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NJ Home in Foreclosure? Don't Move Out!

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"My mortgage company is foreclosing. I have to move out." I have been hearing this a lot lately from New Jersey homeowners, and the problem is, it is not entirely true.

People think that because they are behind on the mortgage payments, or worse are no longer able to afford them, that they cannot live in the home anymore. I suppose that they are trying to do the honorable thing, but they really shouldn't.

Why You Shouldn't Move Out

The fact of the matter is, you own the home until the bank (or some third party) gains title to it through a foreclosure sale. As such, you have every right to live in it. Also, since New Jersey foreclosures are now taking at least 18 to 24 months to complete (if not more), there is no pressing need to move.

Consider these other reasons to stay:

  • As long as you own it, you could be held responsible for any injuries sustained on the property, so you still have to maintain and insure it (liability insurance, not just what the mortgage company has).
  • If it is a condo or some other planned development, you would still be responsible for condo or home association fees as long as you are the titled owner.
  • You can still be held responsible for the taxes.
  • Moving costs money!
  • Rent these days can often rival the mortgage payment you can no longer afford.

The bottom line is that you would end up spending more money moving out (rent and moving expenses, in addition to taxes and insurance, and possibly condo fees) than if you stayed.

Short Sale Is Also Not the Answer

Also, if you are already behind on payments and are upside down on the property, there is no real benefit to a short sale. Although it gets the property out of your name, it is a lot of effort and you no longer get to live there for less than a rent payment. If you have filed bankruptcy, you are protected from the bank coming after you for a deficiency should the home ultimately not sell for enough.

I May Be Able to Help

If you are in this situation, especially if you have other debt weighing on you, and you live in southern New Jersey, please feel free to call my office at 856-432-4113 or contact me through this site to schedule an appointment to discuss your options.

If you are thinking about bankruptcy and have questions, then download my free book,Top Questions People Ask About Filing Bankruptcy in New Jersey.

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