Can I Sell My Home If I’m Behind on My Mortgage?

If you have fallen behind on your mortgage payments and cannot find a way to catch up, you may think selling your home is the only way to get on top of your finances. As long as your lender has not foreclosed on your home yet, you still have the opportunity to sell your home and get out from under your mortgage. But in this situation you need to move quickly and decisively. Here is everything you need to know about selling your home after you have fallen behind on your mortgage payments.

The foreclosure process will start soon after you begin to miss mortgage payments. Even missing just one payment can cause you to receive a foreclosure notice in the mail. After you are more than 120 days late, your lender is legally able to reclaim your home and sell it in order to recoup their money. At this time, you will be forced out of your home. The foreclosure will also appear on your credit report and can drop your credit score drastically, impacting your ability to get future lines of credit. Fortunately, you have up until the actual day of foreclosure to sell your home on your own.

Even if you think you are heading towards foreclosure, you can still get in front of your situation and take financial control back. How you go about selling your home before foreclosure depends on whether your house is worth more or less than what you owe on your mortgage. You will be able to sell your home and use the profits to pay back your lender as long as the fair market value of your home is greater than what you still owe on your loan. Taking this path will look much like the steps you would take to sell your home at any time: find a real estate agent and hope you receive acceptable offers on your home. You will not normally need to get your lender’s permission to sell your home like this.

If you find your home is worth less than the amount you still owe your lender, you will need to sell your home as a short sale to avoid foreclosure. A short sale is when you accept an offer on your home that will not cover the full amount you still owe on your mortgage. You will need to get the approval of your lender in order to go down this path, however this may be difficult. Lenders automatically lose money on short sales so they may not be eager to approve. You will need to submit a hardship letter explaining why you can’t make your mortgage payments and evidence to support this claim.

Many lenders will eventually accept your short sale offer as long as you meet specific demands to help meet their bottom line. You might find yourself responsible for repairs and many closing fees so you need to decide if you want to take on these costs (and if you can even afford to do so). Your agent and real estate attorney will be able to help you negotiate these terms. A short sale will do much less damage to your credit than a foreclosure and will allow you to stay in the home until the sale is completed.

If you are behind on your mortgage payments, but you want to stay in your home, there are also other options besides selling or foreclosure, like mortgage forbearance or mortgage modification. Veitengruber Law can help you find the right solution for your specific situation.

How to Take Advantage of Your NJ Home’s Equity

NJ home equity loan

Your home is likely the biggest investment you will ever make and it can be an extremely valuable asset. The best way to take advantage of the full value of your home is to utilize your home equity. Equity is the difference between what you owe on your mortgage and what your home is worth. Every time you make a payment on your home, your equity grows. Changes in the market value of your home can also increase your equity, as can certain home improvement projects. Here are three ways to tap into your NJ home’s equity.

1. Home Equity Line of Credit (HELOC)

A home equity line of credit is a great way to borrow money that will fund smaller home improvement projects. Like a credit card, a HELOC has a set limit on how much you can borrow and you will pay interest only on the exact amount you have borrowed. A convenience factor of a home equity line of credit is that you can withdraw money as you need it instead of all at once as a lump sum. The interest rate for most HELOCs is variable, but you can usually get a lower rate than you’d get using credit cards or personal loans. You will have a predetermined time frame to pay back the HELOC, at the end of which the balance must be paid off in full. Keep in mind that the more you borrow, the higher your monthly payment will be. Like credit cards, HELOCs are flexible. Also like credit cards, it can be easy to get in over your head with overspending and rising interest rates.

2. Home Equity Loan

These are less common than HELOCs. A loan will allow you to borrow a lump sum at one time and pay a fixed interest on the amount over a predetermined period of time. This is also a type of second mortgage. Home equity loans are great because they offer a fixed interest rate, meaning your monthly payments will not change and you will know ahead of time exactly how long you will be paying off the loan. However, homeowners should be careful when tapping into all of the equity in their home at once. If property values in the area decline, you could end up owing more on your home than it is worth. Loans are great for big home projects and one-time expenses.

3. Cash-Out Refinance

This option allows you to get a new mortgage for more than the unpaid principal balance on your old loan. You use the new loan to pay off your old loan and then have additional money left over. You can use this to renovate your home, pay off other debts, or even finance college. Since you are essentially replacing your mortgage, be sure to closely review the terms of your new loan. Double check the interest rate and fees of the new loan before you agree to the terms. You will also be responsible for closing costs, so make sure you can afford to pay between 2% and 5% of the mortgage.

Whenever you borrow against the equity of your home, your home is being put up as collateral. With that in mind, it can be a great way to borrow money as long as you carefully consider the best option for your unique situation!

The Biggest Mistake You Can Make While Saving to Buy a Home

money mistakes

When you are in the market to buy a home, the more savings you have, the better. Between closing costs, your down payment, and other home buying expenses, the out of pocket cost of buying a house can add up. It can be tempting to use your hard earned savings, a retirement fund, or even your emergency funds in order to have sufficient funds for a down payment. But cleaning out your savings to buy a home is a very bad idea—and here are three reasons why.

1. Unexpected Expenses

After you buy a home, you will need a strong emergency fund more than ever before. Your emergency fund should include at least three months of expenses saved in the event you lose employment. For a homeowner, that’s at least three months of mortgage payments, homeowner’s insurance, home maintenance, utilities, and all the little expenses that add up when you own a house. If you use your emergency savings to buy the house, you may not be able to absorb the costs of any unexpected repairs that pop up down the road. Tapping into your emergency fund to pay for your down payment or closing costs could leave you high and dry.

2. Continuing to Save, Even After Becoming a Homeowner

If you have to clean out your savings accounts in order to purchase a home, chances are you can’t actually afford the home in the first place. As soon as you sign your name on the closing paperwork, you’ll be responsible for a whole heft of new expenses, including your monthly mortgage payment, homeowners insurance, property taxes, indoor home maintenance expenses, exterior maintenance (ranging from lawn care to snow removal and SO MUCH in between), and utilities. Will you still be able to contribute to your savings account on top of these new expenses? While you may be able to afford the out of pocket expenses to buy a home on paper, if buying the home means you cannot afford to keep saving in the future, it isn’t a good financial choice. You are better off waiting to buy a home until you are in a position to purchase a home without touching your emergency savings AND keep saving.

3. Becoming “House Poor”

If you’re like most Americans, your savings fund isn’t just for emergencies—it’s also where you build up enough money for vacations, to travel to visit family, or to refresh your spring wardrobe. A house might seem worth the sacrifice now, but know that the excitement of a new home will wear off just like everything else. You don’t want to be scraping by to survive and lose the ability to enjoy other aspects of your life. Roughing it out in an affordable rental for a few more years while you save more money can allow you to continue living your preferred lifestyle while still working towards the eventual goal of homeownership.

Buying a home is exciting and it can be tempting to go for broke to finally have your own place. We recommend that you keep building your savings until you are truly ready to purchase a home. Not sure if you’re ready? Reach out to Veitengruber Law and we can tell you straight up if you should go for it now, or if you’re truly better off waiting.

The New Jersey Homeowner’s Guide to Tax Credits

new jersey homeowner

New Jersey homeowners are burdened with the highest property tax rates in the US. It is no wonder that every year, NJ homeowners look for ways to reduce their tax bill. The good news is there are a lot of ways to find tax relief in New Jersey; and we’ve compiled a list of four strategies for you right here on the Veitengruber Law blog.

Every single NJ homeowner has the right to challenge the taxable value of their home. While you cannot change the state property tax rate, you can change the number your home is valued at and therefore lower the cost of property taxes you pay. An NJ home valued at $250,000 and taxed at 2.4% (the NJ average) would create an annual property tax of $6,000. The homeowners of this property can appeal the taxable value of the home. If the appeals board agrees and lowers the value to $200,000, their new property tax bill would be $4,800. Even a minor adjustment can save NJ homeowners thousands of dollars over the course of their lifetime.

You can determine the taxable value of your home by visiting the NJ Department of the Treasury website and searching your county’s property records. Your individual county might have further information about how they assess property value, schedules, and assessor records. Once you know the taxable value of your home, you can appeal your property tax assessment. This process will be different from county to county. You will need to prove that your home has a lower value than what it was assessed at, either because of size or condition.

While every NJ homeowner is eligible for the appeals process, the following property tax relief programs require the homeowner to meet specific prerequisites.

1. Basic Homestead Rebate or Credit

If you make less than $250,000 a year, you might be entitled to a rebate or credit. This return is based on the first $10,000 in property taxes paid the previous year. The percentage of your property tax you are entitled to receive back in a credit or rebate depends on your annual income. The lower your income, the higher your percentage.

2. Senior Benefits

If you are 65 or older, you could qualify for an additional rebate or credit under the homestead rebate. This would again depend on your annual income. Additional tax benefits are available if you are a senior receiving Social Security, if you have lived in NJ for 10+ years, if you have lived in your current home for 3+ years, if you have been consistent with paying your property taxes, and if you meet specific income limitations.

3. Blind or Disabled People

NJ homeowners who are blind or otherwise disabled can qualify for similar benefits available to seniors. In NJ, you have to prove you are “permanently and totally disabled,” meaning that your disability is not temporary and you can prove a significant, determinable physical or mental impairment.

4. Veterans Benefits

In New Jersey, the home of a totally disabled veteran is exempt from property tax. A veteran who actively served in a time of war is eligible for a tax credit of $250. The spouse of a veteran is also eligible for these benefits. This November, NJ voters may decide on a bill that would extend this $250 credit to all NJ veterans, regardless of whether or not they served in active duty.

If you think you qualify for any of these or other tax breaks in NJ, it can be worthwhile to consider seeking legal help to reduce your NJ property tax. Veitengruber Law can help you work through the sometimes complicated appeals process to lower your annual property tax bill.

8 Easy Updates that will Help Your NJ Home Sell Faster

When you take on the huge task of selling a home, it is easy to become overwhelmed with all of the necessary home improvement projects. The good news is you might not need to do a ton of big projects in order to make your home more appealing. If you know for a fact that your property doesn’t need any major repairs, you can focus on budget friendly, time saving, smaller updates in key areas. Here are eight ways to wow potential buyers for under $500.

1. Depersonalize Your Home

Potential buyers like to be able to envision themselves in any house they are viewing. This can be difficult with your family photos everywhere. Depersonalizing your space can help interested buyers see themselves making your house into a home of their own. You can depersonalize your space by removing photos, handmade art or gifts, sports memorabilia, and awards or certificates. Keep personal toiletries out of sight and clear bedside tables of everything but a lamp or a clock. You want your home to look warm and inviting without reminding potential buyers that someone else lives there.

2. Declutter Closets and Storage Spaces

Storage space is one of the big things people look for when viewing a house. If your home is lacking in storage space, you don’t have to build more closets to catch your buyer’s eye. Simply emptying your closets of half the contents can make them appear bigger. You can store clothing out of site or donate what you don’t use anymore. TIP: move the top clothing rail up and add a bottom rail for pants or skirts. This creates an illusion of more space and adds functionality. Also declutter your pantry, crawlspace, and attic to maximize the appearance of your home’s storage spaces.

3. Update Hardware

Old faucets and cabinet hardware can really date a home. It’s inexpensive and pretty easy to update these fixtures to create the appearance of an updated home. If your bathroom and kitchen faucets are more than a few years old, it is likely time for an update. Replace the cabinet hardware with matching, updated versions as well. This is a relatively cheap fix that won’t take you a lot of time but will mean a lot to potential buyers.

4. Update Light Fixtures

Like other fixtures, old lighting can really date a home. Light is a big part of creating an inviting ambiance to entice buyers. If your light fixtures are dented, faded, or scratched, it can make your house feel dingy. Update light fixtures with inexpensive and neutral choices. This can easily modernize your home and give the impression that the home is new and well-cared for. Opt for brighter bulbs to light up darker areas of the house.

5. Match Appliance Panels

Kitchens sell homes. As the heart of the home and the central hub of household activity, it’s crucial for potential buyers to see themselves eating and entertaining in the kitchen area. It might not be financially feasible or time efficient for a full kitchen remodel, but sometimes simple changes can go a long way. Changing out appliance panels so they match can give the kitchen an updated look. Stainless steel panels for your fridge or dishwasher can give your kitchen a modern and appealing appearance.

6. Deep Clean Carpets and Floors

Stained or musty carpet can be a major turnoff to potential buyers. If these issues exist in your home, consider having your carpets professionally cleaned. If your carpets are beyond repair, you may be able to save money on replacing them buy purchasing carpet remnants in the dimensions you need. Wood floors are currently a huge selling point, so if you have them – flaunt them. Hardwood floor cleaner can make sure wood floors are shiny and a wood stain marker can improve the appearance of scratches or stains.

7. New Paint

Fresh paint can vastly improve the appearance of your home. Paint can cover stains, minor scratches, and wall repairs. It’s an inexpensive way to give a few rooms an update. When choosing paint colors, stick to warm neutrals in modern shades like earthy grey or a soft tan. Before you paint, take the time to fill in any holes from hanging wall décor that were removed.

8. Curb Appeal

Adding some greenery to your front yard can create an enticing curb appeal to get buyers interested in what’s inside. Plant some colorful flowers, trim any existing bushes, and keep up on mowing the lawn. Choose vegetation that is local to your area and will require minimum upkeep. If you don’t have a walkway, create a defined path to the front door from the driveway or sidewalk with inexpensive solar lights.

 

Financing a Home as a Single Parent: What are my Options?

home ownership

Being a single parent isn’t easy. There are many unique financial challenges single moms and dads face as a one income household. For many single parents, buying a home can truly seem like an impossibility. But don’t give up on your dream of homeownership just yet. There are plenty of loan and assistance programs single parents can take advantage of, you just need to know where to look. In New Jersey, there are many state and federal assistance programs for home buyers with specific circumstances. While none of these categories explicitly list “single parents,” they can be a great benefit for those looking to buy a home with one income.

HUD 

One of the best places for single parents to start their home search is the U.S. Department of Housing and Urban Development (HUD). Contacting your local New Jersey HUD office can give you access to resources that will help you find housing options as well as demystify the home-buying process. A HUD housing counselor can fill you in on local home buying programs you might not be aware of or help you obtain a loan. Some single parents may also qualify for subsidies and extra assistance that will help you afford decent housing (depending on your income and employment).

FHA

Federal Housing Administration (FHA) loans are popular for many first time home-buyers, including singles on their own as well as single parents. FHA loans are government insured and easier to qualify for than other similar loans. There are many benefits associated with FHA loans that make them appealing to single parents, including a 3.5% down payment, lower credit score minimums, and low monthly mortgage insurance rates. FHA loans are also flexible about how a first-time homebuyer is defined. If you are recently divorced or become a displaced homemaker, you can qualify as a first-time homebuyer as long as the only residence you’ve ever owned was with a former spouse.

VA

Veteran Affairs (VA) loans are also an excellent resource for single parents. If you are a single service member, a veteran, or the surviving spouse of a veteran, you could be eligible for VA loan programs. There are a number of benefits for qualified buyers, including waived down payments and mortgage insurance, low-interest rates, and on-going support throughout home ownership. If you are facing foreclosure, the VA can step in to help you keep your home or find a new residence. In the event of a work-related disability, there may be additional Veteran’s benefits you can take advantage of.

USDA

The United States Department of Agriculture (USDA) offers a few different programs for low- and moderate-income home buyers in rural areas. Even if you aren’t sure that you live in a “rural” area, the USDA’s programs are still worth looking into. Many of the regions where programs are offered are located just outside major cities. USDA loan programs offer low interest rates and zero down payment options. Qualified borrowers can get 100% financing and the mortgage insurance premium is one of the lowest offered in any program. USDA loans do have an income maximum, but most single parents do not meet this maximum.

Private Lenders

Some private lenders will offer loan programs for single income borrowers. These custom loan programs can cater terms to your specific needs to help ensure that loan applicants get pre-approved for a mortgage. These custom loan programs can include help with your credit score or assistance with your down payment, among other things. While not all lenders will offer these kinds of programs for single parents, it is worth looking into as you begin your home search.

 

As a single parent, you aren’t limited to these programs. Your county, city, or even township might offer their own programs to help the single parent home buyer. Don’t lose hope in your dreams of owning a home. If you would like help getting started or with the application process, Veitengruber Law is more than happy to help you get on the path to home ownership!

 

 

 

 

 

 

 

You’re Ready to Move in New Jersey – But is Your Dream Home Move-in Ready?

When you’re buying a house, unless you’re into flipping investments or you crave big DIY and home renovation projects, you probably just want to unpack all your boxes and start enjoying your new “home sweet home.” But before asking your real estate agent to show you “move-in ready” properties, you should be aware of what that phrase actually means.

It turns out that, like beauty, “move-in ready” is in the eye of the beholder. To you, it might mean everything not only works, but it also matches your style, right down to the door knobs and paint colors. To a lawyer using Black’s Law Dictionary, though, it simply means that the municipality has approved the property as a place approved for people to live – the plumbing and electricity are up to code, the windows and doors lock, and no pesky pests are creeping around within. And yet, to the seller, it could mean the kitchen was recently remodeled – but there’s only one tiny bathroom, and the living room still sports ‘70s orange shag carpeting in passably good condition.

So rather than get tangled in terminology, here are five things to keep in mind when you’re doing a walk-through on that “move-in ready” property.

  1. Start at the Bottom: Flooring
    You may have opinions on whether you prefer carpet or hardwood, but regardless of what is on the floor, make sure it’s a solid base for your new home. That means no peeling tiles, no ripped or odorous carpeting, and no ominous creaks. And here’s an insider tip – bring a marble to place on the floors along your tour. If it rolls a lot, the floors may be uneven, indicating potential issues with settling or even the actual foundation.
  2. Plumb the Depths: Kitchens and Bathrooms
    Though a stainless-steel refrigerator, granite countertops, and a double vanity may be high on your “must-have” wish list, what makes a house move-in ready is ovens and dishwashers that work and toilets that flush. Make sure the faucets don’t leak and the water pressure is good. Ask about the capacity and age of the water heater and any pumps to be sure they can handle your family’s needs. (Most water heaters should last eight to 12 years.) Poke around the cabinets to see – and smell – that there’s no water damage or mold hidden among the pipes, and that nothing is rusted. Taste the water – if you move in, you’re going to be drinking it for a long time!
  3. Don’t Be Shocked: Electric
    Check the wiring to be sure your hot property isn’t a fire hazard. Confirm with the seller’s agent that everything associated with the electrical current is indeed current and meets the local codes. There should be no archaic knob-and-tube wiring in the walls, the breaker box should be powerful enough to handle the load, and the outlets and switches should all work without any issues.
  4. Take Comfort: Heating and Cooling
    Pause during your house tour, and just breathe. Are you too warm? Too cold? Or, like Baby Bear, do you feel “just right?” Ensure that there’s proper insulation in the attic and around the heating ducts and water pipes. Find out how old the furnace and HVAC systems are, too; their average lifespan is about 15 years.
    Make sure the windows open and close easily, and whenever possible, look for double-paned windows for the double benefit of protection from both temperature and noise.
  1. Think Outside the House: Roofing and Siding
    Don’t go through the roof – figuratively or literally. Find out how old the roof is; a roof typically lasts about 20 to 30 years depending on what it’s made of and what climate it has faced. Do at least a visual check for leaks, loose or missing shingles, or areas where the structure might be sinking a bit. Similarly, examine the siding and window frames for discoloration or warping that could indicate not simply water damage, but also underlying mold and other costly concerns.

 

You should always engage the services of an experienced home inspector to thoroughly examine these and other elements of the property to be sure your dream home doesn’t turn into a nightmare. And whether your house hunt takes you to New Jersey’s friendly southwestern suburbs, its gorgeous northern mountains, the bustling outskirts of New York City, or those sunny beaches down the shore, Veitengruber Law can help with title searches, title insurance, and due diligence to help you turn that “move-in ready” house tour into a “we’re really moving!” experience.

 

How Much House Can You Afford in the NJ Real Estate Market?

NJ real estate

As a prospective first time home owner, it can be easy to get caught up in the dream of finding the perfect house without adequately taking your finances into account. In the rush of excitement, things like down payments, property taxes, and closing fees can be pushed to the back of your mind. You might find yourself in love with a property only to realize it is way out of your budget when the final numbers are laid out. When you first start the home buying process, it can be hard to know how much house you can actually afford. Before you jump into looking at houses, it is important to determine a realistic real estate budget. If you are looking own NJ real estate, here are some tips:

Know your take home pay.

Before you can start browsing property listings, you’ll need to become uber familiar with your current financial situation. Determining your take-home pay is a great first step to figuring out how much house you can afford. Your take-home pay is how much money you bring home in a month once taxes and other contributions are taken out of your paycheck. Unless you have a hefty savings that can cover the full price of a house, this monthly take-home pay is the money you will be using to cover your monthly mortgage payments on the loan you will take out to purchase the house.

Determine the length of your loan.

When it comes to a real estate loan, there are three major aspects to consider: the term, the interest rate, and the principal. The term of the loan is how long it will take for you to pay back the loan in full, including interest. The average mortgage term in NJ is 30 years.  Every home loan will come with interest. Interest is the amount that is in addition to the principal amount you will pay back to your lender. Mortgages have compound interest, meaning the interest is calculated monthly based on the overall debt you owe that month. You will be able to pay less in interest if you can afford higher monthly payments over a shorter period of time.

Decide on “fixed rate” or “adjustable rate.”

The amount of interest that will accrue on your loan will depend on whether you have a fixed rate mortgage or an adjustable rate mortgage. A fixed-rate loan has a locked interest rate. If it starts out at 4.2% it will always be 4.2%. This is typically the better option, especially if you can lock in a low interest rate, because your monthly payment will never change. With an adjustable mortgage, your interest rate will change with the fluctuations of the real estate market. This means you could end up with a very high interest rate over time.


Your total monthly loan payment is the biggest determining factor in determining how much house you can afford.


Allocate funds for an adequate down payment.

Most real estate experts suggest allocating no more than 25% of your take-home pay on housing expenses. If you can keep your housing expenses to less than 25% of your take-home pay, you should be able to manage the rest of your monthly living expenses comfortably. The size of your down payment can make your monthly more affordable. The more money you put down, the less money you will have to borrow (and repay.) It is generally suggested to put down at least 10-20% of the purchase price of the home. If you can afford a 20% down payment, you will not have to pay for private mortgage insurance (PMI), which can result in big savings on your monthly loan payment.

Of course, the money you borrow from a lender isn’t the only thing to consider when buying a home. You must also remember to calculate and prepare for:

  • Property taxes
  • Homeowners insurance
  • Closing costs
  • Renovations (if applicable)

All of these things will have an impact on your monthly costs for housing and your ability to afford a particular property. Buying a house is a major financial investment. Thankfully, there are plenty of online tools to help simplify the process for you. SmartAsset.com offers a free mortgage calculating tool that includes the home insurance and taxes you can expect to pay as a home owner in New Jersey.

Becoming a homeowner is a cause for celebration, but the process itself can also be very stressful. Veitengruber Law is a full service real estate law firm in NJ. We can help you through all of the financial aspects of the real estate process so you can focus on the excitement of your new home.

Mortgage Relief Scams: What You Need to Know

mortgage scam

If you’re in over your head on your mortgage, you may be starting to feel desperate. In these difficult times, it can be easy to see a mortgage relief scam as a lifeline to financial stability. By the time people realize the phony promises and baggage attached to these scams, it can be too late. The best way to avoid mortgage relief scams is to be informed of your rights and what warning signs to look for in a potential scam. Even if an offer looks legitimate, here are some basic precautions you can use to protect yourself against fraud.

The most important thing you can do is understand your rights as a homeowner. In 2010, the Federal Trade Commission published the Mortgage Assistance Relief Services (MARS) rule in order to protect homeowners from mortgage relief scams. This rule holds companies promising mortgage assistance accountable by prohibiting them from collecting any fees until after fulfilling their promises. This means that even if you agree to accept help from one of these companies, you don’t have to pay any money at all until you have received and accepted a written mortgage relief offer from your lender. The MARS rule also bars these companies from saying they work for the government or your lender and requires them to warn you that your lender may not agree to modify the loan.

When trying to spot a scam, a good rule of thumb is that any organization that tries to charge you a fee for mortgage counseling or loan modification is not legitimate. Other than accredited attorneys, the programs that can help struggling homeowners are almost always free. If a company asks you to pay up front or with a cashier’s check/wire transfer, it’s most likely a scam. Other red flags: if they guarantee results, pressure you to “sign now,” or attempt to cut you off from contacting your mortgage lender.

Here are some precautions you can take as a homeowner to protect yourself from mortgage relief scams:

1. Do your research.

Check to see if the establishment has a website and verify that the contact information listed matches the information you have. Make sure the business address is legitimate, and not just a P.O. box. The Better Business Bureau can also provide helpful information; more specifically if the company is associated with any known scams. Do not provide any personal information until you have taken the time to do ample research.

2. Don’t sign without reading the fine print.

Be careful what you sign. Make sure you have read the document thoroughly and understand it completely before you put pen to paper. It is very important for you to understand what you are agreeing to when you sign a document. If you are in doubt about anything, recruit the help of a lawyer to look over the document and explain to you in plain language what the agreement will be.

3. Keep up with mortgage payments.

Some scams advise homeowners to stop making regular payments on their mortgage while they “negotiate” with your lender. Never do this. Missing monthly mortgage payments can increase your risk of foreclosure and damage your credit, putting you into a deeper financial hole. It is also important to note that you should never be sending your mortgage payments to anyone other than your lender unless your lender has directly told you, in writing, to do so.

4. Never sign over your deed.

Under no circumstances should a mortgage relief company ask you to sign over your deed to a third party. There are two times you can sign your deed over: when you sell the home or if you sign it over to your lender in order to fulfill a debt forgiveness agreement. Signing your deed over to a third party will not save your home.

If you do find yourself the victim of one of these scams, the best thing you can do is to report it. This will give you the best chance of recovering some of your money, although the process may be lengthy. You can file reports through the FTC, the Better Business Bureau, the Consumer Finance Protection Bureau, or through an attorney.

Most people fall for mortgage relief scams looking for a quick way to get out of a financial jam, but getting on top of debt takes time and commitment to financial responsibility. If you find yourself in trouble with your mortgage, the best thing you can do is work with your lender to come to an agreement on the situation. Going to your lender directly can be intimidating. Veitengruber Law is here to help. Our experienced NJ real estate legal team can work with you to determine real debt relief solutions for your specific situation.

Bidding on a NJ Foreclosure Property: The Lowdown

NJ foreclosure

Buying a home at a NJ foreclosure sale (or sheriff’s sale, as they are commonly called) can be a fantastic way to score a property at below-market price. While there are some risks and pitfalls to be aware of when bidding at a foreclosure auction, if you’re well-informed, you’ll likely come out of the process happy and (hopefully) successful!

Naturally, the most obvious advantage of purchasing a home via sheriff’s sale is the low price you’re likely to pay. Foreclosure sales are a great way to gain ownership of a rental property or a home you intend to “flip.” Homes that are being auctioned at a New Jersey foreclosure sale have been through the judicial foreclosure process that our state requires, and the lender has been permitted by the court to move forward with selling via auction.

How can I find out about upcoming NJ foreclosure sales?

This is one of the best parts about buying a foreclosed property in New Jersey. Sheriff’s sales are required to be advertised for a minimum of 30 days. You can find listings of upcoming sheriff’s sales in local newspapers for each county. Many jurisdictions also have sheriff’s sale listings online on their county court website.

How does a sheriff’s sale work?

In New Jersey, foreclosure auctions are controlled or led by the sheriff’s department of the property’s county. All local county rules must be followed, however, there are several general rules that are consistent across all counties, according to NJ law.

  1. NJ foreclosure properties up for sale must be sold subject to the first mortgage held on the property. This information can usually be found within the property’s first lien.
  2. Any NJ foreclosure sale will also be subject to any/all local state or federal liens on the property.

Because of the above information, all bidders at NJ sheriff’s sales would be remiss to fail to run a complete title search on the property in question before even considering bidding. Failure to do so could land you with a property that is deeply encumbered by multiple liens, for which you will be 100% responsible.

In New Jersey, foreclosure sales usually start with the lender being given an opportunity to open the bidding. Most lenders will start with a $100 bid. Bidding on the property continues via voice auction between all of the interested parties present at the auction.

The usual course of a NJ sheriff’s sale/auction continues with bidding the price of the property higher and higher until a highest bidder remains. If you are the lucky bidder, you will be required to pay a 20% deposit of your bid price.

Upon conclusion of the bidding, the sale is considered to have ended. However, the end of the sale triggers what is known as the Redemption Period. This is a ten day period during which the original owner (who was foreclosed upon) is allowed to “redeem” the property. This can only be done if the original owner can completely pay off the foreclosure judgement amount, including any additional fees and costs (and potential liens).

At the end of the Redemption Period, if the original homeowner does not choose to redeem the home, you will be given a sheriff’s sale deed. When you receive this deed, it is expected that you will make full payment of the balance of your successful auction bid. You’ll also have to handle any fines that accrued relating to the property, after which you will be able to officially transfer the title from the former owner to yourself!