Foreclosure Defense & Loan Modification Attorney
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Haghi Law LLC is focused on helping NJ homeowners through Loan Modification and Foreclosure Defense.
Don't fight the bank alone. If you need help with a loan modification or other foreclosure defense strategy, give us a call to learn more about how we can help you.
Foreclosure defense greatly improves the outcome of a foreclosure matter. Most people facing foreclosure are not aware of the benefits of foreclosure defense, and as a result, the vast majority of New Jersey foreclosures proceed quickly as uncontested matters.
We can help you defend against foreclosure, keep your home, and reduce your loan payments though a loan modification or other means. We have helped many homeowners and secured excellent loan modifications from dozens of banks and mortgage lenders.
We have prior experience representing banks and in the courts, and we put that experience to work for our clients, to stop the banks from forcing through a foreclosure and to obtain the best possible settlements.
Read below to learn about the foreclosure process so that you can better understand your options and mount an effective defense.
New Jersey Foreclosure Process: Background Info
New Jersey is a judicial foreclosure state, meaning the bank has to go to court to try to take your home. New Jersey is also one of only two states that has a separate Chancery Court intended to handle suits which seek equitable relief, such as foreclosure.
Equitable relief is distinct from monetary relief. A foreclosure in New Jersey is brought in the Chancery Court because the bank is seeking an equitable remedy - to sell the collateral property.
Foreclosure Defense Basics
Defending a foreclosure simply means asserting defenses and counterclaims against the bank, to protect the homeowner and to improve their bargaining position. This is critical if you are seeking a loan modification or other resolution.
A foreclosure is like any law suit...if you do not defend yourself, you lose.
Solutions to Foreclosure
How a foreclosure is resolved depends on the specifics of the situation. Most of the time, there needs to be a significant payment reduction in order for a homeowner to keep the property, via loan modification. The loan modification process can be quite tedious itself and we recommend reviewing our loan modification page to learn more. Loan modification is a cornerstone of our foreclosure defense, and getting a great loan modification for a homeowner is our ultimate goal for most cases.
If a homeowner does not want to ultimately keep the property, a short sale or cash-for-keys option may be the best alternative. In cases where debts are overwhelming, a bankruptcy may be appropriate. Below are some of the most common methods by which we resolve foreclosure matters:
Loan Modification: Reduce monthly payments and roll arrears into a new principal, with possible principal reduction or deferment
Short Sale: Get approved for a short sale, get your closing and legal costs covered and eliminate the foreclosure
Deed-In-Lieu (Cash for Keys): Arrange for a turnover of the property and get relocation expenses covered and cash incentives.
Bankruptcy (Ch. 7, 11, and 13): The different types of bankruptcies suit different situations. When other options fail, bankruptcy can eliminate personal liability for most of your debts, give you more time to catch up on arrears, and can even help you get a modification and reduce principal on the loan.
Foreclosure Defense Strategies
During the foreclosure process, which is outlined below, there are a number of things that can be done to defend against the foreclosure including:
1) Demand all documentation from the mortgage lender or loan servicer and review for errors.
2) Negotiation with the mortgage lender or loan servicer to correct errors. If errors are significant enough, monetary damages may be pursued against the lender.
3) Negotiation with the mortgage lender or loan servicer to restructure and reduce payments either through principal reduction, deferment, reduction of interest rate, or extension of loan term. All of these fall under the category of loan modification.
4) Fighting the foreclosure case in court. This involves answering the foreclosure complaint in a timely manner, asserting proper defenses, and putting forth any applicable counterclaims. This critical step forces the bank to go on defense and often results in a much better outcome for homeowners.
5) Participate in mediation. By fighting a foreclosure in court, a homeowner can also partake in Foreclosure Mediation, which is a process by which the court supervises negotiations and discussions between the lender and homeowner regarding resolving the dispute. Mediation is powerful because it creates oversight and accountability for the lender. They are required to make a decision based on the merits of an application and cannot use the same old excuses to avoid making a loan modification offer.
4) Filing motions where appropriate and necessary. During a foreclosure case, it may be necessary or advantageous to file motions with the court, or to defend against motions filed by the lender. By facing these motions, homeowners can continue the fight against the lender and gain valuable time and leverage.
5) In a more advanced foreclosure case where a sheriff sale (sale of the property) or eviction is imminent, foreclosure defense tactics include applying to the court to delay a sheriff sale or eviction.
The Foreclosure Process in New Jersey
The foreclosure process in New Jersey typically involves the following steps. This is just a general description and in reality, there are many more steps that occur during the process.
1. "Default" in making your loan payment - You miss making your mortgage payments, and often a notice of default is sent out by your bank or mortgage company.
2. Notice of Intent to Foreclose - a notice that the lender is required to send out pursuant to New Jersey Law. This notice must contain certain information.
3. Foreclosure Complaint is filed in court. This is a type of law suit that the lender begins after time has passed since the Notice of Intent to Foreclosure. Along with the Complaint, a Lis Pendens is filed with county clerk where the property is located.
4. The Foreclosure Complaint is Served. Generally, the bank must effectuate "personal service" of the complaint, through delivery in person to you or a household member. If the bank cannot find you, they will try to use "substitute" service, such as service through publication in a newspaper. Therefore, if you did not receive a complaint in hand, it is still possible that a complaint was filed and that the foreclosure case has already begun.
5. Once the Complaint is served on the homeowner (who is the "Defendant"), there is time allotted for to file an "Answer" in response.
6. It is important to file an Answer and obtaining counsel to represent you prior to this will help ensure that they can assist you with filing an effective Answer.
7. If no Answer is filed, Entry of Default (not the same as "Default" mentioned earlier) is made with the Court.
8. Next, a "Notice to Cure" is issued, giving time for the homeowner to cure the arrears. If no cure is made, an application for Final Judgement is made by the bank which sets the amount owed.
9. A Final Judgment application is submitted to the "Foreclosure Unit" in Trenton, which is a part of the court tasked with handling foreclosures. If the proofs submitted are sufficient, Judgment is entered in favor of the bank and a Writ of Execution Issued. The Writ is what instructs the local county sheriff to sell the property on behalf of the bank.
10. A Sheriff Sale is scheduled by the local county sheriff. Foreclosures are a source of income for the sheriff, which makes a commission from the sale.
11. Sheriff Sale occurs, with either a 3rd party purchasing the property or the your bank/mortgage company taking the property. The bank/mortgage company typically takes the house in cases where the debt owed on the mortgage is greater than the value of the house. In any case, you no longer own the home at this point.
12. Eviction. After the sheriff sale is concluded, the new owner will schedule an eviction or ejectment. When the day of eviction arrives, the sheriff will physically remove the occupants and belongings from the house.
Typical Documents Seen in a Foreclosure Case
Foreclosures involves a lot of paperwork. More so than a regular law suit, since there are regulatory requirements that banks must adhere to, and many individual steps and filings that must occur for a foreclosure to proceed correctly. Some of these documents are:
Notice of Intent to Foreclose
Motion for Default
Motion for Summary Judgment
Motion for Final Judgment
Final Judgment and Writ of Execution
Notice of Sheriff Sale
Frequently Asked Questions
What happens when a foreclosure action is properly defended?
In many instances, homeowners can keep their home, reduce their loan payments, and ultimately resolve the problem. If the bank acted wrongfully toward the homeowner, other settlements, including cash payments, are also possible. The bank will not give a homeowner anything unless they seek it, and that includes fighting back.
It is estimated that over 90% of foreclosures are not defended.
The lack of putting up an adequate defense ultimately costs homeowners dearly. By failing to defend against a foreclosure, they sacrifice the opportunity to assert their rights, defenses, and counterclaims in a court of law. They also reduce the chance of obtaining a favorable settlement whether through modification or other means since the bank is assured they will be able to easily conclude an uncontested foreclosure. Where a lender's actions have been particularly egregious, cash settlements can even be obtained, however, this is only possible if a defense is mounted.
What is the bank's favorite type of foreclosure?
Based on the above, it should be no surprise that their favorite type of foreclosure is the one that is not defended! Uncontested foreclosures are typically cheap for the bank, since they often pay for a debt-collection firm to handle the case from start to finish for a low fixed sum of money. In contrast, a contested matter is often much more costly for the bank since they have to enlist the services of more sophisticated litigation law firms to handle the case. The benefit to the homeowner is that those sophisticated firms have more access to the lenders and can be instrumental in obtaining a modification offer or other type of settlement.
Why do so many people choose not to fight against foreclosure?
Because of a lack of information and misinformation. It is important to understand the foreclosure process in the State of New Jersey to see why defending against a foreclosure action is important.
Why is fighting foreclosure important?
Fighting foreclosure is critical if you want to save your home, obtain relief through loan modification, negotiate a short sale, or simply gain time to reorganize life. While it is best to fight a foreclosure as early in the process as possible, no time is "too late".
Even if you do not want to keep your property, the help of an expert on Foreclosure protects you and enables you to benefit for all available rights and remedies. Even if you have been previously declined for a modification or other relief, help is available. It is possible to get a modification after being declined multiple times.
Can any attorney defend a foreclosure effectively?
Foreclosures are a unique field, particularly in New Jersey, where they are handled by the Chancery Division of the Court. New Jersey is one of only two states in the country which still maintains a separate Chancery Court.
Foreclosure cases follow a different procedure from most traditional law suits, therefore, experience in Foreclosure Matters is extremely important. While others may claim to have expertise in these matters, few will be able to demonstrate that they have experience in all aspects of foreclosures.
Is foreclosure defense expensive?
No. A Foreclosure is an action where a creditor is attempting to sell collateral (in most cases, a primary residence) to satisfy a debt. As with any creditor-debtor relationship, negotiation of the debt can change what the parties owe and expect to receive. Foreclosure Defense is the homeowner's tool to negotiate a better position.
Whether you are fighting illegal tactics by the bank, trying to get a loan modification, or getting the benefit of time, Foreclosure Defense is not only essential, but cost-effective.
The money spent on Foreclosure Defense could yield much lower payments on a modified loan, or months or years of additional time in your property, potentially saving a homeowner tens of thousands of dollars. Click here to learn about the cost of foreclosure defense.
What is the foreclosure process in New Jersey?
Understanding the process for a foreclosure in New Jersey is crucial to determine how we can help you. Scroll up to learn more about the foreclosure process and contact us with any questions.
Foreclosure Terms Glossary
To better understand the foreclosure process, it is important to understand the terms that are used. You may come across the following terms in paperwork you receive. We will be updating and expanding this list with definitions in the near future. If you have any question regarding these terms, please contact us.
Application for Final Judgment
Deed-in-Lieu of Foreclosure (Cash for Keys)
Loan Modification Application
Motion for Summary Judgment
Motion to Vacate
Notice of Intent to Foreclose
Notice to Cure
Notice to Produce
Objection to Final Judgment
Permanent Loan Modification Offer
Proof of Service
Qualified Written Request (QWR)
Request for Admissions
Request to Enter Default
Service of Process
Statute of Limitations
Stay of Sale
Trial Loan Modification Offer
Writ of Execution
Writ of Possession