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New Jersey courts allow homeowners to stall foreclosure

A retired New Jersey couple has not paid their mortgage on their 19th-century home in more than three years. They stopped paying for the home that they had lived in for the last 38 years because of the recent “robo-signing” scandal involving their lender. After nearly a year and half, however, the couple received a letter from the lender indicating that they owed three times what their normal monthly mortgage payment had been. The couple claims that the lender tacked on a bunch of inappropriate charges. The couple have owned the home for nearly 40 years but took out a large home loan in 2006 for home improvements and to pay for medical care for a dying daughter.

The couple’s home is one of many New Jersey properties that face foreclosure. New Jersey provides automatic judicial review of foreclosures, meaning that homeowners have the right to take a lender to court to challenge its right to foreclose on their homes and propose loan modification deals. Court foreclosure proceedings buy struggling mortgage borrowers more time to explore debt relief options, such as principal reductions or short sales.

Since the beginning of 2008, the number of unresolved New Jersey home foreclosure proceedings has grown to 60,000. The average length of time that New Jersey residents have remained in their homes without making a mortgage payment is 934 days, compared to the nationwide average of 742 days.

New Jersey residents who are facing foreclosure may wish to contact a bankruptcy attorney. An experienced bankruptcy attorney can help borrowers resolve mortgage payment disputes and potentially work out loan modification deals with lenders, depending on the situation.

Source: Bloomberg News, “New Jersey Housing Suffers as Defaults Exceed Nevada: Mortgages,” John Gittelsohn and Prashant Gopal, Sept. 18, 2012

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