Foreclosure in New Jersey can significantly impact co-borrowers and guarantors of a mortgage, with consequences extending to their financial and credit standing:

Liability for the Debt:

• Joint Responsibility: Co-borrowers and guarantors share responsibility for the mortgage debt. They may be liable for any remaining balance if the foreclosure sale doesn’t cover the full mortgage amount.

Credit Score and Borrowing Ability:

• Credit Impact: Their credit scores will likely be negatively affected, similar to the primary borrower. This may influence their future ability to obtain loans and other forms of credit.

Involvement in Legal Proceedings:

• Foreclosure Process: They can be involved in foreclosure proceedings, including actions for deficiency judgments. They are entitled to negotiate with the lender for alternatives like loan modifications.

Potential for Release from Obligation:

• Refinancing or Modification: There’s a possibility of being released from liability if the primary borrower refinances or modifies the loan to remove them.
• Protecting Interests: It’s crucial for co-borrowers and guarantors to seek independent legal advice to navigate their rights and options effectively in a foreclosure.

Being a co-borrower or guarantor in a foreclosure scenario demands a thorough understanding of one’s rights and liabilities, as well as proactive steps to mitigate potential risks.

If you’re a co-borrower or guarantor on a New Jersey mortgage and facing foreclosure, contact Friscia & Associates for expert legal guidance and to protect your financial interests. Call us today at (973) 500-8024 or (212) 960-8308, or submit your contact information online.