If you are going through or anticipate going through foreclosure proceedings in New Jersey, you may be able to request mediation which may allow you to avoid declaring bankruptcy. In an effort to help resolve the growing number of foreclosure actions in New Jersey by encouraging work-out and payment arrangements between distressed borrowers and lenders, the state has established a Judiciary Foreclosure Mediation Program. It is a state-supported program that combines the efforts of the State Judiciary, the Office of the Attorney General, the Housing Mortgage Finance Agency in the Department of Community Affairs, the Public Advocate, the Department of Banking and Insurance, and Legal Services of New Jersey.
A request for mediation will stay the sheriff’s sale while mediation is pending if the homeowner files a successful motion in state court seeking a stay, although the lender may continue to seek foreclosure. Application may be made by homeowners who have filed an answer and are contesting the foreclosure at any time after a foreclosure complaint has been filed up to the time of the sheriff’s sale. Application can also be made by homeowners who failed to appear and whose cases are currently uncontested.
If you file for bankruptcy you can still apply for the mediation program whether your case is actively pending, you have received a discharge, or the case has been dismissed. You are not required to obtain relief from the automatic stay in order to participate in the Foreclosure Mediation Program.
To qualify for the program:
- You must be the owner-occupant of a 1-3 family residential property;
- The property must be your primary residence;
- You must be the borrower and the lender must be foreclosing on its mortgage loan
The mediation proceedings will be held at the courthouse in the county of venue and the mediator’s services are free.
Certain homeowners may also qualify for free foreclosure prevention housing counseling provided by counselors certified by the Department of Housing & Urban Development (HUD) and the New Jersey Housing & Mortgage Finance Agency (NJHMFA).
For advice on bankruptcy and foreclosure issues, including assistance with the Foreclosure Mediation Program, contact a New Jersey bankruptcy attorney for a free consultation.
To learn more about bankruptcy law, click here.
To learn more about foreclosure, click here.
