Category Archives: Faq

Are there different mortgage modifications options available through the HAMP program?

Yes, the HAMP program includes a few possible workout options that may be available to you. Possible mortgage loan modifications available under HAMP for borrowers in foreclosure or at imminent risk of foreclosure include, but are not limited to the following:

FHA-HAMP
The Federal Housing Administration (FHA) is one of the biggest networks in the country that supports the HAMP loan modification programs. It has its own flagship HAMP program available for qualifying homeowners in or at imminent risk of foreclosure. The FHA-HAMP program gives qualifying borrowers with FHA insured loans to avoid foreclosure by entering into a modified mortgage loan with lower monthly payments. The FHA-HAMP program is notable in that allows for the inclusion of what is referred to as a partial claim. This partial claim is an interest free loan that can effectively make otherwise non-qualifying mortgage notes qualify for a modification. This partial claim note can be used to cover as much as thirty percent (30%) of a borrower’s delinquency, and it need not be repaid until the first mortgage note is paid off or if the borrower ceases to be the owner of the property.

VA-HAMP
The Department of Veterans’ Affairs (VA) offers its own modification program through HAMP. This program can provide veterans a great way to avoid losing their homes to foreclosure. VA-HAMP is a program that all VA home loans in foreclosure or at imminent risk of ending up in foreclosure will be considered for provided that the appropriate documentation is submitted in accordance with the plan. However, note that the VA requires that VA notes first be reviewed and denied for other traditional loss mitigation options before the borrower is considered for VA-HAMP.

FHA Short Refinance
Although it is not technically a HAMP affiliated program, the FHA Short Refinance is a great program for a distressed homeowner who is in foreclosure or at imminent risk of foreclosure. If your home is under water, meaning it is worth less then what is owed on your mortgage, you could potentially qualify for this option which may eliminate the difference between the worth and what is owed and lower your mortgage to a more controllable amount. This is very similar to the bailouts that allowed large companies to continue to conduct business without having to declare bankruptcy. In short, if it allows you to keep you in your home, it only positively affects you as well.

Home Affordable Unemployment Program (UP)
There are special programs set up for people who are unemployed, such as, the Home Affordable Unemployment Program or UP. You will still be able to obtain help to keep your home even if you do not have a steady income. In order to qualify for this program, you simply must qualify for unemployment benefits in your state. This is one way to obtain immediate help when you are unable to obtain it elsewhere. An attorney can better assist you and inform you more about this, including any special circumstances or possible restrictions that may exist.

If you are interested in learning more about mortgage modifications, or if you have any related questions call us today at (973) 500-8024 or (212) 960-8308, or submit your contact information below and we can contact you directly.

Should I hire a foreclosure defense attorney?

There are countless reasons why families end up with financial problems. Unfortunately, sometimes these problems led to people missing mortgage payments. While banks typically allow borrowers to miss a few payments without serious consequences, homeowners should expect a foreclosure action to be filed if such a default is not quickly fixed. With the help of a skilled and experienced foreclosure attorney, borrowers in default can protect themselves by delaying the foreclosure process and working with the bank’s counsel for the purposes of attempting to resolve the foreclosure dispute by entering into a modified mortgage payment with their lenders.

Fight Fire With Fire
If you are a homeowner in foreclosure or at imminent risk of entering into foreclosure you should consider the fact that your mortgage company has or will hire legal representation for the purposes of obtaining a foreclosure judgment against you. Typically, the most effective way to protect yourself from the mortgage company and its legal counsel is for you to obtain your own legal representation. A legal team such as that of Friscia & Associates, LLC, that concentrate on foreclosure defense can provide useful advice on how to proceed with the efforts of keeping your home. When dealing with an issue both as sensitive and important as that of your home, it is worth seriously considering legal assistance. Such representation can free you of the complications and burdens associated with defending yourself from the legal process. Moreover, experienced legal representation can put you in the best position to settle a foreclosure in connection with the modification of your home loan. This is a lot for someone to have to take on their own during their busy lives and schedules. Hiring an attorney is the obvious choice to handle these matters on your behalf.

If you are interested in learning more about foreclosure defense, or if you have any related questions call us today at (973) 500-8024 or (212) 960-8308, or submit your contact information below and we can contact you directly.

What are possible mortgage modification and/or workout options for distressed homeowners?

In normal circumstances homeowners in New Jersey and elsewhere do not have a legal right to obtain a mortgage modification, forbearance, short sale or other workout options, many if not most lenders and servicers have loss mitigation departments which evaluate homeowners for possible workout options to prevent the loss of homes in connection with foreclosures.

Commonly available workout options include but are not limited to the following:

Refinance: Refinancing could possibly be an option. HOPE for Homeowners is an FHA refinance loan options for qualifying homeowners. This was created to help protect qualified homeowners from foreclosure by preventing loan defaults. Refinancing is typically impractical for most homeowners without using a government program as the value of most homes are less than the amount that is owed on the loan.

Reverse Mortgage: A reverse mortgage is commonly used by senior citizens. It helps them to access the equity in their home for retirement. To use a reverse mortgage to prevent foreclosure, you typically must be 62 years of age or older and have equity in the property.

Mortgage Loan Assumption: A “due on transfer” provision is typically included in mortgage loans unless waived by the lender. If it is waived, it will allow an individual or entity to take over the obligation to make payments on the loan as long as they are qualified. Typically this is used to sell of the property to a third party. If the individual or entity assuming the payment obligation on the loan defaults, the lender can possibly release you from personal liability on the note.

Loan Guarantee Partial Claim: If you have mortgage insurance, your lender may provide a interest-free loan in order to help you bring your account current.

Reinstatement: You and your lender come to an agreement where you pay all amounts owed on the loan to bring your mortgage current including any and all late fees, attorney fees, taxes, insurance, etc. Once the amount is satisfied, then you will be back on your regular monthly payment schedule and the attorney for the lender will dismiss the foreclosure action against you.

Repayment Plan: You and your lender come to an agreement where resume making your regular monthly mortgage payments, in addition to an agreed upon amount each month until you have paid the owed arrears to reinstate the loan.

 Loan Modification: This is where the lender agrees to make changes to the terms of your mortgage allowing you to remain in your home. The terms that may be subject to charge are extending the amount of time you have to pay off the loan in full, reducing your interest rate, converting an adjustable rate loan to a fixed rate loan, or adding the missed payments and late fees, etc. to the back end of your loan.

Forbearance Agreement: A forbearance agreement allows borrowers to repay the delinquency of a loan over a period of time. Your regular monthly payment would be made an addition to an agreed upon monthly payment to apply to the delinquent amount. Once the amount of the delinquency is paid in full, your normal monthly payments will resume. Sometimes a forbearance plan will include additional incentives such as a suspension or reduction of payments for a period of time allow you to make up the default. They may also provide you time to pay you regular monthly mortgage payment only prior to the beginning of the repayment of the arrears. A repayment may be allowed for a period of six months and allow reasonable foreclosure and late fees to be included as part of the repayment schedule. However, they arrears may only be collected once the loan has been reinstated.

Extension Agreement: This is where you pay a lump sum of the amount of your delinquency up front, and the remaining amount is added to the back end of your loan.

Principal Forbearance: A Forbearance is the repayment of a portion of the principal interest-free. The original borrowed amount on your mortgage loan less any payments that you make until the loan is paid in full or the property is sold is the principal amount due and payable at maturity of the loan. The payments on the loan partially, amortize the loan.

Principal Reduction: This is where the lender agrees to reduce the principal amount owed on the loan. This is possible if you have a negative amortization loan.  A negative amortization loan is where you are paying less than is required to pay off the loan in full during the loan’s term.  The lender would reduce the principal to the original loan amount. In exchange for the principal reduction, a shared appreciation mortgage (SAM) may be required. This is a fixed rate, fixed term loan. You would agree to release a portion of the home’s future value in exchange for a lower interest rate.

Short Sale: This is the sale of the property for less than what you owe on the mortgage. Lenders may consent to you selling the property at a lesser amount and lose out on collecting the fees associated with foreclosure, because it preferable to foreclosure action as lenders face the risk of substantial loss from litigation and other related costs associated with a foreclosure action and including real estate taxes and insurance. With a short sale, the lender may agree to relieve you of liability for any deficiency.

Deed in Lieu of Foreclosure: This is where you voluntarily agree to conveying your property to the lender in by executing a Deed. In exchange for you executing a deed the lender will cancel the debt you owe on the loan. The lender will typically agree to forgive the deficiency that may remain on after the house is sold. Once the deed is executed and returned, the lender will no longer move forward with foreclosure proceedings or dismiss any foreclosure action against you.

Voluntary Surrender/Cash for Keys: This is where your lender may offer you money to vacate the premises prior to a sheriff sale. The house must be in good condition without any damages caused by you.

Please note that although each of the above referenced loss mitigations possibilities exists, this should not be taken to imply that your lender or servicer offers any or all of these workout solutions. Further note that in the event that your lender or servicer offers one or more of these solutions to some borrowers does not mean such solutions are available to all customers. Related to this, through the loss mitigation application process the finances of distressed borrowers are evaluated to determine whether the relevant borrowers have the financial wherewithal to make a payment that is satisfactory from the lender or servicer’s perspective. Moreover, when being reviewed in connection with the loss mitigation process, banks consider the reason a borrower default, the appraised value of the property and the amount of the arrearages, in addition to a borrower’s’ ability to pay.

If you are interested in learning more about mortgage modifications, forbearances, cash for keys or other mortgage workout option, or if you have any related questions call us today at (973) 500-8024 or (212) 960-8308, or submit your contact information below and we can contact you directly.

How does the sheriff sale process work in New Jersey?

New Jersey’s sheriff sales are administered by the sheriff’s department associated with the county in which the relevant property is located. Thus, in New Jersey the sheriff sale process is conducted in accordance with the local rules of the county in which such a sale takes place.

Notwithstanding the local distinctions between the sheriff sale process in New Jersey from county to county, in the context of all New Jersey sheriff sales the relevant properties are sold subject to the first mortgage on the property, if applicable, which typically takes the form of the first lien on the property. Furthermore, such a sale in New Jersey is subject to any local, state or federal liens. Given the possible existence of these liens or other liens, a title search is typically run prior to bidding to determine the manner and extent to which the property is encumbered by liens. It is imperative that bidders obtain the information provided in the title report, specifically as it related to outstanding liens, as the successful bidder at the sheriff’s sale auction assumes as must ultimately pay for such liens.

The auction associated with a sheriff’s sale is conducted by way of a voice auction. Typically the creditor/plaintiff (i.e. the bank’s attorney) will being the bidding process with a hundred dollar ($100.00)  bid, with bidding continuing until a winner in the form of the highest bidder for the property is determined. If the successful bidder is a party other than the plaintiff/creditor’s counsel, the plaintiff’s counsel will keep bidding to ensure that another party does not obtain the property in connection with a bid that represents an amount less than the amount of the judgment owed to it. Put differently, the plaintiff’s attorney will continue to escalate its bid until the upset amount, which typically refers to the amount owed on the first mortgage plus certain fees and costs, is reached. This strategy is employed for the purpose of protecting the plaintiff from a situation in which a savvy third-party bidder is able to assume that property for an amount less than the judgment amount resulting in the creditor in question not being made whole. As a corollary to this, once the upset price is reached, the plaintiff/creditor’s attorney often does not continue to bid as the creditor’s interest are protected by virtue of a third-party bid which exceeds the upset price.

Once the highest bidder has been determined the sale will be concluded. At this time, the successful bidder must put down a deposit in the amount of twenty percent (20%) of the successful bid. Further, in New Jersey, the conclusion of this sale triggers a ten (10) day redemption period for the benefit of the defendant property owner. During this period, the former owner can attempt to object to the sale or the former owner can redeem the property by paying off the amount associated with the judgment in question, in addition to other liens, fees and costs. After the redemption period has expired, assuming the former property owner neither redeems nor successfully disputes the sale, a Sheriff’s Sale Deed is prepared. In New Jersey, this occurs approximately thirty (30) days after the auction. On or before the expiration of thirty (30) days from the date of the Sale Deed the balance owed in connection with the successful bid must be paid.

In the context of New Jersey sheriff sale auctions, after the balance is paid the purchaser becomes the rightful owner of the property. As such, the purchaser is required to pay all related fines and record the relevant deed. Moreover, the purchaser is required to furnish the former owner with notice that title has transferred.

If you are interested in learning more about New Jersey sheriff’s sales, or if you have any related questions call us today at (973) 500-8024 or (212) 960-8308, or submit your contact information below and we can contact you directly.

How can a sheriff’s sale be delayed or stopped in New Jersey?

In New Jersey there are four stays, also known as adjournments, pursuant to which a Sheriff’s Sale, following the successful prosecution of a foreclosure action, can be delayed. The borrower is entitled to two of the four stays, and the lender is entitled to the remaining two stays. Each such stay entitles the exercising party with the right to delay a Sheriff’s Sale for a two week period. Additional stays may be available in certain specific circumstances, but such additional stays require a Court Order. Often a foreclosure defense attorney can assist homeowners seeking to stay or contest a scheduled Sheriff’s Sale.

If you have any questions regarding foreclosure or Sheriff’s Sale, or if you have any other related questions call us today at (973) 500-8024 or (212) 960-8308, or submit your contact information below and we can contact you directly.

What is a sheriff’s sale? How does it work in NJ?

In New Jersey, a Sheriff’s Sale effectively marks the end of the foreclosure process, as a Sheriff’s Sale, if successful, results in the sale of a borrower’s former property to an uninterested third party. This is achieved by way of an auction sale of real property conducted by the county sheriff following the successful prosecution of a foreclosure action by a lender. Specifically, the sheriff holds such property pursuant to a court order to seize and sell the property to satisfy a foreclosure judgment, after notice to the public.

Under New Jersey law a Sheriff’s Sale takes place only after the entry of a Final Judgment in a foreclosure case. After the entry of such Final Judgment, a Writ of Execution is issued and sent to the sheriff who in turn is charged with scheduling a sale. The sheriff is required to schedule a sale within 120 days the sheriff’s receipt of the Writ of Execution.

If you are interested in learning more about New Jersey sheriff’s sales, or if you have any related questions call us today at (973) 500-8024 or (212) 960-8308, or submit your contact information below and we can contact you directly.

Does filing bankruptcy stop a foreclosure?

Many people faced with an imminent foreclosure related sheriff’s sale seriously consider filing for bankruptcy. In this type of situation bankruptcy may be an attractive option because a bankruptcy filing delays a foreclose. However, it is important to note that this delay is only temporary.

A bankruptcy has the benefit of this delay because immediately following a bankruptcy filing the Bankruptcy Court issues a court order referred to as an automatic stay. This automatic stay simultaneously notifies the creditors of the party that has filed bankruptcy of the existence of the bankruptcy case and orders these creditors to immediately stop pursuing all collections related activities including a foreclosure itself. This could have the benefit of delaying a previously scheduled sheriff’s sale while the bankruptcy case is pending, which is often three to four months.

While a bankruptcy temporarily delays sheriff’s sales, the bankruptcy is itself only a very temporary solution to a struggling homeowner’s problems. Not only is this brief delay limited to the period in which the bankruptcy is pending, but the homeowner’s lender may in certain situations be able file a motion with the Bankruptcy Court to lift the stay. If granted and the stay is lifted, the lender can proceed to sell the home.

If you are interested in filing a Bankruptcy, or if you have any related questions call us today at (973) 500-8024 or (212) 960-8308, or submit your contact information below and we can contact you directly.

How can I save my house if I am in foreclosure in New Jersey?

While a foreclosure is never a pleasant experience, all hope is not lost if you have been sued by your lender and are currently in foreclosure. Indeed, there are a few ways in which you can save your home from foreclosure.

For example, if your property is a primary residence you may qualify to participate in New Jersey’s foreclosure mediation program. This program offers a structure process in connection with which countless New Jersey homeowners have successfully negotiated deals with their lenders, typically involving more favorable mortgage loan terms. In other case, New Jersey homeowners have succeeded in getting their foreclosures dismissed because of the effectiveness of their affirmative defenses and/or due to a procedural or technical violation on the party of the Plaintiff. In yet other situations New Jersey homeowners have been able to save their homes, even though they had been sued for foreclosure, because they successfully reinstated their mortgage loan before the entry of Final Judgment which is permissible under New Jersey’s Fair Foreclosure Act for certain qualifying properties.

If you are interested in learning more about New Jersey’s foreclosure process, or if you have any related questions call us today at (973) 500-8024 or (212) 960-8308, or submit your contact information below and we can contact you directly.

How Much Time Do I Have to Respond to a Foreclosure Lawsuit in New Jersey?

In New Jersey Defendants to a foreclosure complaint or lawsuit have a total of thirty-five (35) days from the date in which they are served to respond to the foreclosure action that has been brought against them. Responding to a foreclosure complaint or lawsuit can be confusing given the related technical requirements.

The steps that must be taken to successfully respond to a foreclosure in New Jersey include but are not limited to filing an Answer, which is a legal response, to the foreclosure lawsuit within 35 days of the date at which the Defendant has been served. Such a response must be filed with the court. Moreover, the Defendant in a New Jersey foreclosure action must serve the Plaintiff, the party who brought the case against you, with such a response within the designated period of time. However, if the case Plaintiff is represented by counsel, a lawyer or law firm, the Answer to the foreclosure lawsuit must be served on the relevant counsel.

If you are interested in learning more about New Jersey’s foreclosure process, or if you have any related questions call us today at (973) 500-8024 or (212) 960-8308, or submit your contact information below and we can contact you directly.

What do I do if I was Served with a Foreclosure Lawsuit in New Jersey?

If you were served with a foreclosure action in the state of New Jersey you should strongly consider consulting with a New Jersey attorney. Individuals can respond to foreclosure lawsuits on their own behalf. However, it is prudent to evaluate your case with a professional who may be aware of affirmative defenses and/or counterclaims that could benefit your case which a layperson might not be aware of.

If you are interested in learning more about the foreclosure process, or if you have any related questions call us today at (973) 500-8024 or (212) 960-8308, or submit your contact information below and we can contact you directly.