Avoiding Foreclosure in New Jersey

If you have realized that you may soon be unable to make your required mortgage payments, or if you have already fallen behind in payments, avoiding foreclosure in New Jersey will likely be your number one priority.

Fortunately, there are several steps that you can take to help avoid foreclosure and the federal government itself may be able to offer help through one of its foreclosure avoidance programs.  A skilled foreclosure attorney can help you evaluate these options, as well as communicate with the mortgage provider to obtain the best possible outcome in your case.

Federally Sponsored Programs for Avoiding Foreclosure

The federal government has developed a number of programs that can help homeowners who are struggling with their mortgage payments.  The Making Home Affordable (MHA) program is a federally sponsored program designed to allow certain homeowners to modify their mortgage payments to obtain lower, more manageable payments.  Depending upon the borrower’s circumstances, the following programs may be able to aid in avoiding foreclosure in New Jersey:

  • Home Affordable Modification Program (HAMP). This program is designed to lower homeowners’ mortgage payments to limit these payments to 31 percent of the individual’s monthly gross income (income verification is required).
  • Principal Reduction Alternative. This program encourages mortgage lenders to reduce the amount of principal owed on mortgages when the home is worth significantly less than the amount that the homeowner owes.
  • Treasury/FHA Second Lien Program. Homeowners with second mortgages may be able to refinance or even eliminate the second mortgage if the first mortgage holder agrees.  If this program applies, the total amount of the individual’s mortgage debt following the refinancing of the second mortgage cannot exceed 115 percent of the home value.

Federal programs can also help borrowers exit their mortgages entirely while avoiding foreclosure in New Jersey, whether through short sales or deeds in lieu of foreclosure.  These options can often help the borrower find more affordable housing.

The U.S. Department of Housing and Urban Development (HUD) maintains a program that funds counseling for homeowners who may be interested in any of these programs (these counselors are typically free or very low cost).

Avoiding Foreclosure for Unemployed Borrowers

Homeowners who are unemployed are likely to have an especially difficult time meeting their mortgage obligations, and may qualify for assistance through the following programs:

  • Home Affordable Unemployment Program (UP). UP applies if the homeowner is unemployed, and can provide a temporary reduction or complete suspension of mortgage payments for up to 12 months while the homeowner attempts to find new employment.
  • FHA Special Forbearance. Homeowners who are unemployed and have no other income can benefit from an extended forbearance time period so that payments may be reduced or suspended for up to 12 months.

Working with the Lender

Avoiding foreclosure for many homeowners can also be accomplished by working with the lender directly to reduce unmanageable mortgage payments.  The lender may be willing to refinance the mortgage or may have its own mortgage assistance program to help borrowers who are having difficulty with payments.

These programs may provide the best option for borrowers in less extreme cases, but it is important to have an attorney review any offer of assistance in order to make sure the option is advisable.

An Attorney Can Explain Options for Avoiding Foreclosure

Contacting an experienced foreclosure attorney can help you understand the variety of federally sponsored options that are available.  Importantly, an attorney can help with avoiding foreclosure in New Jersey by evaluating any options that are offered by your mortgage lender directly.

Contact an attorney today for advice as to the impact of any potential mortgage modification, short sale or mortgage suspension or reduction offer.