laws constituting abuses, servicing errors, and wrongful or fraudulent practices. For example, charging excessive fees is illegal in New Jersey, especially if there is abuse, misleading acts, or lack of notice of these high fees.
Foreclosure defense can also provide critical time to work out a loan modification, to conduct a short sale, or to bring the loan payments current. If these arrangements don’t work and the court deems there are valid questions, then a trial may be held to review the questions raised in the answer to the foreclosure complaint.
State Foreclosure Laws
- The Fair Foreclosure Act provides the rules lenders must follow before and during foreclosure.
- New Jersey’s Consumer Fraud Act protects consumers against unconscionable and fraudulent practices.
- New Jersey’s Truth in Consumer Contracts, Warranty, and Notice Act prohibits lenders from including provisions in a contract, warranty, or notice that violate clearly established legal rights.
Federal Foreclosure Laws
- The Truth in Lending Act (“TILA”), also known as Regulation Z, defines that meaningful disclosure of credit terms is a protected legal right. Consumers are entitled to information that could lead them to avoid bad credit decisions. A TILA violation can be raised as a defense in a foreclosure action if the lender failed to provide the required disclosures.
- Regulation X is the common term for amendments to the Real Estate Settlement Procedures Act known (“RESPA”). Specific disclosures and procedures are required during the application, settlement, and servicing of mortgage loans.
Defending Against Mortgage Foreclosure in New Jersey
New Jersey residents should be aware of both federal and state laws that help protect homeowners from unfair practices, prepare for loan modifications, and enter into payment plans to pay off mortgages that they fall behind on.
New Jersey’s borrower protections include The Fair Foreclosure Act; The Consumer Fraud Act; and the Truth in Consumer Contacts, Warranty, and Notice Act. The Fair Foreclosure Act states the rules that lenders must follow before and during the foreclosure process. The Consumer Fraud Act protects consumers from being victims of fraudulent actions made by lenders. Finally, the Truth in Consumer Contacts, Warranty, and Notice Act prohibits lenders from violating borrowers’ legal rights.
The Truth in Lending Act and The Real Estate Settlement Procedures Act are both federal laws that protect mortgage borrowers during foreclosure. The Real Estate Settlement Procedures Act, which is also known as RESPA, requires lenders to disclose information during applications for mortgage loans. The Truth in Lending Act, which is also known as TILA or “Regulation Z,” states that consumers are entitled to information about bad credit.
Mortgage borrowers that are facing foreclosure should be aware of the defenses they may be able to use against the complaint. When mortgage borrowers respond to a foreclosure complaint, they have the opportunity to address any unfair practices on the part of the lender. If the homeowner cannot demonstrate that the foreclosure is the result of unfair lending practices, then the case will move to a superior court and will be assigned a judge and a date for trial. Homeowners facing foreclosure are able to use these possible defenses to prevent the foreclosure of their homes:
- Servicing violations – If a lender violates servicing and modification requirements, they will not be able to foreclose on the home owned by the borrower.
- Truth in lending violations – Lenders that violate truth in lending laws will not only be unable to foreclose on homes owned by mortgage borrowers but may be liable to pay damages to the borrower.
- Lender fraud – According the New Jersey Consumer Fraud Act, lenders that commit fraud while issuing loans to mortgage borrowers may be liable to pay damages and attorney fees to borrowers that were victims of the fraud.
- Lack-of-note – Some lenders are not authorized to foreclose on homes. For example, if a loan is transferred to a new servicer, then the original loan servicer will be disqualified from pursuing foreclosure on the home.
Homeowners that are dealing with the possibility of foreclosure should seek an experienced foreclosure attorney to help them understand the laws that are meant to protect them as well as the ways that they can prevent the foreclosure from happening.
A lender must send a Notice of Intention to Foreclosure to a homeowner before filing a complaint in foreclosure. The Fair Foreclosure Act requires that the notice be sent registered or certified mail, return receipt requested. The notice will indicate the amount the mortgage is delinquent and will provide 30 days to cure the default. Other important information that the notice is required to provide includes:
- The interest the lender has in the property, including information about the mortgage, address of the lender, and if there is legal representation engaged.
- The notice must include instructions on how to cure the default and the full reinstatement cost. It is important to note, during this period, the lender cannot charge attorney’s fees or court costs. Additionally, the lender must provide 30 days to cure the default.
- A statement must be included indicating you have the right to sell or transfer the property during the foreclosure process.
- The notice will advise you of the importance of retaining legal representation, including contact information for the local county attorney referral service.
- A list of available resources to cure the deficiency will be provided, including contact information for the New Jersey Department of Banking and Insurance.
- And finally, the notice will contain information about New Jersey’s foreclosure mediation program.
The Foreclosure Complaint and Mediation Program Option
The lender must file the complaint with the Office of Foreclosure. You will be the “defendant” in this complaint. The lender must personally serve you with summons or notice to appear in person at a specific date and time for a hearing. The option to participate in the mediation program will be included with the foreclosure complaint. There are 60 days to request mediation. But agreeing to mediation doesn’t stop foreclosure.
The foreclosure mediation program allows homeowners the opportunity to find a solution and avoid foreclosure. The homeowner will meet with the lender, along with a mediator, to discuss alternatives to foreclosure such as a loan modification or a forbearance agreement. Our experienced foreclosure attorneys are available to provide legal assistance and representation for homeowners participating in the mediation program.
The Answer to the Foreclosure Complaint
You have 35 days to answer the Foreclosure Complaint. The legal answer is a formal document filed in response to the foreclosing lender’s claims. The answer is where you deny or admit the assertions or charges alleged against you in the complaint. The foreclosure will proceed if your answer doesn’t oppose the lender’s allegations with valid arguments.
Defenses available must be included in the answer. This means you must state the reasons why the lender doesn’t have a valid claim. When this happens, the case will be transferred to the superior court unit near your home and assigned to a judge who will set a trial date.
If you don’t answer the complaint and you’re not able to repay the debt in arrears, the court can issue what is known as a writ of execution ordering the sale of the property. A notice stating the date and time of the sale must be sent to you.
Rights of Redemption of Sold Property in New Jersey
A New Jersey homeowner whose property was sold at a sheriff sale has 10 days, or until a court issues an order confirming the sale if objections had been filed, to redeem the property, either through refinancing, selling the property, or some other alternative.
New Jersey also provides homeowners a right to redeem should the lender obtain a deficiency judgment after the sheriff sale. If the property sold for less than the total amount owed on the mortgage, a lender can file a complaint for a deficiency judgment to obtain a personal judgment for the remaining balance. If the judgment is entered, the homeowner has six months to redeem the property. However, if the deficiency amount is disputed, the homeowner loses their right to redeem.
How Our New Jersey Foreclosure Defenses Attorneys Can Help
At Young, Marr, Mallis & Associates, our seasoned mortgage foreclosure defense attorneys have several options to stop, or delay, a foreclosure on your home.
Mortgage lenders have programs allowing homeowners to modify their loans. The process is complex, requiring considerable documentation form the homeowner. Our New Jersey attorneys assist our clients in navigating the process securing loan modifications that lower interest rates, monthly payments, and possibly eliminating a portion of the principal amount owed.
New Jersey has set up a mortgage mediation program, through the court system, for homeowners and mortgage lenders to attempt to find a solution instead of continuing with the foreclosure. At Young Marr & Associates, we have experienced mediation attorneys who have negotiated workable agreements on behalf of our clients.
One defense to a mortgage complaint requires the mortgage lender to prove ownership of the original note. If a mortgage lender is unable to produce the adequate documentation evidencing that they are the proper party to bring a foreclosure complaint against you, our attorneys could use this information to defeat the foreclosure complaint or to enter into a favorable settlement agreement.
Your mortgage lender must comply with all servicing requirements. Any violation or abuse might be used to force a settlement agreement.
Perhaps maintaining possession of the property is not finically feasible. In those instances, our lawyers can negotiate two options to avoid foreclosure. First is a short sale, where a lender agrees to take an amount less than the total mortgage obligation due, in full satisfaction of the loan. The other is a deed in lieu of foreclosure, or turning the property over to the lender without going through the lengthy and costly foreclosure process. Our attorneys will work with the lender to ensure the most beneficial agreement for our client.
Bankruptcy as a Mortgage Defense in New Jersey
Often, the most cost-effective and surest way to combat a mortgage foreclosure in state court is through the federal court. Chapter 13 bankruptcy not only stops an ongoing foreclosure lawsuit or a scheduled sheriff sale, but it might offer the homeowner a manageable way to cure the mortgage default.
Bankruptcy, a legal matter under federal jurisdiction, is a process designed to help individuals gain a fresh financial start through the elimination of debt or the restructuring of their debt. Few debts can seem as overwhelming as a mortgage delinquency, especially when you could lose your home.
Acting quickly will not only ease your mind, but it could also save you additional attorney and court costs the mortgage company might charge.
If a homeowner is behind on their mortgage due to an interruption of regular monthly income, illness, or any other significant financial setback, it is likely that their lender will not offer a manageable resolution. Often payment plans presented by mortgage lenders are too short in duration to allow for a reasonable chance of success. Additionally, many homeowners, due to their current financial state, are not eligible for the mitigation programs offered. Under those circumstances, filing for a Chapter 13 bankruptcy might be the most prudent option.
The attorneys at Young, Marr, Mallis & Associates have over twenty years of experience assisting New Jersey residents holding onto their homes that have fallen into foreclosure. Through filing for bankruptcy, a homeowner who is behind on their mortgage payments could pay back the money owed over three to five years. Depending on the facts of a case, the debtor may also benefit from having a substantial amount of unsecured debt eliminated, lowering their monthly expenses, and making their bankruptcy and mortgage payments more manageable.
Chapter 13 bankruptcies are complicated, and each case will present a unique set of challenges. Our skilled New Jersey bankruptcy attorneys will thoroughly review your financial situation, evaluating your income, expenses, assets, and the type and severity of your debt to determine if bankruptcy is an option for you. We will review all of the benefits bankruptcy could have in your present situation, along with any potential adverse effects. The critical thing to remember is that a Chapter 13 bankruptcy will stop the foreclosure action against you, and if your house is scheduled to be auctioned, the bankruptcy is one of the only ways to ensure stopping a sheriff sale.
Call Our New Jersey Foreclosure Attorney Today
Foreclosure actions can be incredibly overwhelming, and there are a lot of mistakes made that an experienced New Jersey mortgage foreclosure attorney can identify while there is time available to fight the foreclosure. The attorneys of Young Marr & Associates can help you make informed and financially sound decisions. Call today at (609) 755-3115 for a free and confidential consultation.