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FORECLOSURE PROPERTY: Foreclosure is what happens when a homeowner fails to pay the mortgage.

What is foreclosure, and what exactly happens in it?

If the proprietor is unable to pay off the unsettled loan or trade the property through a short sale, the property then goes to a public foreclosure sale. If the property doesn’t sell, only then the loaning organization takes ownership of it.

Here are the six steps to foreclosure:

Nothing happens all of a sudden; just like that, foreclosure also takes time, and there are phases through which a landowner has to pass through

1. It all starts with missed payments

Even a single missed payment can start the New Jersey foreclosure process. You’ll start hearing from your lender by mail and calls if you are a couple of weeks late for the mortgage payment.

These messages are to make you realize your responsibility to pay by the due date each month. Also, they may include a penalty for late payment. One missed payment is often not the end reason for foreclosure; if you cover the dues, your loan will be refurbished to good standing, and foreclosure will end there and then.

But, if the lender reports your negligence to the national credit bureaus, one missed payment could cause your credit scores to drop drastically.

2. Then comes the mortgage default

If you go 90 days without making a payment, it is considered nonpayment on a mortgage. Under mortgage agreements, failure to pay the loan for this long allows the lender to start the pre-foreclosure process.

3. Now, what is pre-foreclosure?

After 90 days of mortgage default, the financier informs you by certified mail that you’ve not paid, which has caused them to commence foreclosure proceedings. 

This stage of the process is also known as the pre-foreclosure phase. It involves Foreclosure Property in New Jersey proceedings and the lawful timeline they must follow. All these things are already marked clear in the mortgage contract. It’s common for a nonpayment notice to point out that the lender will file a court appeal in 30 days seeking permission to seize and auction the property. 

The speed of the New Jersey foreclosure process varies from state to state; in some states, the court’s review of the lender’s papers can take months, whereas, in other states, approval to foreclose can be arranged within a week of filing its petition.

4. Public notice

Some establishments broadcast the titles of those in nonpayment and subject to foreclosure—placing them on public sites or issuing them in local newspapers.

5. Foreclosure auction

Once the owner gains authorization for Foreclosure Property in New Jersey, you must vacate the property. It is then locked up and scheduled for public sale. Foreclosed possessions are traded “as-is,” and purchasers have no chance to examine them before the sale. Many foreclosures are often not sold at public auctions due to these restrictions. The ones that do sell are often sold at considerably less value than the actual market value.

6. In the end, your property becomes Real estate-owned or REO foreclosure property:

Now you must be thinking, what is REO foreclosed properties in New Jersey?

When a property is not bought at auction, it converts into real-estate-owned property. Ownership returns to the lender, and the property becomes open for private sale.

What causes properties to go into foreclosure?


There are three major causes behind foreclosures:

1.    Negative Equity (Underwater):

Negative equity happens when a property’s worth cuts, causing the owner to be indebted more than what the asset is worth. When this happens, an owner’s best choice is either to refinance or sell the property.

2.    Increasing Interest Rates:

Some foreclosures can be credited to subprime loans, which see small introductory interest rates, only for those charges to rearrange at very high values a few years later.

This can simply make it challenging for possessors to keep up with mortgage payments. Property owners with inferior credit scores also happen to be the focal receivers of subprime mortgages.

3.    Personal Causes:

These are 4 of the main personal scenarios that lead to foreclosure:

Death: Death is without a doubt a leading cause of foreclosure, predominantly when it happens to be the head and primary wage earner of the family who passes.

Divorce: Divorce simply means that one person is elected accountable for making mortgage payments. The divorce process is already stressful enough, and paying mortgage payments just adds more to that stress which eventually ends up in foreclosure.

Drugs: Substance addiction disturbs individuals in so many ways, just like drug addiction takes over mortgage payments as well.

Disease: Unforeseen medical bills are the primary cause of bankruptcy in the U.S. Illness, disastrous emergency, and insufficient health insurance can create extreme financial stress that eventually means missing mortgage payments.

 What to do when facing foreclosure?

Foreclosure Property in New Jersey

Bringing your loans up-to-date simply means that you pay the total sum which is unpaid. If you inform the lender that you’ll be paying past dues as well as an extra fee, the New Jersey foreclosure process will be stopped.

However, this option isn’t feasible for most people because the actual problem is that they don’t have the cash to bring their credit up to date.

  • Modify the Loan

Another choice can be adjusting the terms of your loan. This can decrease your monthly costs or interest percentage, depending on the present situation you are in.

You may be able to adjust your loan with your lender, or you may be qualified for the government Homeowner Affordability and Sustainability Plan (HASP), which permits you to rearrange your loan plan.

  • Sell Your Property

You don’t want to lose your property, but foreclosure may be inescapable. Problems that come with a foreclosure can be avoided if you try making a short sale. Before you do this, get permission from the lender, or else a big legal issue will be waiting for you.

The main goal of making a short sale is to sell the property to professional cash home buyers in New Jersey for sufficient money to make up for what you have to repay your lender, which is not the easiest task. 

  • Declare Bankruptcy

Bankruptcy should only be used as a no-option or the last option with the least priority because it comes with some severe penalties.

When you file for bankruptcy, investors are given a break on your loans, which means they can’t request a mortgage until your bankruptcy case has been stable.

Before you decide to announce bankruptcy, have a detailed conversation with your financial adviser because this can come with a lot of troubles.

Foreclosure rescue scams you need to be careful about:

foreclosed properties in New Jersey

These alleged foreclosure advisors often use public notices to find their targets.

They suggest distressed borrowers’ assistance from foreclosure through

  • Email
  • Phone calls
  • In-person
  • Common Types of Scams

Examples of scams related to mortgage modification and foreclosure prevention include:

Foreclosure release and refinance fraud: In this fraud, the artists often act as mediators between property owners and lenders and offer to negotiate payment plans or loan adjustments.

False “government” alteration plans: These artists produce websites that look like federal websites and use business titles comparable to those used by government agencies.

Leaseback and rent-to-buy structures: These artists request you to hand over the name of your home to them with assurances of innovative and improved funding.

Bankruptcy scams: These artists may claim that filing for bankruptcy will solve your problem. But filing for bankruptcy is hardly a reliable answer to stop foreclosure from happening.

Debt-elimination schemes: These artists use unlawful legal arguments to encourage you that they can “remove” your debt and that you are not in somebody’s debt.


There is no doubt that foreclosure is a worrying event in any property owner’s life. This is a situation that neither an owner nor a mortgage lender wants because they often find better alternatives working together.

There’s also no doubt that foreclosures can significantly impact your credit and your self-esteem, but there’s one thing that might help: this impact heals with time.

It’s important to monitor your credit even if you are in a situation like foreclosure or not. Once the foreclosure process is final and you take care of your credit score, it can return to normal again.

A foreclosure will mark your credit for seven years, but the tables will turn if you preserve your credit and rebuild it!

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