The pre-foreclosure process varies depending on the state, lender, and property. In some states, homeowners have to stop making mortgage payments in order to qualify for short sales. Other states allow homeowners to make reduced payments with permission from their lenders during this time – an arrangement called a “trial period plan” (TPP). If a lender allows the homeowner to make a reduced payment, then it is generally based on the amount needed to cover property taxes and insurance. Short sales allow homeowners to remain in their homes as tenants until their credit improves.
During the pre-foreclosure stage in New Jersey, the house can be sold through the short sale (REO) or regular sale. Once the home passes through the pre-foreclosure stage and is in foreclosure, it can be purchased at a low price through an REO auction or government foreclosure auction.
When lenders initiate the foreclosure process in New Jersey, they will schedule an auction date. If the home doesn’t sell at auction or if an offer isn’t accepted, then lenders can take possession of the home on the foreclosure date by physical or legal means. A lender can also choose not to take possession of a home through foreclosure.