Help Is Available for Struggling Homeowners in New Jersey
Learn more about foreclosure proceedings in New Jersey and how you may be able to save your home.
July 17, 2011 /24-7PressRelease/ -- Despite signs of a slowly recovering economy, lingering effects of the recession are still hitting New Jersey homeowners hard. Last year, 58,445 foreclosure complaints were filed in the Superior Court of New Jersey, making 2010 the second-worst year for the state's homeowners since the recession began.
Unfortunately, historically high foreclosure numbers are continuing into 2011: in May 2011, one in every 3,509 housing units statewide was the subject of a foreclosure filing. This comes as little surprise given the May increase in New Jersey's unemployment figures that brought the total to a staggering 9.4 percent.
Although making mortgage payments is a challenge for many in the Garden State, a new government program is set to provide relief. With the proper assistance, New Jersey residents can explore government initiatives and legal options that may help them save their homes.
The New Jersey HomeKeeper Program
In May 2009, New Jersey launched a new program aimed at keeping unemployed or underemployed residents in their homes. Known as the New Jersey HomeKeeper program, the initiative provides temporary relief to struggling homeowners by offering a zero interest, deferred-payment second mortgage loan that can total as much as $48,000 over a term of 24 months.
The loan can be used to cover a variety of mortgage-related costs, including making up delinquent payments or covering a portion of current monthly payments, paying property taxes, or taking care of property insurance expenses. The loan must be repaid in full upon the sale, transfer or refinancing of the home if it occurs within five years of receiving the HomeKeeper loan. But, if the homeowner remains in the home for longer than five years, 20 percent of the loan balance will be forgiven each year afterward until the full loan amount terminates at the end of the tenth year.
To be eligible for the New Jersey HomeKeeper program, a homeowner must:
- Have become unemployed or suffered a drop in income of 25 percent or more during the past 12 months, causing hardship in making mortgage payments
- Receive the loan for a one- or two-unit building that is his or her primary residence
- Not owe more than $429,619 on the mortgage for a single-unit building or $550,005 for a two-family home
- Not have had more than one 60-day late payment in the 12-month period before the loss of work or reduction in pay
- Meet other real-estate ownership and financial requirements
For people who do not qualify for the HomeKeeper program, or who do but are still worried about foreclosure, there may be other avenues to pursue to help them keep their homes. Knowing the basics of how foreclosure works in New Jersey can help homeowners better understand their options.
Foreclosure in New Jersey
New Jersey is a judicial foreclosure state, meaning that the only way for a lender to foreclose on a residence is by filing a complaint in Superior Court. After a complaint is filed, the homeowner must respond with an answer within 35 days or face a default judgment.
If a lender is ultimately successful with a foreclosure complaint, a document known as a writ of execution is given to the local sheriff to begin the process of a foreclosure sale. Unless the homeowner is able to come up with the complete unpaid mortgage balance plus costs within 10 days, the home will be forfeited and the proceeds from a public sale of the home will be given to the mortgage lender.
However, even if a foreclosure complaint is filed, homeowners have some time to resolve their debt issues. Even an uncontested foreclosure proceeding in New Jersey, given the volume of the proceedings filed, can last well over one year from beginning to end, and it can take much longer if the homeowner contests the action in court, requests more time to respond or files for bankruptcy.
Filing for Chapter 13 bankruptcy, for instance, automatically stops foreclosure proceedings and gives homeowners with steady incomes an opportunity to develop repayment plans for their debt. Regardless of whether a homeowner files for bankruptcy, though, the time before a foreclosure is finalized can be used to consider the best legal challenges to the foreclosure or to investigate government aid programs that help people save their homes. However, if foreclosure is a possibility, it is better for homeowners to begin their defense or consider their options well before they are served with notices of the foreclosure proceedings.
An Attorney Can Help
If you are having trouble making your mortgage payments, contact an attorney as soon as possible. It is preferable to get in touch with a lawyer at the first sign of problems as there are a greater number of viable options early on. But, even if you are already facing foreclosure, there are legal tools available that could help you stay in your home.
If you are overwhelmed with debt, a knowledgeable bankruptcy attorney can advise you on the best strategy for your unique circumstances, whether it is mortgage-loan modification, filing for bankruptcy, contesting a foreclosure in court, applying for benefits provided through government programs, or other approaches.
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