New Jersey Foreclosures Continue to Be a Serious Problem
Ever since the economy began to falter in 2007, foreclosures have been a major problem in New Jersey. Even now, New Jersey has the second-highest rate of home mortgage foreclosures in the entire country. Data released in May 2012 showed that 8.4 percent of all New Jersey mortgages were in foreclosure.
This may only be the tip of the iceberg. Concerns over the accuracy of several major banks’ foreclosure filings led to a huge backlog as a judicial review process was created to ensure borrowers were being treated fairly. Hundreds of filings from each bank will be reviewed to determine whether lenders are following appropriate fraud-prevention procedures.
Even outside of these reviews, New Jersey’s foreclosure system is in a state of major change. Under pressure from federal regulators, many banks are starting to do more to help struggling borrowers stay in their homes. Most have started to make their foreclosure processes more accessible, and some are even holding problem-solving meetings with homeowners at risk of foreclosure.
Still, it is important to understand that banks are profit-driven businesses, and they are not required to act in homeowners’ best interest. Banks usually will not go out of their way to keep homeowners apprised of their rights. All borrowers can benefit from talking to a credit counseling agency or a bankruptcy, foreclosure defense, or consumer law attorney, ideally before the foreclosure process begins.
Options for New Jersey Homeowners
In some cases, accepting a foreclosure may be a struggling homeowner’s best option. Other borrowers may benefit from filing for Chapter 13 or Chapter 7 bankruptcy, or from pursuing a mortgage modification or short sale.
It is important for New Jersey homeowners to recognize, though, that they should never just walk away from their home.
Borrowers must comply with the appropriate processes. If they don’t, the bank can come after them for the difference between the outstanding mortgage balance and the amount the bank received from the sale of the home. In addition, any discharged mortgage debt may trigger significant state and federal income tax liability.
If you are worried about keeping up with your mortgage payments, know that you have options. Talk to a New Jersey bankruptcy attorney who can help you protect your future.