Most homeowners don’t pay enough attention to educating themselves about the foreclosure process. Look at it this way, if you’re buying a home and don’t know the foreclosure process and your options, you’re like a soldier without a rifle - you are flying blind my home-owning friend. Educating yourself about the foreclosure process and your options should be one of the first things a homeowner should do before or after buying a home. This blog will explore the foreclosure process and how you could save your home or investment property through a bankruptcy.
Foreclosure is the judicial process by which a lender takes title and possession to property after a homeowner stops making mortgage payments. Generally, a “mortgage” is comprised of a promissory note (the “Note”) and a mortgage (the “Mortgage”). The Note memorializes the money lent to the homeowner to fund the purchase, the terms of repayment, and the borrowers promise to repay the money lent. The Mortgage is the “security” for the Note i.e. it gives the lender the right to take the property if the Note isn’t repaid. The Sheriff then sells the property at public auction and the money received is given to the lender as repayment for the Note. New Jersey is a judicial foreclosure state, meaning the lender must go through the courts to foreclose upon a property. A lender cannot resort to “self-help” by changing locks or just showing up and demanding the owner vacate the premises.
Were you recently denied a loan modification by Wells Fargo? Has your home been forced into foreclosure? Do you believe you meet all the requirements for a loan modification? You may be one of hundreds of unknowing customers recently harmed by the bank’s computer glitch, causing eligible homeowners to be denied a modification.
Many people file for bankruptcy to protect their real property from being foreclosed on. There is a specific section within the Bankruptcy Code that mandates that creditor collection actions against property of the debtor must cease immediately upon the filing of the bankruptcy. This blog will explore that section of the bankruptcy code and how parties can avoid a creditor obtaining relief from that section.
The foreclosure process can be complicated and seeking legal representation is always recommended. Sometimes borrowers ignore the foreclosure timeline until their property is sold at a sheriff sale. The borrower, however, should have been properly served with the notice of sale. The sale is the last step in the foreclosure process and effectively divests the ownership interest into the sale purchaser. What happens if the borrower seeks to save their property after the sale? This is a possibility, but places a large burden on the homeowner.
Many people who own real property through a single member limited liability company or sole shareholder corporation tend to think of the real property being owned by them individually. However, the Bankruptcy Code has different rights for individuals who own real property than entities. This blog will explore how the Bankruptcy Code affects an entity whose sole asset is real property and things to consider if you are considering putting such an entity into a bankruptcy case.
If you own a home and you are in financial turmoil, you may be wondering what will happen to your home if you file for bankruptcy. For many, the primary concern that they have when entering the bankruptcy process is that their home is protected. This blog will explore the implications of filing for personal bankruptcy in a chapter 7 or chapter 13 on an individual’s residential real property.
As an aside, in either chapter 7 or chapter 13 a debtor would need to continue to pay their mortgage and property taxes in order to avoid an eventual foreclosure.
Due to unforeseen life circumstances, many individuals fall behind on mortgage payments, which will eventually lead to foreclosure proceedings. In order to avoid foreclosure, or during the foreclosure process, an individual may seek a loan modification from the lender. A loan modification is a permanent restructuring of the mortgage terms to provide a more affordable payment to the borrower. In general, the primary goal is to help the borrower reduce their monthly mortgage payments to 31% of their gross income.
Real estate foreclosure in New Jersey has many technical requirements and many different time frames to keep track of whether or not you are the lender or the borrower. Sometimes when title defects are discovered during the foreclosure process, it is sometimes best to dismiss the action without prejudice and re-file to ensure clear title. A clear title is a property title without any kind of lien or levy from creditors or other parties and poses no question as to legal ownership. However, not all errors will necessarily cause the foreclosure to be defective. This post describes some, but not all, of the potential issues that may arise as well as some solutions to these problems.
Foreclosure is the action of taking possession of a mortgaged property when the mortgagor (borrower) fails to keep up with their mortgage payments. The collateral is ultimately put up for sale by the creditor. Foreclosures vary from state-to-state and can be initiated either judicially or non-judicially. To be non-judicial, there must be a clause in the mortgage that provides for sale of the property in the event of default. In a non-judicial foreclosure, the lender will complete the foreclosure without the court system. In a judicial foreclosure, a civil lawsuit is filed against the borrower to obtain a court order to foreclose. Judicial foreclosures eventually end with the property being sold at a sheriff sale to the highest bidder. New Jersey is a judicial state.
