What is a Foreclosure Mediation Program & How Can It Help You Save Your Home?

It is true that the home buying process has always been complicated and doused in various intricacies that one needs to always be aware of. Even after finding a home in New Jersey, getting a mortgage approved, and moving into the new house, you still have to do a lot more to fully own or keep the house for life. This is because houses are expensive to buy and take and usually require more money than the overall income earned by most people. Accordingly, people take various types of mortgages to buy and finally own their houses. 

Mortgages are nothing but repaying the (huge) borrowed amount over a considerably long period to the lender. And although mortgages have helped millions of Americans to buy and own houses, they can not only be difficult to obtain but also difficult to fully adhere to. This is because most lenders do not easily give away huge amounts to potential borrowers and even if they do, they do so with stringent laws in place. These laws are put into place in a way that makes people pay their dues on time or else they can lose their homes.

When a borrower fails to make their mortgage payments on time, they can open themselves up to foreclosures – which is the process of losing one’s home to the lender. Most foreclosures occur because borrowers aren’t able to make their payments on time or miss a series of payments altogether. Foreclosures can be detrimental to borrowers as they can remove them from their homes and hurt their credit scores.

But thanks to several helpful laws, people can avoid foreclosures, even if they have missed a few payments, in several ways. And one of the best ways of avoiding foreclosures is through obtaining a foreclosure mediation. In this article, we will take a closer look at what is a foreclosure mediation, how it works in the state of New Jersey, and how it can help you save your home.

At NJ Foreclosure Rescue, we offer various services that help all our clients avoid foreclosures and keep their homes. Our professional team always collects all the necessary data, thoroughly studies your entire case, and provides you with all the best possible solutions so you can continue living in your home! For more information about our foreclosure services, click here.

What is a Foreclosure Mediation Program?

Although the exact meaning of foreclosure mediation somewhat changes from state to state, at its core, the essence remains the same – to help homeowners avoid foreclosure. A foreclosure mediation involves bringing together all the main parties – lenders and borrowers – to a table in the presence of an unbiased mediator. The mediator presides over the meeting until the main parties can decide upon the best possible solution for the mortgage and home.

Although foreclosure mediations do not guarantee that homeowners can save their homes, they can surely help with several options to minimize their damage – if not save their homes. Foreclosure mediations can open up other options like a loan modification, short sale, deed in lieu of foreclosure, and more. At the very least, it buys more time to avoid foreclosure or make other arrangements of saving their property and finances.

The New Jersey Residential Foreclosure Mediation Program (FMP) is a program designed and sponsored by the courts to help residential homeowners who are in foreclosure. The program helps the lender and borrower find the best possible outcomes that can ultimately benefit both. Typically, residential homeowners are required to file for the foreclosure mediation program within 60 days of receiving a foreclosure notice. However, there is precedent for some more time.

The process usually consists of an initial conference, a second conference, and a mediation session. During these segments, the borrowers and lenders will go through all the necessary information to reach the best outcomes for everybody concerned.

Through the New Jersey Residential Foreclosure Mediation Program, one will receive the best guidance from industry experts like attorneys, counselors, mediators, and more. After you provide all the necessary details about your case, the experts will work with you and your bank to find the most amicable solution for everyone.

Remember, the laws are always changing, so one must always inquire about the foreclosure mediation program rules in their cities and states to know the exact requirements they would need to fulfill.

How Can a Foreclosure Mediation Program Help You?

Depending on your situation, foreclosure mediation programs can help you in several ways. Here’s how foreclosure mediation can help you:

1)It Can Buy You More Time

Before foreclosure mediation programs can provide you with anything else, they give you extra time to continue living in your house. But one should remember to use this time wisely as their actions during this period can help them save their homes from foreclosure – which has already been initiated. All foreclosures are (mostly) on hold when homeowners are in a foreclosure mediation program.

2) Get Your Mortgage Back on Track

In the time you are allotted during a foreclosure mediation program, you should spend it collecting all the necessary information and documentation that will help you avoid foreclosure. Although foreclosure may be temporarily prevented during the foreclosure mediation program, it is not guaranteed, and you should do all you can to prevent it. Some of the main information and documentation to collect are your income statements, tax statements, investment statements, etc

3) It Is a Mostly Free or Inexpensive Process

Most foreclosure mediation programs are covered within the mortgage costs. In some states, the government takes care of the charges involved in the foreclosure mediation program. In other states, banks usually cover the expenses when they pay their filing fees for foreclosure. In some cases, the bank may ask the borrower to split the cost of the foreclosure mediation program.

4) Receive Sound Knowledge from the Experts

Through foreclosure mediation programs, one can receive the best knowledge and advice from the most knowledgeable people in the industry. Under the foreclosure mediation program, one can access and consult with well-trained lawyers, HUD certified housing or mortgage counselors, and neutral and professional mediators. The main idea is to gather all the best information and minds to provide homeowners and borrowers with the best possible solutions.

5) You Can Avoid Foreclosure & Save Your Home

Although it isn’t guaranteed, homeowners can come to some amicable terms with lenders about repayments and save their homes from foreclosure. A foreclosure mediation program consists of a session where all the involved parties can discuss, present, and arrive at the soundest decision that would benefit all. Borrowers are advised to keep all their information and documents handy so they can present the best possible case of fixing their mortgages and keeping their homes.

How to Qualify for the New Jersey Residential Foreclosure Mediation Program (FMP)?

Here are some of the needs to qualify for the New Jersey foreclosure mediation program:

  • If the owner of the mortgaged house lives with at least one to three residents.
  • If the homeowner hasn’t filed for bankruptcy.
  • If the mortgaged property is the primary residence of the borrower.
  • If the homeowner is also the mortgager on the property being foreclosed.
  • If the mortgage package initially contained a foreclosure mediation program clause.

The Bottom Line

Although foreclosure mediation programs don’t directly guarantee the dismissal of a foreclosure, they can certainly help achieve it through various means. During the mediation process, borrowers or homeowners should actively participate in the meetings with various experts along with talking to their lenders about how they can get their payment plan back on track. Banks have never liked owning foreclosed homes, so it is always in their best interest to accommodate you with revised payment structures that let you keep your home!

At NJ Foreclosure Rescue, we offer various services that can help you before, during, and after foreclosures. Some of our services are collecting and filing documents, short sales, renovation loans, mortgage forgiveness, home equity lines, and a lot more. We always want to help you find the best solutions to save your home! For more information, give us a call today!