More than 40,000 New Jersey residents a year have had banks foreclose on their homes in recent times. Foreclosures have a negative effect on communities. They force families out of their homes and can lead to neighborhoods filled with abandoned houses, which may attract criminal activity. To deal with the ever-growing number of New Jersey residents facing foreclosure, New Jersey became the first state in the country to institute a foreclosure mediation program back in January 2009.
When a bank starts the foreclosure process and the homeowner contests the foreclosure, New Jersey law now requires mediation in the hopes that the bank and homeowner might be able to reach an agreement. Mediation involves a neutral third party who will attempt to negotiate an agreement between the homeowner and his or bank to let the homeowner stay in the house under a revised repayment plan. If you are facing home foreclosure and would like to learn more about your options, a Morris County bankruptcy lawyer can guide you through New Jersey’s recent changes in the law.
New Jersey’s Foreclosure Mediation Program
New Jersey’s foreclosure mediation program provides several valuable assets to homeowners facing foreclosure:
- Homeowners can consult with federally certified housing counselors for free
- The program maintains a website and hotline that homeowners can call to learn where they can find legal or financial services available for low income residents
- Homeowners can take advantage of free mediators who will attempt to negotiate a solution between the borrower and his or her bank
There are three criteria to be eligible for the program’s free mediation:
- The property must be a one to three family residential property
- The property must be the owner’s primary residence
- The owner must be the one who borrowed money to finance the home’s purchase
- In the past, borrowers who filed for bankruptcy were not able to participate in the foreclosure mediation program, but the federal bankruptcy court no longer maintains this restriction
Mediators will listen to both sides and attempt to guide them towards a solution that avoids foreclosure. The result of the mediation, however, is not binding, and mediators cannot give legal or financial advice. By taking advantage of the resources that the program offers and working with an experienced attorney, homeowners have more leverage in dealing with their banks and reaching a solution. Contact a Morris County bankruptcy attorney at Ast & Schmidt, PC to learn more about New Jersey’s foreclosure mediation program.