Foreclosure is a judicial procedure allowing mortgage lenders to take ownership and/or possession of the debtor's real estate (which was used to secure the loan) in the event of nonpayment in New Milford, New Jersey. Foreclosure normally results in the property being sold in an auction. Banks normally want to get rid of the property as soon as possible, even if it means taking a financial hit, and an auction is the simplest way to do this.
In every state, including New Jersey, there is an option to go through foreclosure by a judicial sale, which is a process in which a court supervises the sale of the property, and makes sure that the proceeds first go the to the holder of the mortgage, then to anyone else who may have a lien on the property, and lastly to the debtor if anything is left. In numerous states, original mortgages (as opposed to refinanced loans) are "non-recourse" loans, meaning that the most the lender can collect is whatever the foreclosed property sells for. The bank cannot go after the debtor for the balance, if the sale nets less than the amount due. You should consult an attorney in New Milford, New Jersey to learn the details of the law here. You should also know that this rarely applies to loans that have been refinanced.
How Can I Avoid Foreclosure in New Jersey?
First of all, you shouldn't dismiss the problem. You should stay in contact with your bank, and be straightforward with them. Ignoring the issue will not make it go away. It is critical to remember that banks don't really want to own homes in New Milford. In issuing a mortgage, they expect to make a profit through interest on the loan, and they'd prefer to continue collecting from you. Therefore, they're likely to make reasonable accommodations to your financial situation if it will allow you to keep paying them in the long run.
If you can't work things out with your lender, there are other avenues. You can try a "short sale," which is when you sell your house for whatever amount you can get for it, and use the proceeds to pay your mortgage. If the house sells for less than you owe, the bank still receives those proceeds, but the remainder of the loan will be forgiven. A "short refinance" may also be an option in some cases. This allows you to have some part of the debt forgiven, while refinancing the rest.
How Can A New Milford, New Jersey Attorney Help?
If you are worried about foreclosure, a good New Milford, New Jersey real estate attorney may be able to help. An attorney can increase your chances of keeping your home, and help minimize the financial impact if keeping it proves impossible.