Many New Jersey families are struggling to meet their monthly mortgage payments and reports indicate that New Jersey currently ranks 11th in the nation for foreclosure filings. Prolonged unemployment and other financial pressures are forcing many Garden State residents to take a close look at the balance of their mortgage and the value in their homes. These families are finding that they may owe more than their home is currently worth.
The challenge is compounded for homeowners who can neither pay the mortgage nor reap enough profit from the sale of a home to pay off the balance of their mortgage.
Until the state and national economies rebound, as surely they will, the forecast for foreclosures remains grim. But, by recognizing the difficulties that a homeowner faces and taking quick action, solutions can be found. Help is available and making a call is the first step toward recovery.
New Jersey’s roughly 48,000 REALTORS® are among the resources available for those in danger of, or currently experiencing mortgage payment difficulties. As experts in the housing market, REALTORS® can help homeowners determine the current value of their home and identify the programs that might be available to improve their situation.
Missing mortgage payments should be a signal that it is time to move quickly to get help to avoid losing a home.
Contact the lender. Contacting the lender should be the first step. Lenders may be able to modify the loan or offer an opportunity for a homeowner to refinance under new conditions. Being prepared for this call with all documentation is important.
Call a certified counselor. The foreclosure process involves numerous stages and notifications and can be avoided if it is early enough in the process. If the lender cannot make any adjustments to the mortgage payment, there may be some adjustments that homeowners can make personally to improve their financial situation. Housing counselors certified by the U.S. Department of Housing and Urban Development (HUD) can offer free advice to homeowners.
Consider HARP or HAMP. The federal Making Home Affordable Program offers two options that can help homeowners facing financial difficulty. The Home Affordable Refinance Program (HARP) and Home Affordable Modification Program (HAMP) are each designed to evaluate a current loan agreement and optimize the terms to make payments easier to afford. HARP is designed for residents who are current on their mortgages; HAMP is for those who are in default, or behind on their mortgage payments. In both cases, lenders are encouraged to extend the life of the loan from 30 to 40 years, or decrease the interest rate, among other options, to lower monthly payments. More information is available on www.makinghomeaffordable.gov.
Mediation. The New Jersey judiciary has begun a program to assist homeowners if foreclosure proceedings have already begun. Assistance is available in the form of free housing counselors to review financial status, attorneys who can help review legal documentation and negotiate, and neutral mediators to help homeowners and lenders find agreeable solutions to mortgage difficulty. Visit www.NJForeclosureMediation.org or call 1-888-989-5277.
Dial 2-1-1 or access www.nj211.org. This partnership between non-profit organizations and the State of New Jersey offers information on housing assistance, support for paying utilities and other helpful community programs to help homeowners avoid foreclosure.
A short sale may be a viable option. Another option in avoiding foreclosure is to consider a “short sale.” A short sale is a transaction in which the home is sold for less than the amount required to pay off the liens on the property. Short sales can help homeowners recover some home value and preserve some of their credit. However, these transactions can be complicated. It is recommended that homeowners contact a knowledgeable REALTOR® to help navigate a short sale transaction and market the property to potential buyers.
Be careful. Consumers should only deal with certified counselors, legitimate government entities or REALTORS® who are knowledgeable in addressing financial difficulties. Financial problems can be overcome, but reaching that goal will only happen in partnership with professionals. When researching a company from which to seek assistance, make sure the counselor and/or agency is certified by HUD. The HUD website, www.hud.gov, includes a list of federally approved agencies. A reputable company will not charge you for service.
Additional resources can be found on the New Jersey Association of REALTORS®’ consumer website, www.REALstoryNJ.com. Information will also be available on an upcoming webinar, or web-based seminar, on the site where members of the public can hear from certified government and nonprofit agencies that specialize in helping financially distressed residents to stay afloat.
New Jersey homeowners are also encouraged to visit www.REALstoryNJ.com/realtor_search to find a local REALTOR® who can help address any questions or concerns regarding retaining their home.
New Jersey Association of REALTORS®
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