NJ Home Foreclosures - Banks Still Want Their Money

This is an interesting article I read on CNN Money today. The headline reads, "You lost your house - but you still have to pay"

Read the full article here.

Wondering what the law in NJ is with respect to deficiency judgements? I found this excerpt

on Foreclosure.com

Are deficiency judgments permitted in New Jersey?

Yes. Adeficiency judgment may be obtained when a property in foreclosure is sold at a public sale for less than the loan amount which the underlying mortgage secures. This means that the borrower still owes the lender for the difference between what the property sold for at auction and the amount of the original loan. New Jersey however has a “Fair Market Credit” doctrine set forth under N.J.S.A 2A:50-3 which is a safeguard against low or minimal bids which may give rise to a windfall in the event of a deficiency proceeding. Under this doctrine the defaulting borrower is given credit for thefair market value of the property regardless of what the bid at the foreclosure sale was. This is however an affirmative defense which must be raised in a deficiency proceeding. Deficiency actions must be brought within three (3) months of the foreclosure sale.

Are you a home owner in trouble? Are you thinking of walking away from your home and letting it go to foreclosure? This article should make you think twice. There are other avenues available to you to help, such as a loan modification, a short sale and others. Read my recent post on lenders forgiving 2nd debts.