It has been well documented that the State as well as the entire country has been mired in a mortgage crisis. 

            Whether you’re a homeowner or renter in a foreclosed building, there are certain steps you can take to protect yourself.

Here’s what a homeowner can do:

            First, contact a HUD counseling agency.  For the current list of licensed HUD counseling agencies refer to the HUD website below.  http://www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm?webListAction=search&searchstate=NJ.         

            If you are having a problem with the company that is servicing your loan there are a few things to remember.  First, there is no regulation of the mortgage loan service industry in the State of New Jersey.  These matters normally have to be worked out between the consumer and the servicing company.  Second, if you feel the company which is servicing your loan is in breach of your mortgage contract, you should consider consulting with legal counsel.  Third, you can file for assistance with the Division of Banking-Consumer Services Bureau.  As a courtesy, they will send a copy of your complaint, along with a letter asking the mortgage company or bank to address the issues involved.

Scams

            Unfortunately, the mortgage crisis has not only made it difficult for some to stay in their homes but, it has made them more vulnerable to foreclosure scams.

            I’m sure many have seen signs on telephone poles that say “Cash for your Home;” Never call these numbers;

            There are other scams such as “lease/buy-back schemes in which you’re asked to sell your home to an investor for a dollar amount equal to the balance of your mortgage.  The home is then leased back to you so you can continue to live there.  But it doesn’t always work out that way-sometimes, the rent is too high for you to stay and you’re evicted from the property; sometimes, the buy-back option is set too high and you lose your home for good.

            Another scam to avoid is the “foreclosure specialist.”  They are not licensed in the state, they charge excessive fees, and provide services that may not help you avoid foreclosure. 

            As for renters who live in a building which has been foreclosed, it is important to know your rights.

            According to the Public Advocate you can’t get evicted from your apartment just because the building has been foreclosed.  With a few exceptions New Jersey law protects tenants against eviction from their homes so long as they: pay rent, respect the peace and quiet of their neighbors, avoid willful or grossly negligent damage to the property, and obey the reasonable rules to which they have agreed.

            Enacted in 1974, the New Jersey Anti-Eviction Act protects residential tenants from losing their homes through no fault of their own. The act applies whether or not the tenant has a written lease. The act does not apply to tenants of owner-occupied homes with two or fewer rental units; units set aside for developmentally disabled members of the owner’s immediate family; and hotels, motels and guest houses.

            The laws protecting tenants from eviction apply throughout foreclosure proceedings and continue to have effect even after a new owner buys the property.

            The other thing to remember is that you are not in this alone.  There are many resources out there which can be helpful.  Again, the best place to start is with a HUD certified counselor