Foreclosure Law in New Jersey
Foreclosure in Ocean, New Jersey is a process that allows a lender to take possession of the property that was used to secure their loan, in the event that the borrower fails to repay it.
Foreclosure most often is a forced sale of a house at auction, since those are the most common types of property bought through a mortgage. Banks will usually try to get rid of the property as quickly as they can, selling it for as much money as they can get in a short period of time.
In every U.S. state, including New Jersey, a borrower has a right to a judicial sale of their foreclosed property. A judicial sale is simply an auction overseen by a court. The purpose of this is to make sure that the lender takes reasonable steps to sell the home for the highest possible price, and to ensure that the homeowner has an opportunity to bid on the house, if he or she is able. It is in everybody's interest for the bank to get the highest price possible for the house, even the borrower's. If the house fetches a higher price than what's left on the mortgage, the buyer can keep what's leftover. On the other hand, if it fetches less, the buyer might have to pay the deficiency.
In a large number of states, but not all of them, mortgages are a type of loan known as a "non-recourse loan." While the regulations governing these loans are complex, it most basically means that, once the house is sold, and the sale price doesn't cover what the borrower owes, the lender can't go after the borrower for the remainder. They simply have to take the loss.
How to Possibly Avoid Foreclosure in Ocean, New Jersey
First and foremost, you need to communicate with your lender, and not ignore the issue. Ignoring a problem with your mortgage will not make it go away, and can only make things worse. You should be honest with your lender, and stay in touch with them as much as possible.
You must keep in mind that banks are in the business of lending money, not flipping property: the bank doesn't really want your house. To that end, they'll sometimes go to great lengths to accommodate your financial situation, whatever it may be. For banks, foreclosure is a last resort.
If you experience a sudden change in your financial situation, your lender, in an effort to prevent you from defaulting, might be willing to accept lower monthly payments, at least temporarily.
As a last resort, you might consider a "short sale," which results in loss of the home, but it usually leads to a great deal of the debt on the mortgage being forgiven. Essentially, a short sale in New Jersey involves selling the house for whatever price it can fetch. The proceeds from the sale go to the lender, and if it sells for less than what's left on the mortgage, the balance of the debt is forgiven.
Can a Ocean, New Jersey real estate attorney help?
If you live in Ocean, New Jersey and believe that your house is in danger of being foreclosed, you may have more options and protections than you think. You may not know what all of them are, but an experienced real estate lawyer probably will.