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Alternatives to Mortgage Foreclosure in New Jersey

stock-photo-19975411-underwater-home-mortgage-house-for-sale.jpgIf you have been served with a foreclosure complaint for failing to make payments on your mortgage, and you would like to keep your home, there are several options available to you: loan modifications, NJ HomeKeeper program, foreclosure mediation, and Chapter 13 bankruptcy. All these programs are available to New Jersey Homeowners, and our attorneys can help you pursue each.


Loan Modification

The Home Affordable Modification Program is a federal program which can lower your monthly mortgage payments and/or wrap arrearages into your loan enabling you to retain ownership of your home. It typically extends the length of your mortgage to forty year mortgage and lowers your interest rate. In order to be considered for a modification, you must submit an application to your lender accompanied by all required back up documentation. This includes a hardship affidavit, tax returns, pay stubs, bank statements, statement of expense, and a recent utility bill.

This can be a difficult process; the lender often requests the same documentation multiple times, or requests minor changes to the documents which have been submitted. Additionally, if time passes after the documents have been submitted without the lender’s review, the lender may require updated current documents be resubmitted. This can be frustrating for the homeowner who is concerned about losing their home. However, persistence can pay off.

NJ Homekeeper

The New Jersey HomeKeeper Program is a New Jersey program which provides financial assistance to homeowners who are unemployed or underemployed and are therefore at risk of losing their homes. To be eligible, you must demonstrate that you were making your mortgage payments until the time you became unemployed (or underemployed) and that the unemployment occurred not more than 36 months before the date of the Homekeeper application. If eligible, NJ Homekeepers can provide up to $48,000 over a period of 24 months which can be used to help make current payments or pay arrearages. The funds provided by NJ Homekeepers are a loan which must be paid back if the homeowner sells, refinances, transfers ownership or no longer occupies the property within 10 years.

New Jersey Judiciary’s Foreclosure Mediation Program

If you have received a notice of foreclosure lawsuit for failing to make mortgage payments, you are entitled to request foreclosure mediation. The notice of the mediation program will be attached to the foreclosure complaint. You must request mediation within 60 days of being served with the complaint. If more than 60 days have passed, it is still possible to enter the mediation program if there were exceptional circumstances and a judge orders entry into the program after a formal request (called a “motion”). Requesting a mediation does not halt the foreclosure action.

The mediation will be scheduled within 90 days of the receipt of the financial worksheet which must be filed with the Office of Foreclosure, and you will receive at least 45 days notice of the mediation date. You are entitled to representation by an attorney.

This is a free service by the Court provided the homeowner is eligible for the program. The mediation is held at the courthouse in the county where the foreclosure action was commenced. The homeowner must reside in the property, the property must be a one to three family residential property, and the homeowner must also be the borrower on the mortgage loan. To enter the mediation program, the homeowner must file the Foreclosure Mediation Financial Worksheet and the Borrower Instructions Mediation Request Statement with the required documentation.

Bankruptcy – Chapter 13

A Chapter 13 bankruptcy plan is another way to retain ownership of your home. If you have significant unpaid arrearages on your mortgage loan, and you are not eligible for a mortgage modification or other negotiated payment plan with your mortgage lender, then a Chapter 13 bankruptcy plan can provide an opportunity to bring your mortgage current over a set period of time. This will only be a viable option if you have sufficient income to make your current monthly mortgage payment, all of your other expenses, and a payment to the Chapter 13 bankruptcy trustee to pay off the arrears plus costs and fees over a set period of time. If you owe additional debts, those will also be included in the payments to the bankruptcy trustee.

Contact Us

If you are in danger of losing your home to foreclosure, contact one of our attorneys. Call us at (973) 890-0004, e-mail us, or visit our website. We can help.