Late in 2010, the New Jersey Supreme Court had issued a moratorium on foreclosure filings in New Jersey by six of the largest banks, including GMAC, Bank of America, JP Morgan Chase, Wells Fargo, City Bank and West One. The ban on filings was due to these banks using robo-signing of documents causing illegal foreclosure filings as the filings violated the Fair Foreclosure Act. Thus, the number of foreclosures filed in New Jersey fell from 58,000 in 2010 to just 6,000 through July of 2011.
In September of 2011, the New Jersey Superior Court had lifted the last of the six injunctions on foreclosure filings when it gave the go ahead to Ally financial and its GMAC Mortgage unit to resume foreclosure actions in New Jersey. Accordingly, homeowners in New Jersey should now prepared for a flood of foreclsoures to be filed starting at the end of this year and continuing through next year. One prominent foreclosure firm has told me that they have 30,000 foreclosures ready to be filed now that the moratorium has been lifted.
Unfortunately, this moratorium has given many New Jersey homeowners the false sense that they will be able to remain in their homes indefinitely without paying their mortgage or otherwise making arrangements to cure their mortgage arrears. For those that really have no intention of trying to save their home the moratorium has been a blessing in that it has in fact bought them more time to stay in the home and hopefully save the money they would otherwise be paying to the mortgage company.
However, for those homeowners that truly wish to save their home the moratorium has perhaps made it more difficult. Due to the fact that homeowners have not been under the pressure of a foreclosure proceeding, many have put off the filing of a Chapter 13 petition to save their home. The downside of putting off the filing of a Chapter 13 is that the longer you wait to file the greater the mortgage arrears become. A chapter 13 allows you 60 months to complete your plan, thus, 60 months to pay back your arrears. So obviously the longer you wait to file and the larger your arrears become the larger the monthly Trustee payment that will be required to cure those arrears. Accordingly, the issue of feasibility comes into play. Meaning can your budget sustain the additional payment necessary to cure your mortgage arrears.
The fact is that it is much easier to fix your issues and complete a chapter 13 plan and thus, save your home if you tackle your problems sooner rather than later. So contact your bankruptcy attorney now, don’t wait until you receive the foreclosure complaint or worse the foreclosure judgment. It will put your mind at ease knowing that you are addressing your financial issues. Rest assured the foreclosure complaint is coming now that the moratorium has been lifted, so be proactive and address the issue don’t be reactive and sit and wait for something really bad to happen.