Foreclosure Defense Litigation ( New Jersey)
Lead attorney Terrance W. Annese and The Annese Law Firm, P.C., are committed to providing aggressive advocacy for homeowners and borrowers, representing clients at all stages of the foreclosure process, including in the Chancery Division where emergency foreclosure matters are frequently heard.
Today, foreclosure defense law and procedure are changing at a rapid pace. It is important that you have competent, aggressive legal representation whether foreclosure is imminent or has been filed against you, no matter what stage of the process you are in.
Mr. Annese is committed to continuing education to stay abreast of current foreclosure defense law. He recently attended an intensive New Jersey ICLE training seminar: “Mortgage Foreclosure Litigation: What You Need To Know.”
WHAT IS FORECLOSURE LAW?
Know Your Rights:
If you are facing foreclosure, you need to know your legal rights. The lender cannot obtain possession of your home automatically even if you have late or missed mortgage payments. The lender must formally pursue a legal action against you in court and prove it has a legal basis to foreclose. You have a right to defend yourself against the foreclosure action. However, this can be a complicated process.
Years ago, most homeowners did not contest a foreclosure action. Many assumed the lender had all the rights and no contest was possible. However, by law, the lender must prove it has a legal basis to foreclose. The lender must have complied with the following laws. These laws apply beginning from their advertisement of loan products, to initiation of your loan, to requirements they must follow at all stages of proceedings against you. In some circumstances, loss of your home can be prevented – even if a foreclosure action has already been filed and no matter what stage of the process you are in.
Summary of Defenses to Foreclosure:
While not intended to provide a complete description, the following is a summary of laws intended to protect you as a borrower. They are defenses available to you in a foreclosure action.
The New Jersey Fair Foreclosure Act, N.J.S.A. 2A:50-53, et. seq.
The lender is required to serve you with a Notice of Intent to Foreclose at least thirty days before filing a Complaint. You must receive proper service of the Notice of Intent to Foreclose via registered or certified mail, return receipt requested. The lender must provide you with the name and address of the lender, as well as the name, telephone number and address where you should send your payment. This Notice must inform you specifically of the nature of the default that is the basis of the foreclosure, including the particular obligation or security interest. The lender must provide the right to cure the default and inform you of the amount you must pay to cure. To “cure” means to pay what you owe and have the mortgage reinstated. You have the right to cure your default at any stage of the process before final judgment.
New Jersey Consumer Fraud Act, N.J.S.A. 56:8-1, et . seq.
Lenders or lenders’ agents may not engage in “unconscionable” commercial practices. They are liable under this law regardless of whether a person has actually been “misled, deceived or damaged”. In other words, lawmakers passed this law as a strong public policy measure so that lenders must employ “above board” practices to advertise to borrowers. The law prohibits the following practices: deception, fraud, false pretense, false promise, misrepresentation, knowing concealment, suppression or omission of any material factwith intent that others rely upon such concealment, suppression or omission, in connection with the sale or advertisement of any merchandise or real estate …”
Some important questions help define “predatory lending practices”. Were the loan payments affordable at the time the loan was made? Did the lender or lender’s agent lie or conceal the fact that the homeowner qualified for a “fixed-rate” as opposed to an “adjustable rate” mortgage? Did the lender advertise low interest rates, then sell the borrower a loan that originates at the low rate but then adjusts to a higher rate? Was a low monthly payment loan offered that failed to cover interest on the loan, resulting in an increase of the loan’s principal balance?
The Truth in Lending Act (TILA), 15 U.S.C.A. § 1601 et. seq.
At the time your loan was made, the lender was required under this federal law to accurately disclose to you the terms of the mortgage, including accurate statements of finance charges, annual percentage rate (APR) and payment schedules. They were also required to provide a disclosure known as a “Notice of Right to Cancel”. This Notice must explain that you have a right to cancel the loan and include the time by which you must cancel and where to send the cancellation notice. This Notice must be served to anyone whose name is on the Deed, whether or not they are co-borrowers.
Fair Debt Collections Practices Act, 15 U.S.C. § 1601, et. seq.
In an attempt to collect a debt from a consumer, a collector may not make false, deceptive, or misleading representations or engage in abusive, harassing or oppressive practices. In addition, lenders must provide you with payoff and reinstatement figures or debt verification, and/or other information as requested.
Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. § 2601 et. seq.
You were entitled to facts and information important to the closing of your loan at the time it was made. Lenders may not have complied, or they may have used brokers acting as their agents who did not comply.
Standing
Do you know who owns your mortgage? Quite possibly, you don’t. Many lenders sell their loans to other companies, often “pooling” loans and selling them as investment securities. It is highly likely that the company you have been making mortgage payments to is not the company that owns your mortgage. In addition, your payments may be going to a “servicer” who acts as a debt collector. The plaintiff who filed a complaint against you for foreclosure is required to prove it owns your loan. The plaintiff must prove it is the holder of your Note. If the Mortgage was sold, the plaintiff must hold an Assignment. This seemingly small issue has been of significant importance in many cases throughout the United States.
FORECLOSURE ALTERNATIVES
New Jersey Foreclosure Mediation Program:
The New Jersey Foreclosure Mediation Program was put in place by the New Jersey Judiciary and is intended to facilitate open and fair communication between lender and borrower. Mediation allows you the opportunity to negotiate a payment plan with the lender with the assistance of a foreclosure mediator. During the mediation process, foreclosure proceedings will continue but, if mediation is successful, the parties may agree to stop the foreclosure.
Under the program, the courts requires mediation in all cases in which homeowners contest owner-occupied foreclosure actions. Volunteer mediators will meet with eligible homeowners and their lenders in an effort to resolve the foreclosure action and renegotiate the terms of mortgage agreements.
In order to be eligible for the free mediation program, homeowners cannot currently be in bankruptcy, the property in foreclosure must be the homeowner’s primary residence, and the property in question must be a one to three-family residence.
The program benefits distressed homeowners by providing them the opportunity to have a face-to-face meeting with the lender’s attorney and a neutral third party mediator to discuss their options. Communication is always an issue when dealing with banks and this is an important opportunity for a borrower to speak directly with their servicer and their lawyer about their prospects of reaching resolution.
New Jersey Supreme Court Chief Justice Stuart Rabner:
“While the courts must remain neutral in all foreclosure matters, it is in everyone’s best interest to have a forum where homeowners facing foreclosure have the opportunity to negotiate to save their homes. Our goal is to get lenders and borrowers to meet at the table and work out a mutually beneficial arrangement. I encourage continued cooperation among the courts, lenders, borrowers, and the bar as we address the increasing number of foreclosure actions in New Jersey in today’s difficult economic times.”
Middlesex Vicinage Superior Court Assignment Judge Travis L. Francis:
”The worst thing a homeowner facing a foreclosure action can do is nothing. It is critical to let homeowners know that even after a default action has been entered, there may still be a window of opportunity for borrowers and banks to work out an agreement that will avoid a sheriff’s sale.”
Loan Modification:
Whether or not a client utilizes the services of the New Jersey Foreclosure Mediation Program, the most effective way for a homeowner to resolve their delinquent mortgage obligation while ensuring long term, continued possession of their home is through a Loan Modification.
The Annese Law Firm, P.C. will investigate all possible avenues to assist troubled homeowners to potentially avoid foreclosure by working with your lender to modify your mortgage.
You should be aware that banks lend money and make their profit by collecting the interest on these loans. They do not want to be homeowners. If they foreclose, there is the real possibility that they will have to resell your home for less money than you owe. And of course, maintaining the dwelling, while it sits waiting to be resold, can be very problematic for them. This being the case, they could possibly be convinced to change certain elements of your mortgage so that you can afford the monthly payments which in turn will allow you to keep your home.
Such modifications to your loan could comprise of reductions in the interest rate, or increasing the duration of your mortgage. A good portion of our modifications are completed under a number of current Federal government foreclosure assistance programs, including the Making Home Affordable Program (also known as HAMP).
Our goal under HAMP or any other loan modification is to reduce your monthly payments and make owning your home more affordable. In some cases even the principle amount due has been reduced in order to bring the amount owed closer to the present value of the home. This whole process can be very daunting to anyone not versed in the law or not having the experience necessary to successfully negotiate a favorable loan modification.
More about the Making Home Affordable Program (clickable web link)
The Making Home Affordable Program is an essential portion of the Obama Administration’s strategy to help distressed homeowners avoid foreclosure. In doing so, the goal of this program is to help to stabilize the country’s housing market and improve the overall economy of our nation. Eligible homeowners can effectively lower their monthly payments and obtain secure loans at today’s low mortgage rates. The program can provide a means for those who cannot afford their present mortgage payments to keep their home out of foreclosure. There are also options for unemployed homeowners and for those who owe more than the present value of their homes.
The Annese Law Firm, P.C. can work with you and your bank to obtain the best possible terms for you. Making your payment affordable so that you can avoid foreclosure is our goal. It is a win-win situation if your home avoids foreclosure.
If you are in arrears in your payments or are suffering economic hardships with your home mortgage payments, contact The Annese Law Firm, P.C., today – so we can begin to work together to negotiate a loan modification with your bank that will allow you to keep your home.
Short Sale:
When you owe more on your home than it is worth is commonly known as “being under water” with your mortgage loan. While most of our clients in this position have intentions to maintain possession of their home through obtaining a loan modification, if your goal is instead to sell your home then you should consider a Short Sale.
A Short Sale is an alternative to foreclosure which allows homeowners with more debt than their property is worth to sell their property to a third-party for less than is owed on their mortgage. This provides homeowners with a fresh financial start by freeing them from crippling debt.
Keep in mind that a Short Sale cannot happen without the consent of the lender, and the ultimate task in completing the deal is convincing the lender to accept something less than what is owed on your mortgage loan. provide that consent is difficult without the guidance of experienced professionals. The professionals at The Annese Law Firm, P.C. work aggressively to persuade lenders to take a loss on loans so that our clients can sell their homes through Short Sales.
The Annese Law Firm, P.C. also works with the area’s leading realtors to market your property for Short Sale, while negotiating directly with your bank to help direct a timely Short Sale of your property.
Bankruptcy:
As a last resort to stay in your property, at least temporarily, we sometimes advise clients of theor option to seek bankruptcy protection. Under certain circumstances, if you are in foreclosure and file a bankruptcy, all actions and proceedings against you are stayed until the bankruptcy is completed. This means the foreclosure is “stopped”, including sheriff’s sales.
With a bankruptcy filed under Chapter 7 of the US Bankruptcy Code you can wipe out all of your debts and get a fresh start. Such a bankruptcy can offer complete and immediate relief to the most oppressive debt. Alternatively, a bankruptcy filed under Chapter 13, you will be required to make payments on the mortgage through the bankruptcy trustee. This type of bankruptcy will allow you stay in your home, while providing breathing room so that can get your financial house in order and pay off your debts. This type of bankruptcy is also particularly attractive to those facing foreclosure, as it stops the foreclosure process.
As necessary, The Annese Law Firm, P.C. will work with you to initiate bankruptcy proceedings; after first sitting down with experienced bankruptcy attorneys who will consult with you to determine whether bankruptcy is advisable for you.
