When New Jersey homeowners are faced with significant financial challenges, one of the first things they may worry about is losing their home to foreclosure. Unemployment, unexpected health issues or other unforeseen circumstances can create financial challenges that make it difficult for people to make their mortgage payments. While it is possible to seek a loan modification, some people find themselves in such financial distress that their mortgage lender cannot or will not work with them.
Many different things can happen that can lead to a person's inability to keep up with their mortgage payments. Often, people first try to sell their homes in the hope that a sale will help alleviate the problem. If the house doesn't sell quickly, however, people may be left trying to decide whether they should seek a short sale or instead allow their mortgage company foreclose on the house.
If a homeowner does not pay their mortgage on time, it is possible that the lender could start the foreclosure process. Foreclosure is the legal proceeding by which the lender can take back ownership of a property. However, if the case takes too long to resolve, a statute of limitations may apply. Typically, a case must be open for 5 years or longer before a statute of limitations claim can be made.
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.
While an individual may think of foreclosure as an action pertaining to failure to make payments on a mortgage, action can also be brought in connection with tax liens and with unpaid assessments to homeowner or condominium associations. Actions are filed in Trenton with the Office of the Superior Court Clerk.
Earlier this year, nearly 4.5 million foreclosure victims were given the opportunity to have their foreclosure paperwork reviewed for deficiencies and mistakes. A letter was mailed to the former homeowners explaining their right for review and possible compensation for their losses. Unfortunately, the notification letter was hard to understand and less than 8 percent of those receiving the letters requested reviews.