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Many mortgages ending up in the courtroom

Even though the real estate market meltdown has ended, a huge number of New Jersey homeowners are still facing foreclosures that some legal advisers say could be questionable. In addition to seeking out information on bankruptcy options, many of these homeowners are also filing lawsuits against debt collectors.

Some homeowners are finding that the mortgage service companies they contracted with in order to help act as middle-men between themselves and their main mortgage companies actually did more harm than good. In some cases, debtors have found that these companies have falsified documents and failed to transfer ownership of the property when necessary. In other cases, homeowners have discovered that mortgage service companies are hiring contractors to portray themselves as the mortgage creditor in order to receive loan payments.

In the lawsuits, debtors say the foreclosures, which they allege are incorrectly done, have harmed their credit and led to ongoing financial difficulties. Legal battles are wearing on in courtrooms around the state. These cases could end up in favor of the mortgage company, or with a judge ruling in favor of mortgage forgiveness or even debt reduction.

The financial difficulties that can result from a homeowner getting in over his or her head on a mortgage can be devastating. In addition ruining a personal credit score, payments and late fees on mortgages can take funding away from other aspects of the debtor’s life. A consultation with an attorney who has experience in bankruptcies and foreclosures can be beneficial for a debtor who is trying to decide what he or she wishes to do next.

Source:, “Foreclosures prompt lawsuits against debt collectors in N.J. “, Richard Newman, August 31, 2014

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