7 Reasons Why NJ Real Estate Experts Advise to Avoid Foreclosure

A deeper look into the foreclosure process and why top NJ real estate agents think it is important to not default on your home loan

 

Foreclosure is the legal and professional process in which a mortgagee, or lien holder, obtains a court ordered termination of a mortgagor's equitable right of redemption. The lender, typically a bank, collects security interest from the borrower who mortgages the home to secure the loan. In the event the borrower defaults, the lender will take actions to repossess the property. Equity courts have the power to award the borrower the equitable right of redemption upon repayment of the debt. Also, other lien holders can foreclose the owner's right of redemption for other debts such as overdue taxes, assessments, or homeowners’ association dues and delinquent contractors' bills.

The number of real estate foreclosures was increasing daily in this country, according to NJ real estate experts. An estimated 4%, or 4.8 million of 120+ million homes, faced the possibility of foreclosure. While some of these homeowners have the ability to avoid foreclosure, approximately 500,000 homes went through the process in the last year. Foreclosure procedures usually begin with a formal demand for payment, typically a letter issued from the lender referred to as a Notice of Default. The lender will issue this notice when the homeowner has been delinquent on the mortgage payments for a long period of time. NJ real estate agents advise clients that it is important to remember that this notice is an effort to cease all rights to the property, sell it, and evict the homeowner. Delinquency can stem from several things such as a divorce or separation, job loss or mandatory job relocation, death of spouse or family member, property damage, business failure, severe illness or medical bill expenses, military service, incarceration, mortgage adjustment, and real estate tax or insurance increase.

The following is a list of reasons why NJ real estate agents say a homeowner should want to avoid foreclosure on their home:

  • A foreclosure is the only item on a credit report that is almost impossible to have repaired, claim experts in the field of NJ real estate.
  • The lender can seek a deficiency judgment against the homeowner and collect for the amount not recuperated at a bank sale.
  • The homeowner will always have to disclose foreclosure(s) on any future mortgage application as well as certain job applications. This can also negatively impact mortgage rates offered to the applicant in the future, according to NJ real estate agents.
  • The homeowner may be responsible for any deficiencies post-foreclosure for an indefinite period of time depending on their state of residence. An effect of this is always being in collections.
  • A number of employers run credit checks on prospective employees and foreclosure is one of the top threats to job applicants.
  • Some current employers run periodic credit checks and foreclosure can jeopardize a current position.
  • Credit scores will be impacted by 300+ points with a foreclosure being the most detrimental issue the homeowner could have in reference to credit availability in the future.

 

The real estate market is changing rapidly and expanding into new avenues almost daily. Sometimes it can be very difficult to find the answers you need on a specific topic or issue. In times like these, you need a real estate professional who will provide valuable information and trustworthy advice. For more information on NJ real estate or foreclosures, call us today or click here to be connected with one of our top real estate specialists.