Help with Foreclosures and Their Alternatives in Northern and Central New Jersey

People hear the word “foreclosure” and immediately see images of an evil, mustachioed landowner in a black cape and hat throwing impoverished tenants out of the homes he rents them and into the snow. The reality, while not pleasant, is hardly that grim or melodramatic. But the fear people have – especially those falling ever more deeply in debt and ever more behind in their mortgage payments – is certainly understandable: Without proper legal help, they could lose their homes. Fortunately for anyone living in Northern and Central New Jersey, the best kind of legal help with foreclosures is that provided by Mitchell Law Offices.

Bankruptcy Attorney Douglas Mitchell has been helping people in this neck of the woods deal with foreclosures for some time now. And the first thing he does is explain to his clients just what a foreclosure is – and how it can actually help them out of a dire financial situation.

At its essence, a foreclosure is the legal process by which a lender can sell a borrower’s home and use the proceeds to repay the loan when the borrower is unable to do so.

How Do Foreclosures Work?

People find themselves facing foreclosure for various reasons, but typically this process comes on the heels of a major change in the borrower’s financial circumstances. The borrower may, for instance, have lost his or her job, suffered a debilitating injury or disease, gone through an expensive divorce, or simply gotten careless and amassed an overwhelming amount of credit card debt.

Whatever the reason, foreclosures are often initiated when the borrower stops making payments on time. After a period of late payments, the loan is declared delinquent and the borrower is said to have gone into default. The lender will contact the borrower to determine whether the borrower will be able to pay off the balance of the loan or not. This is the borrower’s opportunity to request a repayment plan or a forbearance agreement if his or her financial difficulties are only temporary.

If, however, the borrower’s financial difficulties are more long-term and he or she can neither fulfill a repayment plan nor meet the terms of a forbearance agreement, the lender will typically file a notice of foreclosure. Such filing formally begins the legal process. This process usually takes several months to complete. If the borrower wants to challenge the foreclosure, he or she may do so by filing a response in court. Attorney Douglas Mitchell can help with this.

Can Foreclosures Relieve You of Debt?

Foreclosures address unpaid mortgage loans only. If you have other debts as well that made it difficult for you to pay your mortgage, a foreclosure may relieve just a portion of your financial burdens. Obviously, it’s best to come up with a comprehensive plan that deals with all of your debt, and this is where Attorney Douglas Mitchell can be of exceptional help. He can not only explain your options but see to it that the best option is put to work on your behalf.

Forbearance Agreements as an Alternative to Foreclosure

Forbearance means to have patience or show restraint. And that’s basically what a forbearance agreement entails in the context of a home mortgage, given that it delays foreclosure.

Your lender agrees to reduce or suspend mortgage payments for a specified period of time and not to initiate a foreclosure during that time. To get this temporary relief, your lender will generally request that you return to making full payments at the end of the forbearance period. Your lender may require you to cover missed payments as well by paying additional amounts once the forbearance period is over. The terms of a forbearance agreement vary widely, and Attorney Douglas Mitchell can assist you in obtaining a forbearance agreement that best suits your financial situation.

If your finances do not improve as planned, you may seek a modification or extension of the forbearance agreement. In this, too, Douglas Mitchell has the skill and experience to renegotiate an agreement with your lender that extends or modifies your forbearance.

Repayment Plans: Another Possible Alternative to Foreclosure

Repayment plans, unlike forbearance agreements, set up an immediate schedule of payments over time to make up for any mortgage payments you missed.

If you’re behind on your mortgage payments due to a temporary financial hardship, a repayment plan provides a way to catch up once your finances are back in order.

Here’s how a repayment plan generally works:

  • Your lender spreads your overdue amount over a fixed number of weeks or months, the specific time period of which can be negotiated.
  • The overdue amount is often added to each of your regular mortgage payments.
  • Once the missed payments are brought current, your regular mortgage payments resume and you begin paying your normal monthly payment amount again.

For help in handling foreclosure or determining what options you might have to it, do what so many in Northern and Central New Jersey have done before you: contact Mitchell Law Offices.