The Mortgage Bankers Association, which monitors and reports on foreclosure rates, reported that New Jersey surpassed Florida as the state with the highest rate of “loans in foreclosure”. The report indicated that 8% of New Jersey mortgage loans were in the foreclosure process. New Jersey was the only state which reported an increase over the prior quarter.
Much of this increase may be explained by the regulations and stay placed by the New Jersey Foreclosure Courts on the six largest mortgage companies in New Jersey in 2010. During that time, there was virtually no activity in completed foreclosures causing a large backlog. Beginning in early 2013, foreclosure rates in New Jersey have seen a consistent rise – especially in comparison to those of other states.
Due to the increased numbers of foreclosures and the elimination of much of the foreclosure backlog in the New Jersey Courts, many homeowners are facing foreclosure with the real prospect of the loss of the home. We have seen many homeowners be forced to file Chapter 7 or Chapter 13 Bankruptcy cases due to recent foreclosures. Homeowners who can afford to make a mortgage payment but are in foreclosure and faced with other debt issues often benefit from the reorganization of their debt and finances by filing a Chapter 13 Bankruptcy case. Filing a Chapter 13 Bankruptcy during a foreclosure will allow a reasonable opportunity to keep the home while still protecting the owner from
For those facing a New Jersey foreclosure for the first-time, do not be mislead by history. Stories of homeowners in 3 or 4 year foreclosure cases are generally of the past. Currently, the timeline for the process of a mortgage company to proceed with a New Jersey Foreclosure from Notice of Intent to Sheriff’s Sale is no longer delayed. Those homeowners facing such situations or attorneys with clients in such scenarios without experience in these matters should immediately consult with experienced counsel.