A lot of New Jersey residents have lived in their homes for years — even decades — so when they are threatened by home foreclosure, the idea can be very scary. However, the last thing homeowners should do when faced with the possibility of foreclosure is panic. There a lot of solutions, such as bankruptcy or negotiating with the lender, which could help them resolve their situations.
When it comes to negotiating with lenders, homeowners may be surprised at how many options are available and how willing the lender is to help them. A lot of lenders will happily work with their borrowers who are facing financial problems. Indeed, lenders do not want foreclosure to happen either. All they want is for their borrowers to make their monthly payments on time. As such, homeowners should not be shy when it comes to asking their lender for support in these circumstances.
One option that may be available to a borrower is called forbearance. With forbearance, a lender might temporarily suspend or reduce the borrower’s payment obligations. This option is most likely to be available to those who can show that they have extra money coming to them — perhaps through a tax refund or a corporate bonus. Loan reinstatement is another solution, which allows borrowers to pay off their missed payments over time. It is often used in combination with forbearance.
Another option is called loan modification. With loan modification, the original terms of the loan will be modified in order to make payments more affordable for the borrower. A repayment plan is another option that allows debtors to pay back their delinquent back payments every month along with the current mortgage payments they owe. Refinancing may also be an option if the home has enough equity to pay off the previous mortgage, and any related attorneys’ fees and late fees.
Sometimes, an attorney familiar with foreclosure proceedings can be very helpful in negotiating with the lender in order to stave off foreclosure proceedings. By speaking with a local foreclosure attorney, New Jersey residents can get a sense for how a legal counselor could help them in this regard.
Source: FindLaw, “How to Avoid Foreclosure,” accessed March 25, 2016