Essex County Bankruptcy Law Blog

While foreclosure rates are below what they were a year ago and have gone up just a bit from February to March, foreclosure is still a looming concern for many New Jersey homeowners. In March, there were 69,000 homes foreclosed upon in the United States -- 3,000 more than in February. And even still, there are plenty of homeowners who are behind on their mortgage payments and on the edge of foreclosure. Homeowners in trouble on the mortgages do, though, have the opportunity to stop foreclosure.

It can be a very complicated process, searching for ways to fight back when foreclosure is on the edge of the horizon for a homeowner. While there are some government programs that are helpful for many homeowners, not all homeowners qualify for the government programs. This leaves many in a rut with seemingly no way to get out.

When one thinks of foreclosures, the growing debt in the housing market is the first thing that typically comes to mind. While these foreclosures are hitting the highest numbers, foreclosures of non-residential properties are at an increase since the beginning of the Great Recession in 2007. This is a serious concern for businesses, as the still-struggling economy leads to a decrease in business and an increase in debt accumulation. For New Jersey, in fact, commercial property foreclosures carry the most pronounced increase in foreclosures in the state.

In the economic downturn in 2009 alone, the state saw a total of 3,827 foreclosure filings for non-residential properties. In 2011, these filings reached 5,027. While this year is still underway, it appears that the trend will continue to surge. As a result, there's been a scaling back of commercial projects, with many turning toward non-retail outlets such as businesses focused on health and wellness.

There was once a time when New Jersey residents, and people all across America, would put paying off home loans as a priority in their debt management. In fact, out of the three most typical types of loan payments -- car loans, credit cards and mortgage loans -- American's are placing more priority on car loans than anything else. While these loans are certainly important, disregard for other payments may lead to worse debt hardships that sometime require bankruptcy protection to solve.

A recent TransUnion study examined the patterns among four million people who held at least one credit card payment, one car loan and a home mortgage. Out of those who made late payments last year, 39 percent were late on mortgages and 17 percent were late on credit card payments, while both groups were consistently on time with their car loan payments. Only 10 percent were late on their car loan while being up to date on the other two loans.

Knowing that you have debt hanging over you that puts you in danger of bankruptcy or foreclosure is a stressful and difficult enough process on its own for New Jersey families. This situation is made even more troubling when your home is improperly foreclosed upon for outstanding debt through faulty paperwork or other lender negligence. With so many recent incidents of improper foreclosure actions by lenders and servicing companies, the Federal Reserve says it plans to fine an additional eight banks that were not part of the massive $25 billion settlement already agreed to by the country's five largest lenders.

As a part of that significant settlement, the five banks who were parties to the agreement committed to reducing mortgages for about one million homeowners. They also agreed to deposit settlement money into a fund that will provide $2,000 to $750,000 to homeowners who already lost their homes due to improper foreclosure practices.