Markowitz & O'Donnell, LLP
Local609-482-3138
Toll Free866-437-1189

Call To Schedule A Consultation

When foreclosure looms

Poor finances or just bad luck can put heavy financial stress on mortgage-paying homeowners. If foreclosure looms, several options are available. The foreclosure process in New Jersey, as in other states, is a relatively lengthy and complex procedure that all parties want to avoid. It's important, above all, to keep lines of communication open and to cooperate with the lender on any late-payment issues.

Lenders prefer to work out mortgage issues, rather than foreclose. A mortgage workout can include a loan modification, in which the lender agrees to lower the interest rate or extend the term of the loan. This means a lower, more manageable monthly payment. If a single payment is missed, the lender may allow the homeowner to pay the missed amount in regular installments while keeping the original loan terms.

Loans secured with a down payment of less than 20 percent carry private mortgage insurance. In some cases, a PMI carrier extends a temporary loan of cash to keep the mortgage current. In addition, a VA-backed loan that is running into trouble is a candidate for refunding by the VA itself. This can ease the loan terms and monthly payments. Re-amortization is the process of rolling a missed payment into the balance of the loan, which then carries a higher balance and slightly higher monthly payments.

If there's no possibility of a workout, the borrower has other options to escape foreclosure. A deed in lieu is a process of transferring ownership of the property to the lender, in order to avoid foreclosure. In a short sale, for which the lender must give permission, the homeowner offers the home at a market price less than the mortgage balance. Finally, foreclosure can be temporarily halted by a bankruptcy filing.

Source: Realty Trac, "Stopping a home foreclosure", December 26, 2014

No Comments

Leave a comment
Comment Information

Markowitz & O'Donnell, LLP
3131 Princeton Pike, Building 3D, Suite 200
Lawrenceville, NJ 08648

Toll Free: 866-437-1189
Phone: 609-482-3138
Fax: 609-896-3184
Map & Directions

Send Us An Email.Get Started Today.

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy