Foreclosures in NJ: What Happens?
Facing foreclosure in NJ? What exactly happens with foreclosures? Learn more about what you need to know, when facing a foreclosure. When a homeowner is unable to make mortgage payments for three consecutive months, lenders will issue a public notice that the homeowner has defaulted on his or her mortgage. A copy of the notice is sent to the homeowner or posted on his or her front door depending on the law of the state where the property is located.
During this period, the homeowner may raise enough money to pay off the mortgage, negotiate an arrangement with the lender, or even sell the property and use the proceeds to settle all his or her obligations. Homeowners are advised to take full advantage of the time given to them in order to avoid the impending foreclosure.
If after three months from the notice of default the homeowner is unable to pay off the mortgage or come up with a new arrangement with the lender, the property will then be sold in an auction called a trustee sale. A notice of the sale will be sent to the homeowner, posted on his or her front door, and published in a local newspaper.
Prior to the sale, the homeowner normally has the right to redemption which will allow him or her to stop the home foreclosure by paying off the outstanding mortgage. If the homeowner fails to make the payment, the property will be sold to highest bidder during the public auction. A foreclosure in NJ is no different than a in Florida, California or New York in that aspect. Your home can be sold to the highest bidder.
During the public auction, the property may get sold to third party. If no bids are submitted, the lender may buy the property back which they can resell either through the open market, property listings or through liquidation auctions. These properties are referred to as bank-owned or lender-owned properties.
What is clear is that foreclosure is a process, not a single event. In this process, the distressed homeowner has a lot of opportunities to salvage the property or bail out with grace. A good attitude is to take things in stride and plan what he or she intends to do.
At stake are not only the home up for foreclosure but also the homeowner’s credit history as well as future financial flexibility. A foreclosure in NJ means you’ve got a big ugly mark on your credit history. Despite a notice of default and an impending home foreclosure, the homeowner should keep his cool and consider everything as just another challenge in his or financial life.
It should help that the financial difficulties of homeowners at present are not really due to bad financial practices on their part but are due to the financial downturn that the economy is encountering.
In this whole process, the homeowner should coordinate closely with the lender. At this time of our economy when financial institutions are failing, lenders are not really keen on foreclosing and subjecting themselves the burden of disposing properties. They can be a partner in solving a homeowner’s woes.
Lastly, the threat of foreclosure distresses not only the homeowner but also his family, if any. Effort should be made to make everybody understand all the facts about foreclosure and the options available to them. Family members, rather becoming an additional burden to the homeowner, should support him or her in this time of great challenge.
