Does Loss Mitigation Stop Foreclosure in New Jersey?

Owning a home is often more difficult than many people realize. Not only are you responsible for upkeep and maintenance, but you must always stay on top of mortgage payments. If you have fallen behind and are afraid that foreclosure is on the horizon, talk to our legal team about entering loss mitigation. This legal process might help you negotiate with lenders or creditors so that you can avoid foreclosure.

Loss mitigation is available in New Jersey to those facing foreclosure. It allows you to meet with creditors and negotiate the terms of your mortgage so that, hopefully, foreclosure can be avoided. While loss mitigation is not successful in every case, it has helped many people in debt keep their homes. To be eligible, you must file for bankruptcy under Chapter 11, 12, or 13, and the property involved must be real property. Loss mitigation may allow you to modify your loan or work out some other agreement with your creditor. Your first step is hiring an experienced attorney to help you negotiate.

Get a free case evaluation from our New Jersey mortgage foreclosure defense lawyers with Young, Marr, Mallis & Associates when you call (609) 755-3115.

How Loss Mitigation May Affect Foreclosure in New Jersey

New Jersey’s loss mitigation program may be available to certain people filing for bankruptcy and is designed to help people avoid losing real property, such as their home. Essentially, the program allows debtors and creditors to arrange formal meetings or hearings to discuss the terms of the debtor’s loan or mortgage and hopefully work out an agreement that allows creditors to get the money they are owed and debtors to keep their homes and avoid foreclosure.

Whether or not loss mitigation can help you prevent foreclosure depends on your unique circumstances and what happens during negotiations. Perhaps our New Jersey mortgage foreclosure defense lawyers can help you rework your mortgage terms so that you can better afford payments. Maybe the creditors will accept a smaller lump sum payment instead of the total value of all your missed payments. It all depends on whether the parties can reach an agreement.

Remember, loss mitigation is about give and take. While you might be able to avoid foreclosure, the creditor in your case will be looking to get what they want, too. If you have missed far too many mortgage payments or there is simply no way for you to catch up on payments, loss mitigation might not be of much help. The best way to find out is to ask your bankruptcy attorney.

Who Can Participate in New Jersey’s Loss Mitigation Program?

To participate in the loss mitigation program, you need to meet certain eligibility requirements. These requirements are not incredibly strict, and many people in debt or facing foreclosure of real property may be eligible. Even so, you should speak to an attorney about the program and whether you can participate as soon as possible.

First, you must be a debtor filing for bankruptcy under Chapter 11, 12, or 13. If you are in debt and worried about the future of your home and mortgage but have not filed for bankruptcy, you might not be able to engage in loss mitigation. Talk to a bankruptcy attorney about how to get your case started and whether loss mitigation might be available.

Second, the property at the heart of your case must be real property in which you hold an interest. Loss mitigation does not apply to personal property such as vehicles, furniture, jewelry, or other valuables. Because of this, loss mitigation might not work well for people facing bankruptcy but who do not actually own property. For example, if you are a renter filing for bankruptcy, the loss mitigation program might not be very useful.

Third, the debt in your case should involve some kind of loan or line of credit. A mortgage, lien, or other credit secured by property usually suffices.

Creditors may also participate or even initiate loss mitigation proceedings. You may be eligible to participate if you are a co-debtor or even a third party as long as your participation is necessary or desired by the main parties involved.

Possible Outcomes of Loss Mitigation for People Facing Foreclosure in New Jersey

The loss mitigation program is not foolproof, but it can help people in debt come to agreements with creditors and avoid foreclosure. One possible outcome is that you and the lender on your mortgage may agree to modify the terms of your mortgage. This might mean reducing monthly payments to something more affordable.

Another possibility is that your lender or creditor may agree to allow you to enter a forbearance period. No payments need to be made when a mortgage or loan is on forbearance. This period may help you get your finances in order and hopefully resume mortgage payments after the forbearance period.

You might also work out an agreement to extend payment deadlines. If you are past due on payments or are very close to being past due, the lender or creditor, in your case, might be persuaded to adjust these dates so you have more time to get the necessary funds.

Still, you might avoid foreclosure without keeping your home. For some, keeping their home is simply not a realistic possibility. To avoid foreclosure and the associated hit to your credit, you might agree to a short sale or otherwise sell the home without a foreclosure.

How a Lawyer Can Help You During Loss Mitigation and Foreclosure in New Jersey

While loss mitigation might not take place in a courtroom, you should still have an attorney to help you. Remember, you typically can only participate in loss mitigation if you have also filed for certain bankruptcy chapters, meaning you should already be working with a bankruptcy attorney who can assist you with loss mitigation.

The whole purpose of the loss mitigation program is to work out agreements with lenders and creditors, and a great deal of negotiating is involved. Negotiation can be difficult, and it is best to have an attorney with strong negotiation skills. Your lawyer can also assess the situation and advise you on the realistic possible outcomes of loss mitigation. This way, you know the best and worst possible outcomes for your specific situation and can make stronger plans to hopefully get what you need.

Call our New Jersey Mortgage Foreclosure Defense Attorneys for Assistance

Get a free case evaluation from our Trenton, NJ mortgage foreclosure defense lawyers with Young, Marr, Mallis & Associates when you call (609) 755-3115.