Common Questions
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New Jersey Bankruptcy FAQ


1. Does filing bankruptcy stop a foreclosure?
Many people faced with an imminent foreclosure related sheriff’s sale seriously consider filing for bankruptcy. In this type of situation bankruptcy may be an attractive option because a bankruptcy filing delays a foreclose. However, it is important to note that this delay is only temporary. A bankruptcy has the benefit of this delay because immediately following a bankruptcy filing the Bankruptcy Court issues a court order referred to as an automatic stay. This automatic stay simultaneously notifies the creditors of the party that has filed bankruptcy of the existence of the bankruptcy case and orders these creditors to immediately stop pursuing all collections related activities including a foreclosure itself. This could have the benefit of delaying a previously scheduled sheriff’s sale while the bankruptcy case is pending, which is often three to four months. While a bankruptcy temporarily delays sheriff’s sales, the bankruptcy is itself only a very temporary solution to a struggling homeowner’s problems. Not only is this brief delay limited to the period in which the bankruptcy is pending, but the homeowner’s lender may in certain situations be able file a motion with the Bankruptcy Court to lift the stay. If granted and the stay is lifted, the lender can proceed to sell the home. If you are interested in filing a Bankruptcy, or if you have any related questions call us today at (973) 500-8024 or (212) 960-8308, or submit your contact information below and we can contact you directly.
2. Do I qualify for a Chapter 13 bankruptcy?
In order to qualify for a Chapter 13 bankruptcy your debts must fall within federal guidelines. As of April 1, 2011 your secured debt cannot exceed $1,081,400 and your unsecured debt cannot exceed $360,475. Secured debt consists of those debts that are secured by collateral. Automobile loans and home loans are both good examples of secured debt. Alternately, examples of unsecured debt include credit card debt and student loan debt. If you are interested in filing a Chapter 13 Bankruptcy or if you have any related questions call us today at (973) 500-8024 or (212) 960-8308, or submit your contact information below and we can contact you directly.
3. What is a Chapter 13 Bankruptcy?
Chapter 13 refers to the specific chapter of the Bankruptcy Code which provides for the restructuring and repayment of debts. This form of bankruptcy, which is available to qualifying individuals, is often referred to as a wage earner’s bankruptcy because it involves the use of a repayment plan to satisfy the debtor’s obligations, rather than involving the liquidation process seen in the context of a Chapter 7 bankruptcy filing. In a Chapter 13 bankruptcy such repayment of debts takes place over the course of a three to five year term upon the expiration of which the remaining debts of the debtor are discharged. If you are interested in filing a Chapter 13 Bankruptcy, or if you have any related questions call us today at (973) 500-8024 or (212) 960-8308, or submit your contact information below and we can contact you directly.
4. What is the means test?
The means test is a formula applied to determine whether a liquidation pursuant to a Chapter 7 bankruptcy is appropriate, or if the debtor’s debts should be subject to a repayment plan pursuant to Chapter 13 of the Bankruptcy Code. Specifically, in the event that the debtor’s current monthly income exceeds the relevant state’s median income a means test is applied under the Bankruptcy Code to determine whether a Chapter 7 filing is presumptively abusive. If the filing is determined to be presumptively abusive, and such finding is not rebutted, the bankruptcy case will be converted to a Chapter 13 bankruptcy or it will be dismissed.
5. Who is eligible for relief under Chapter 7?
Chapter 7 relief extends to certain individuals, corporations, or other business entities. Relief is available, subject to the satisfaction of the mean test, regardless of the size of the debtor’s debts and regardless of whether the debtor is solvent. However, in certain situations debtors that would otherwise qualify cannot file for bankruptcy under Chapter 7 if (1) the debtor voluntarily dismissed the previous bankruptcy case after its creditors sought the court’s relief to recover property from the debtor; (2) during previous 180 days a bankruptcy petition of such a debtor was dismissed as a result of the debtor’s failure to comply with the court’s order of failure to appear before the court; or (3) if the debtor does not receive credit counseling from an approved agency during the 180 days preceding the Chapter 7 bankruptcy filing. If you are interested in filing a Chapter 7 Bankruptcy, or if you have any related questions call us today at (973) 500-8024 or (212) 960-8308, or submit your contact information below and we can contact you directly.
6. What are the benefits associated with a Chapter 7 filing?
A Chapter 7 bankruptcy provides debtors with a fresh start by allowing debtors to discharge debts without incurring any liabilities in connection with such discharges. Debtor must remember that a right to discharge is not absolute. Further, certain types of debt are not dischargeable. Finally, bankruptcy does not extinguish liens on property. If you are interested in filing a Chapter 7 Bankruptcy or if you have any related questions call us today at (212) 960-8308 or (973) 500-8024, or submit your contact information by clicking here and we can contact you directly.
4. What is the means test?
The means test is a formula applied to determine whether a liquidation pursuant to a Chapter 7 bankruptcy is appropriate, or if the debtor’s debts should be subject to a repayment plan pursuant to Chapter 13 of the Bankruptcy Code. Specifically, in the event that the debtor’s current monthly income exceeds the relevant state’s median income a means test is applied under the Bankruptcy Code to determine whether a Chapter 7 filing is presumptively abusive. If the filing is determined to be presumptively abusive, and such finding is not rebutted, the bankruptcy case will be converted to a Chapter 13 bankruptcy or it will be dismissed.

New Jersey Foreclosure Class Action FAQ


7. Will foreclosure class actions stop my foreclosure proceeding?
No. No matter how much you think the bank has harmed you, the mere filing of a foreclosure class action does not directly stop the foreclosure proceedings against you. These class action cases can potentially drag on for a significant period of time. In the meantime your foreclosure case does not stop and you should meet with an attorney at Friscia & Associates or elsewhere to discuss your available option in your fight to keep your home and defend against foreclosure. If you are interested in learning more about class action lawsuits, or if you have any related questions call us today at (973) 500-8024 or (212) 960-8308, or submit your contact information below and we can contact you directly.
8. What is class certification?
After the class action Complaint is filed, the plaintiff must file a motion to have the class certified. In other words, at the point of class certification the Plaintiff is effectively asking the Judge to recognize the proposed class of individuals, which could include a handful of people or several hundred thousand people, for the purposes of the litigation. Upon the motion to certify the class, the defendants may object to whether the issues presented in the case in question are appropriate for a class action. The defendants may also object to the proposed class certification on the grounds that the named plaintiffs are sufficiently representative of the class. The Judge will also assess the ability of the firm to prosecute the claim for the plaintiffs, and their resources for dealing with class actions. If you are interested in learning more about class action lawsuits, or if you have any related questions call us today at (973) 500-8024 or (212) 960-8308, or submit your contact information below and we can contact you directly.
9. What is a Foreclosure Class Action?
In the course of Friscia & Associates representation of distressed homeowners, we have seen a pervasive pattern of misconduct on the part of the bank in conducting the modification and foreclosure process. Accordingly, using defendants in pending New Jersey foreclosure actions initiated by the banks, we have filed affirmative foreclosure class action claims against these banks for such misconduct. These cases include counts of common-law fraud, breach of the covenant of good faith and fair dealing and violations of the New Jersey Fair Foreclosure Act and Consumer Fraud Act. Currently, these cases are pending in Federal Court. Friscia & Associates will provide our clients and the greater community with updates as they become available. Friscia & Associates has filed or is otherwise involved in a number of high profile federal class action lawsuits in New Jersey and in other states. One such case, Beals v. Bank of America, N.A., 10-cv-05427, consists of all named defendants in pending New Jersey foreclosure actions initiated by Bank of America or its affiliates. If you are interested in learning more about class action lawsuits, or if you have any related questions call us today at (973) 500-8024 or (212) 960-8308, or submit your contact information below and we can contact you directly.
10. What is a Class Action?
A Class Action is a representative action in which one or more persons named in the lawsuit pursue a case on behalf of a larger collective group of persons that are not named in the lawsuit. This larger group of unnamed persons, in addition to the parties named in the lawsuit, comprises the class that the Class Action seeks to benefit. Class Actions are useful mechanism in situations in which similarly situated person face common harms or injuries, because the collective nature of Class Actions allow parties to efficiently pursue claims that would be inefficient or other difficult to pursue individually. Class Actions filed in Federal Court are governed by Rule 23, Federal Rules of Civil Procedure. This rule also stipulates the procedures for certifying a class and the requisite elements for certification. Friscia & Associates has filed or is otherwise involved in a number of high profile federal class action lawsuits in New Jersey and in other states. One such case, Beals v. Bank of America, N.A., 10-cv-05427, consists of all named defendants in pending New Jersey foreclosure actions initiated by Bank of America or its affiliates. If you are interested in learning more about class action lawsuits, or if you have any related questions call us today at (973) 500-8024 or (212) 960-8308, or submit your contact information below and we can contact you directly.

New Jersey Foreclosure FAQ


11. Should I hire a foreclosure defense attorney?
There are countless reasons why families end up with financial problems. Unfortunately, sometimes these problems led to people missing mortgage payments. While banks typically allow borrowers to miss a few payments without serious consequences, homeowners should expect a foreclosure action to be filed if such a default is not quickly fixed. With the help of a skilled and experienced foreclosure attorney, borrowers in default can protect themselves by delaying the foreclosure process and working with the bank’s counsel for the purposes of attempting to resolve the foreclosure dispute by entering into a modified mortgage payment with their lenders. Fight Fire With Fire If you are a homeowner in foreclosure or at imminent risk of entering into foreclosure you should consider the fact that your mortgage company has or will hire legal representation for the purposes of obtaining a foreclosure judgment against you. Typically, the most effective way to protect yourself from the mortgage company and its legal counsel is for you to obtain your own legal representation. A legal team such as that of Friscia & Associates, LLC, that concentrate on foreclosure defense can provide useful advice on how to proceed with the efforts of keeping your home. When dealing with an issue both as sensitive and important as that of your home, it is worth seriously considering legal assistance. Such representation can free you of the complications and burdens associated with defending yourself from the legal process. Moreover, experienced legal representation can put you in the best position to settle a foreclosure in connection with the modification of your home loan. This is a lot for someone to have to take on their own during their busy lives and schedules. Hiring an attorney is the obvious choice to handle these matters on your behalf. If you are interested in learning more about foreclosure defense, or if you have any related questions call us today at (973) 500-8024 or (212) 960-8308, or submit your contact information below and we can contact you directly.
12. How can I save my house if I am in foreclosure in New Jersey?
While a foreclosure is never a pleasant experience, all hope is not lost if you have been sued by your lender and are currently in foreclosure. Indeed, there are a few ways in which you can save your home from foreclosure. For example, if your property is a primary residence you may qualify to participate in New Jersey’s foreclosure mediation program. This program offers a structure process in connection with which countless New Jersey homeowners have successfully negotiated deals with their lenders, typically involving more favorable mortgage loan terms. In other case, New Jersey homeowners have succeeded in getting their foreclosures dismissed because of the effectiveness of their affirmative defenses and/or due to a procedural or technical violation on the party of the Plaintiff. In yet other situations New Jersey homeowners have been able to save their homes, even though they had been sued for foreclosure, because they successfully reinstated their mortgage loan before the entry of Final Judgment which is permissible under New Jersey’s Fair Foreclosure Act for certain qualifying properties. If you are interested in learning more about New Jersey’s foreclosure process, or if you have any related questions call us today at (973) 500-8024 or (212) 960-8308, or submit your contact information below and we can contact you directly.
13. How Much Time Do I Have to Respond to a Foreclosure Lawsuit in New Jersey?
In New Jersey Defendants to a foreclosure complaint or lawsuit have a total of thirty-five (35) days from the date in which they are served to respond to the foreclosure action that has been brought against them. Responding to a foreclosure complaint or lawsuit can be confusing given the related technical requirements. The steps that must be taken to successfully respond to a foreclosure in New Jersey include but are not limited to filing an Answer, which is a legal response, to the foreclosure lawsuit within 35 days of the date at which the Defendant has been served. Such a response must be filed with the court. Moreover, the Defendant in a New Jersey foreclosure action must serve the Plaintiff, the party who brought the case against you, with such a response within the designated period of time. However, if the case Plaintiff is represented by counsel, a lawyer or law firm, the Answer to the foreclosure lawsuit must be served on the relevant counsel. If you are interested in learning more about New Jersey’s foreclosure process, or if you have any related questions call us today at (973) 500-8024 or (212) 960-8308, or submit your contact information below and we can contact you directly.
14. What do I do if I was Served with a Foreclosure Lawsuit in New Jersey?
If you were served with a foreclosure action in the state of New Jersey you should strongly consider consulting with a New Jersey attorney. Individuals can respond to foreclosure lawsuits on their own behalf. However, it is prudent to evaluate your case with a professional who may be aware of affirmative defenses and/or counterclaims that could benefit your case which a layperson might not be aware of. If you are interested in learning more about the foreclosure process, or if you have any related questions call us today at (973) 500-8024 or (212) 960-8308, or submit your contact information below and we can contact you directly.
15. What is a Notice of Intention to Foreclose?
New Jersey law requires that a servicer send a borrower a Notice of Intention to Foreclose letter at least thirty days before filing a complaint against a borrower in connection with a foreclosure lawsuit involving a primary residence. Although a Notice of Intention to Foreclose correspondence might look like an unimportant and routine letter from your servicer, take this correspondence seriously and don’t be deceived. A Notice of Intention to Foreclose is an important document of legal significance that essentially provides you with notice that the foreclosure process has begun or is about to begin. As required by the New Jersey Fair Foreclosure Act, N.J.S.A. 2A:50-56, your servicer (the mortgage) or your servicer’s attorney is required to send a Notice of Intent or Notice of Intention to Foreclose via registered or certified mail, return receipt requested. The notice must give the borrower at least thirty (30) days to cure the default with the lender. Whether you get a Notice of Intention to Foreclose from an attorney or directly from your servicer, it should be treated as the serious legal document that it is. A foreclosure defense attorney can help defend against the foreclosure action that your servicer intends to initiate against you or has already commenced. If you have received a Notice of Intention or if you have any related questions, call us today at (973) 500-8024 or (212) 960-8308, or submit your contact information below and we can contact you directly.
16. What’s the Emergency Homeowners Loan Program?
The Emergency Homeowners Loan Program (EHLP) is a federal program designed to help struggling homeowners make payments to their mortgage company and stay in their homes. Aprroved participant in EHLP are homeowners meeting the program’s standards who are given the benefit of zero interest loans. Such participating homeowners are individuals who have experienced a loss of income, of at least 15%, as a result of either the current economic downturn or as a result of a medical condition. If the homeowner is deemed to qualify for EHLP and is an approved participant such a homeowner will receive one-time assistance to help with past due mortgage payments. EHLP is designed to help such homewoners by bringing them current on their first mortgage. EHLP also seeks to benefit such homeowners by assisting them in the payment of their monthly payments. EHLP is of a maximum duration of 24 months and a maximum loan amount of $50,000. This $50,000 is only applicable to their mortgage. There are many guidelines for eligibility for this program. The applicant must be receiving a combined household income of less then $75,000.00. The loss of income must be a result of involuntary unemployment, underemployment or a serious medical issue. The applicant must be at least three months delinquent on mortgage payments. Proof from the mortgage company will need to be provided such as a Notice of Intent to Foreclose. The applicant must show likelihood that they will be able to take over the payments within 2 years. The applicants property must be a single family primary residence. To find out if you are potentially eligible for an EHLP loan, fill out the short quiz on the HUD website. You can go to relevant HUD form by clicking here. For more details on what expenses are eligible for EHLP loan assistance see the Housing and Urban Development website, which can be found at http://portal.hud.gov/portal/page/portal/HUD. In order to qualify for a Chapter 13 bankruptcy your debts must fall within federal guidelines. As of April 1, 2011 your secured debt cannot exceed $1,081,400 and your unsecured debt cannot exceed $360,475. Secured debt consists of those debts that are secured by collateral. Automobile loans and home loans are both good examples of secured debt. Alternately, examples of unsecured debt include credit card debt and student loan debt. Please note that the application deadline for the EHLP has expired. Please refer to HUD’s website for information regarding other available programs. If you are interested in the Emergency Homeowners Loan Program or if you have any related questions call us today at (973) 500-8024 or (212) 960-8308, or submit your contact information below and we can contact you directly.
17. What is a mortgage modification?
A Loan Modification is a temporary or permanent change in one or more of the terms of your loan agreement. Most typically, a modification restructures your loan to provide borrowers with more manageable terms. It is important to note that borrowers do not have an absolute right to a modification, and therefore the bank has no contractual or legal obligation to provide a borrower with a modification. A modification of a mortgage typically includes one or more of the following components: A change in the loan’s term, often resulting in a longer term than was the case prior to the note’s modification; The waiver or capitalizing of the fees, charges and penalties associated with the loan’s delinquency or otherwise; The reduction or forgiveness of principal associated with the note; A change in the interest rate associated with the note, such as the lowering of the applicable interest rate or the conversion of a interest rate from an adjustable to a fixed interest rate; and/or A trial period, typical three months in length, to demonstrate the borrower’s ability to make payment on a permanent modification. There are many types of modifications, the availability of which varies significantly depending upon the entities or persons that have invested in the note, the extent to which the borrower is delinquent, and the borrower’s overall financial situation. The Federal Home Affordable Modification Program (“HAMP”), the most commonly referred to modification program was created in connection with the United States federal government’s Making Home Affordable Program. HAMP has become the gold standard modification program and has served as a template for many modification programs that are not formerly associated with HAMP.However, not all investors participate in HAMP, and even within HAMP there is variation regarding the criteria and retention options available. For example, FHA loans have a separate and more stringent review process for their own version of HAMP known as FHA-HAMP. There is also a HAMP 2.0 program which relaxes some of the more stringent requirements of HAMP including the requirement the applicant reside in the property. Aside from HAMP, many loan servicers have created proprietary or in-house modification programs that often incorporate elements of the HAMP program itself. The process of applying for a mortgage modification can be frustrating and confusing. If you are facing foreclosure and are interested in resolving your financial and legal problems by obtaining a modification it may be in your interest to obtain professional counsel. If you have questions related to mortgage modifications call us today at (973) 500-8024 or (212) 960-8308, or submit your contact information below and we can contact you directly.
18. What’s a short sale? What are the benefits and drawbacks?
A short sale is a sale of your property where the sale proceeds fall short of the balance owed on the property’s loan. In some ways this is advantageous to both parties as it prevents the Sheriff’s Sale from happening. However, it does not necessarily protect you from the deficiency and there also could be negative tax implications and other fees. Most significantly borrowers are no longer afforded the tax protections of the Mortgage Debt Relief Act of 2007, which has not been extended to 2014. Before deciding to pursue this route please contact our office to discuss the risks and/or advantages of this course of action. If you are interested in pursuing a short sale transaction or if you have any related questions call us today at (973) 500-8024 or (212) 960-8308, or submit your contact information below and we can contact you directly.
19. What is the New Jersey Judiciary’s Foreclosure Mediation Program?
The New Jersey Foreclosure Mediation is a Court ordered program in the state of New Jersey. In order to be eligible for the free mediation program, homeowners cannot currently be in bankruptcy, the property in foreclosure must be the homeowner’s primary residence, and the property in question must be a one to three-family residence. The program benefits distressed homeowners by providing them the opportunity to have a face-to-face meeting with the lender’s attorney and a neutral third party mediator to discuss their options. Communication is always an issue when dealing with banks and this is an important opportunity for a borrower to speak directly with their servicer and their lawyer about their prospects of reaching resolution. Our firm, Friscia & Associates, will submit your entire mediation packet to the court, and will represent you at the mediation. Our NJ foreclosure defense attorneys can guide those facing foreclosure through the complexities of the foreclosure process. If you have questions regarding the New Jersey Foreclosure Mediation Program or if you have any other related questions call us today at (973) 500-8024 or (212) 960-8308, or submit your contact information below and we can contact you directly.
20. How does the foreclosure process work in New Jersey?
While a foreclosure action is extremely important and deserves your immediate attention, it is critical to understand that the foreclosure process in New Jersey is long and complicated. Indeed the foreclosure process includes a number of steps between the time you receive a Notice of Intent to Foreclose and the day that your house is sold in a Sheriff’s Sale, which is possible to prevent in certain circumstances if the appropriate steps are taken. The first step in the foreclosure process involves your receipt of a Notice of Intent to Foreclose. In New Jersey thirty days or more following your receipt of the Notice of Intent to Foreclosure your servicer can file and subsequently serve you with a Summons and a foreclosure Complaint. You have thirty-five days, following the date you were served, to respond to your Complaint. Your Answer to the foreclosure Complaint should be filed with the Office of Foreclosure, which is located in Trenton, New Jersey. Subsequently, the Office of Foreclosure makes a determination as to whether the Answer is deemed a contesting answer or non-contesting answer. If it is contesting, the case will be assigned to a Judge in the county in which the property is located. Once it is assigned, the Judge will schedule a case management conference to assign discovery and trial dates. Typically, the bank will likely file for Summary Judgment in an attempt to have the case sent back to Trenton and treated as uncontested. If your case survives a Motion for Summary Judgment, the action will then proceed to a trial which will ultimately determine the outcome of the matter. NJ foreclosure defense attorneys can guide those facing foreclosure through the complexities of the foreclosure process. It is important to note that the foreclosure litigation process is related to but distinct from the modification/home retention process. The Office of Foreclosure and the Chancery Courts are focused on the procedure and rules related to lender’s pursuit of a foreclosure, while the modification application process involves the submission of documents to the lender or the lender’s firm for the review of home retention options. Our firm assists borrowers in navigating both of these realms of the foreclosure. If you are in foreclosure or at risk of ending up in foreclosure or if you have any related questions call us today at (973) 500-8024 or (212) 960-8308, or submit your contact information below and we can contact you directly.

New Jersey Real Estate FAQ


21. What is a Mortgage and Note?
The Mortgage is a document that places a lien on the property as security for the loan. The Note is a document representing your promise to pay the Mortgage. Both documents will state the premises, the amount of the loan, the interest rate and the monthly payment amount which you can always refer to for future reference. If you are interested in purchasing or selling a home, or if you have any related questions call us today at (973) 500-8024 or (212) 960-8308, or submit your contact information below and we can contact you directly.
22. What does the borrower pay at the time of closing?
The borrower can expect to pay closing costs, payment for the home and any escrows. Closing costs are paid at closing, a portion is paid by the borrower and a portion is paid by the seller. These fees include the title fees, survey fees and the attorney’s fees. The buyer’s attorney will bring the down payment to the closing and the closing agent for the bank will bring the lenders check for the balance of the purchase price. Escrows are normally held by the bank to cover the year for real estate taxes and insurance. If you are interested in purchasing or selling a home, or if you have any related questions call us today at (973) 500-8024 or (212) 960-8308, or submit your contact information below and we can contact you directly.
23. What happens during a real estate closing?
The purchaser or his lender brings the final payment for the purchase price on the property. The borrower is made to review and sign numerous documents required by the lender in order to secure the loan for the purchase of the property. The deed is then transferred over to the purchaser who is then handed keys to the newly purchased home. If you are interested in purchasing or selling a home, or if you have any related questions call us today at (973) 500-8024 or (212) 960-8308, or submit your contact information below and we can contact you directly.
24. What happens during a real estate closing?
An escrow is an account usually held by an attorney or third party in a real estate transaction. The escrow is normally used to hold the down payment until the day of closing. This is a good way to make both the seller and buyer feel more secure in the process. If you are interested in purchasing or selling a home, or if you have any related questions call us today at (973) 500-8024 or (212) 960-8308, or submit your contact information below and we can contact you directly.
25. What is a real estate closing?
A real estate closing is the process of finalizing the transfer of ownership of real estate property from one party to another in consideration for the payment of a mutually agreed upon sum of money. If you are interested in purchasing or selling a home, or if you have any related questions call us today at (973) 500-8024 or (212) 960-8308, or submit your contact information below and we can contact you directly.
26. What are the steps to owning my own home?
Now that you’ve found the home of your dreams, the real estate purchase process begins. At this point, you should consider presenting an offer to the seller. Often this offer is presented to the seller’s real estate agent or broker. In New Jersey if the seller accepts your offer a three day attorney review period begins. At this point, it is advisable that you obtain an attorney who will review and potentially revise the contract, and issue a check to the seller’s attorney for the purposes of making an initial deposit. Once the contract is reviewed and finalized you will be working on obtaining a loan to purchase the property. While that is in the works, the purchasers attorney will obtain and review a copy of the title report from a title company to make sure that there are no unknown liens on the property. Once you receive a commitment and a clear to close from your lender and the title company the closing can be scheduled. If you are interested in purchasing or selling a home, or if you have any related questions call us today at (973) 500-8024 or (212) 960-8308, or submit your contact information below and we can contact you directly.

New Jersey Sheriff's Sale FAQ


27. How does the sheriff sale process work in New Jersey?
New Jersey’s sheriff sales are administered by the sheriff’s department associated with the county in which the relevant property is located. Thus, in New Jersey the sheriff sale process is conducted in accordance with the local rules of the county in which such a sale takes place. Notwithstanding the local distinctions between the sheriff sale process in New Jersey from county to county, in the context of all New Jersey sheriff sales the relevant properties are sold subject to the first mortgage on the property, if applicable, which typically takes the form of the first lien on the property. Furthermore, such a sale in New Jersey is subject to any local, state or federal liens. Given the possible existence of these liens or other liens, a title search is typically run prior to bidding to determine the manner and extent to which the property is encumbered by liens. It is imperative that bidders obtain the information provided in the title report, specifically as it related to outstanding liens, as the successful bidder at the sheriff’s sale auction assumes as must ultimately pay for such liens. The auction associated with a sheriff’s sale is conducted by way of a voice auction. Typically the creditor/plaintiff (i.e. the bank’s attorney) will being the bidding process with a hundred dollar ($100.00) bid, with bidding continuing until a winner in the form of the highest bidder for the property is determined. If the successful bidder is a party other than the plaintiff/creditor’s counsel, the plaintiff’s counsel will keep bidding to ensure that another party does not obtain the property in connection with a bid that represents an amount less than the amount of the judgment owed to it. Put differently, the plaintiff’s attorney will continue to escalate its bid until the upset amount, which typically refers to the amount owed on the first mortgage plus certain fees and costs, is reached. This strategy is employed for the purpose of protecting the plaintiff from a situation in which a savvy third-party bidder is able to assume that property for an amount less than the judgment amount resulting in the creditor in question not being made whole. As a corollary to this, once the upset price is reached, the plaintiff/creditor’s attorney often does not continue to bid as the creditor’s interest are protected by virtue of a third-party bid which exceeds the upset price. Once the highest bidder has been determined the sale will be concluded. At this time, the successful bidder must put down a deposit in the amount of twenty percent (20%) of the successful bid. Further, in New Jersey, the conclusion of this sale triggers a ten (10) day redemption period for the benefit of the defendant property owner. During this period, the former owner can attempt to object to the sale or the former owner can redeem the property by paying off the amount associated with the judgment in question, in addition to other liens, fees and costs. After the redemption period has expired, assuming the former property owner neither redeems nor successfully disputes the sale, a Sheriff’s Sale Deed is prepared. In New Jersey, this occurs approximately thirty (30) days after the auction. On or before the expiration of thirty (30) days from the date of the Sale Deed the balance owed in connection with the successful bid must be paid. In the context of New Jersey sheriff sale auctions, after the balance is paid the purchaser becomes the rightful owner of the property. As such, the purchaser is required to pay all related fines and record the relevant deed. Moreover, the purchaser is required to furnish the former owner with notice that title has transferred. If you are interested in learning more about New Jersey sheriff’s sales, or if you have any related questions call us today at (973) 500-8024 or (212) 960-8308, or submit your contact information below and we can contact you directly.
28. How can a sheriff’s sale be delayed or stopped in New Jersey?
In New Jersey there are four stays, also known as adjournments, pursuant to which a Sheriff’s Sale, following the successful prosecution of a foreclosure action, can be delayed. The borrower is entitled to two of the four stays, and the lender is entitled to the remaining two stays. Each such stay entitles the exercising party with the right to delay a Sheriff’s Sale for a two week period. Additional stays may be available in certain specific circumstances, but such additional stays require a Court Order. Often a foreclosure defense attorney can assist homeowners seeking to stay or contest a scheduled Sheriff’s Sale. If you have any questions regarding foreclosure or Sheriff’s Sale, or if you have any other related questions call us today at (973) 500-8024 or (212) 960-8308, or submit your contact information below and we can contact you directly.
29. What is a sheriff’s sale? How does it work in NJ?
In New Jersey, a Sheriff’s Sale effectively marks the end of the foreclosure process, as a Sheriff’s Sale, if successful, results in the sale of a borrower’s former property to an uninterested third party. This is achieved by way of an auction sale of real property conducted by the county sheriff following the successful prosecution of a foreclosure action by a lender. Specifically, the sheriff holds such property pursuant to a court order to seize and sell the property to satisfy a foreclosure judgment, after notice to the public. Under New Jersey law a Sheriff’s Sale takes place only after the entry of a Final Judgment in a foreclosure case. After the entry of such Final Judgment, a Writ of Execution is issued and sent to the sheriff who in turn is charged with scheduling a sale. The sheriff is required to schedule a sale within 120 days the sheriff’s receipt of the Writ of Execution. If you are interested in learning more about New Jersey sheriff’s sales, or if you have any related questions call us today at (973) 500-8024 or (212) 960-8308, or submit your contact information below and we can contact you directly.

New Jersey Mortgage Modification FAQ


30. Are there different mortgage modifications options available through the HAMP program?
Yes, the HAMP program includes a few possible workout options that may be available to you. Possible mortgage loan modifications available under HAMP for borrowers in foreclosure or at imminent risk of foreclosure include, but are not limited to the following: FHA-HAMP The Federal Housing Administration (FHA) is one of the biggest networks in the country that supports the HAMP loan modification programs. It has its own flagship HAMP program available for qualifying homeowners in or at imminent risk of foreclosure. The FHA-HAMP program gives qualifying borrowers with FHA insured loans to avoid foreclosure by entering into a modified mortgage loan with lower monthly payments. The FHA-HAMP program is notable in that allows for the inclusion of what is referred to as a partial claim. This partial claim is an interest free loan that can effectively make otherwise non-qualifying mortgage notes qualify for a modification. This partial claim note can be used to cover as much as thirty percent (30%) of a borrower’s delinquency, and it need not be repaid until the first mortgage note is paid off or if the borrower ceases to be the owner of the property. VA-HAMP The Department of Veterans’ Affairs (VA) offers its own modification program through HAMP. This program can provide veterans a great way to avoid losing their homes to foreclosure. VA-HAMP is a program that all VA home loans in foreclosure or at imminent risk of ending up in foreclosure will be considered for provided that the appropriate documentation is submitted in accordance with the plan. However, note that the VA requires that VA notes first be reviewed and denied for other traditional loss mitigation options before the borrower is considered for VA-HAMP. FHA Short Refinance Although it is not technically a HAMP affiliated program, the FHA Short Refinance is a great program for a distressed homeowner who is in foreclosure or at imminent risk of foreclosure. If your home is under water, meaning it is worth less then what is owed on your mortgage, you could potentially qualify for this option which may eliminate the difference between the worth and what is owed and lower your mortgage to a more controllable amount. This is very similar to the bailouts that allowed large companies to continue to conduct business without having to declare bankruptcy. In short, if it allows you to keep you in your home, it only positively affects you as well. Home Affordable Unemployment Program (UP) There are special programs set up for people who are unemployed, such as, the Home Affordable Unemployment Program or UP. You will still be able to obtain help to keep your home even if you do not have a steady income. In order to qualify for this program, you simply must qualify for unemployment benefits in your state. This is one way to obtain immediate help when you are unable to obtain it elsewhere. An attorney can better assist you and inform you more about this, including any special circumstances or possible restrictions that may exist. If you are interested in learning more about mortgage modifications, or if you have any related questions call us today at (973) 500-8024 or (212) 960-8308, or submit your contact information below and we can contact you directly.
31. What are possible mortgage modification and/or workout options for distressed homeowners?
In normal circumstances homeowners in New Jersey and elsewhere do not have a legal right to obtain a mortgage modification, forbearance, short sale or other workout options, many if not most lenders and servicers have loss mitigation departments which evaluate homeowners for possible workout options to prevent the loss of homes in connection with foreclosures. Commonly available workout options include but are not limited to the following: Refinance: Refinancing could possibly be an option. HOPE for Homeowners is an FHA refinance loan options for qualifying homeowners. This was created to help protect qualified homeowners from foreclosure by preventing loan defaults. Refinancing is typically impractical for most homeowners without using a government program as the value of most homes are less than the amount that is owed on the loan. Reverse Mortgage: A reverse mortgage is commonly used by senior citizens. It helps them to access the equity in their home for retirement. To use a reverse mortgage to prevent foreclosure, you typically must be 62 years of age or older and have equity in the property. Mortgage Loan Assumption: A “due on transfer” provision is typically included in mortgage loans unless waived by the lender. If it is waived, it will allow an individual or entity to take over the obligation to make payments on the loan as long as they are qualified. Typically this is used to sell of the property to a third party. If the individual or entity assuming the payment obligation on the loan defaults, the lender can possibly release you from personal liability on the note. Loan Guarantee Partial Claim: If you have mortgage insurance, your lender may provide a interest-free loan in order to help you bring your account current. Reinstatement: You and your lender come to an agreement where you pay all amounts owed on the loan to bring your mortgage current including any and all late fees, attorney fees, taxes, insurance, etc. Once the amount is satisfied, then you will be back on your regular monthly payment schedule and the attorney for the lender will dismiss the foreclosure action against you. Repayment Plan: You and your lender come to an agreement where resume making your regular monthly mortgage payments, in addition to an agreed upon amount each month until you have paid the owed arrears to reinstate the loan. Loan Modification: This is where the lender agrees to make changes to the terms of your mortgage allowing you to remain in your home. The terms that may be subject to charge are extending the amount of time you have to pay off the loan in full, reducing your interest rate, converting an adjustable rate loan to a fixed rate loan, or adding the missed payments and late fees, etc. to the back end of your loan. Forbearance Agreement: A forbearance agreement allows borrowers to repay the delinquency of a loan over a period of time. Your regular monthly payment would be made an addition to an agreed upon monthly payment to apply to the delinquent amount. Once the amount of the delinquency is paid in full, your normal monthly payments will resume. Sometimes a forbearance plan will include additional incentives such as a suspension or reduction of payments for a period of time allow you to make up the default. They may also provide you time to pay you regular monthly mortgage payment only prior to the beginning of the repayment of the arrears. A repayment may be allowed for a period of six months and allow reasonable foreclosure and late fees to be included as part of the repayment schedule. However, they arrears may only be collected once the loan has been reinstated. Extension Agreement: This is where you pay a lump sum of the amount of your delinquency up front, and the remaining amount is added to the back end of your loan. Principal Forbearance: A Forbearance is the repayment of a portion of the principal interest-free. The original borrowed amount on your mortgage loan less any payments that you make until the loan is paid in full or the property is sold is the principal amount due and payable at maturity of the loan. The payments on the loan partially, amortize the loan. Principal Reduction: This is where the lender agrees to reduce the principal amount owed on the loan. This is possible if you have a negative amortization loan. A negative amortization loan is where you are paying less than is required to pay off the loan in full during the loan’s term. The lender would reduce the principal to the original loan amount. In exchange for the principal reduction, a shared appreciation mortgage (SAM) may be required. This is a fixed rate, fixed term loan. You would agree to release a portion of the home’s future value in exchange for a lower interest rate. Short Sale: This is the sale of the property for less than what you owe on the mortgage. Lenders may consent to you selling the property at a lesser amount and lose out on collecting the fees associated with foreclosure, because it preferable to foreclosure action as lenders face the risk of substantial loss from litigation and other related costs associated with a foreclosure action and including real estate taxes and insurance. With a short sale, the lender may agree to relieve you of liability for any deficiency. Deed in Lieu of Foreclosure: This is where you voluntarily agree to conveying your property to the lender in by executing a Deed. In exchange for you executing a deed the lender will cancel the debt you owe on the loan. The lender will typically agree to forgive the deficiency that may remain on after the house is sold. Once the deed is executed and returned, the lender will no longer move forward with foreclosure proceedings or dismiss any foreclosure action against you. Voluntary Surrender/Cash for Keys: This is where your lender may offer you money to vacate the premises prior to a sheriff sale. The house must be in good condition without any damages caused by you. Please note that although each of the above referenced loss mitigations possibilities exists, this should not be taken to imply that your lender or servicer offers any or all of these workout solutions. Further note that in the event that your lender or servicer offers one or more of these solutions to some borrowers does not mean such solutions are available to all customers. Related to this, through the loss mitigation application process the finances of distressed borrowers are evaluated to determine whether the relevant borrowers have the financial wherewithal to make a payment that is satisfactory from the lender or servicer’s perspective. Moreover, when being reviewed in connection with the loss mitigation process, banks consider the reason a borrower default, the appraised value of the property and the amount of the arrearages, in addition to a borrower’s’ ability to pay. If you are interested in learning more about mortgage modifications, forbearances, cash for keys or other mortgage workout option, or if you have any related questions call us today at (973) 500-8024 or (212) 960-8308, or submit your contact information below and we can contact you directly.
32. What is the Obama HAMP program for borrowers?
The Home Affordable Modification Program (HAMP) is a federal government program designed to assist homeowners who are suffering an economic hardship. HAMP attempts to restructure your monthly mortgage payment so that it is affordable. The program has a goal of providing participant with a monthly mortgage payment that is not more than thirty-one percent (31%) of the troubled borrower’s gross (pre-tax) monthly income to make your payments more affordable. You may be eligible to apply if you meet all of the following: • The house is your primary residence. • You obtained your mortgage on or before January 1, 2009. • Your mortgage payment is more than thirty-one percent (31%) of your monthly gross (pre-tax) income. • You owe up to $729,750 on your home. • You have a financial hardship and are either delinquent or in danger of falling behind. • You have sufficient, documented income to support the modified payment. • You must not have been convicted within the last ten years of felony larceny, theft, fraud or forgery, money laundering or tax evasion, in connection with a mortgage or real estate transaction. It is important to note that HAMP is a complicated program with many nuances. In fact, there are even different variations of HAMP, including a HAMP 1.0 and a HAMP 2.0 program. HAMP 2.0 is a newer variation of the HAMP program that was created to benefit some previously non-qualifying borrowers. As opposed to the HAMP 1.0 program, HAMP 2.0 relaxes some of the more stringent requirements of HAMP, including the requirement that the applicant reside in the property. Because of these complexities, people often obtain professional guidance to navigate them through the often daunting modification application process. If you are interested in learning more about mortgage modification, including those available under the HAMP program, or if you have any related questions call us today at (973) 500-8024 or (212) 960-8308, or submit your contact information below and we can contact you directly.
33. What is a mortgage modification?
TA Loan Modification is a temporary or permanent change in one or more of the terms of your loan agreement. Most typically, a modification restructures your loan to provide borrowers with more manageable terms. It is important to note that borrowers do not have an absolute right to a modification, and therefore the bank has no contractual or legal obligation to provide a borrower with a modification. A modification of a mortgage typically includes one or more of the following components: A change in the loan’s term, often resulting in a longer term than was the case prior to the note’s modification; The waiver or capitalizing of the fees, charges and penalties associated with the loan’s delinquency or otherwise; The reduction or forgiveness of principal associated with the note; A change in the interest rate associated with the note, such as the lowering of the applicable interest rate or the conversion of a interest rate from an adjustable to a fixed interest rate; and/or A trial period, typical three months in length, to demonstrate the borrower’s ability to make payment on a permanent modification. There are many types of modifications, the availability of which varies significantly depending upon the entities or persons that have invested in the note, the extent to which the borrower is delinquent, and the borrower’s overall financial situation. The Federal Home Affordable Modification Program (“HAMP”), the most commonly referred to modification program was created in connection with the United States federal government’s Making Home Affordable Program. HAMP has become the gold standard modification program and has served as a template for many modification programs that are not formerly associated with HAMP.However, not all investors participate in HAMP, and even within HAMP there is variation regarding the criteria and retention options available. For example, FHA loans have a separate and more stringent review process for their own version of HAMP known as FHA-HAMP. There is also a HAMP 2.0 program which relaxes some of the more stringent requirements of HAMP including the requirement the applicant reside in the property. Aside from HAMP, many loan servicers have created proprietary or in-house modification programs that often incorporate elements of the HAMP program itself. The process of applying for a mortgage modification can be frustrating and confusing. If you are facing foreclosure and are interested in resolving your financial and legal problems by obtaining a modification it may be in your interest to obtain professional counsel. If you have questions related to mortgage modifications call us today at (973) 500-8024 or (212) 960-8308, or submit your contact information below and we can contact you directly.
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