New Jersey is a foreclosure haven with approximately one in every three bank-owned homes. And while it may be tempting to give up and accept the fact that your home is now up for sale, remember that there may still be time to put an end to the process before it’s too late. Before you decide on the best course of action, you will have to consider the type of foreclosure that is going on.
There are three general types of foreclosure:
- Judicial foreclosure
- Non-judicial foreclosure
- Deed in lieu of foreclosure
Judicial foreclosures involve actions taken in state civil courts and can be either “judicial” (pertaining to a mortgage or lien) or “non-judicial” (a mortgage not backed by a lien). Non-judicial foreclosures involve actions taken outside of the courts in places such as public auctions. Deed in lieu of foreclosure, also known as a “DIL,” occurs when the mortgage company accepts the deed to your property in exchange for the amount you still owe.
The following is a list of some additional items that you should consider before deciding what course of action will be best for your situation. Common legal defenses against foreclosure can be classified into 3 categories: procedural, substantive, and equitable defenses.
- Procedural defenses occur when a homeowner claims that foreclosure procedures were not followed as they should have been, in an attempt to stop the foreclosure proceedings.
- Substantive defenses are arguments that challenge the legality or legitimacy of a mortgage. These defenses usually result in halting the foreclosure process.
- Equitable defenses are rare and occur when a homeowner can prove that the mortgage is invalid or when it appears to violate public policy.
Remember that it is your duty to preserve your home from foreclosure, even if you are behind on payments. If you have fallen behind on payments, then consider negotiating a loan modification or refinancing with your mortgage company.