New Jersey Help For Foreclosures

Homeowners who are struggling to make payments in New Jersey may have an opportunity to get out of their bad mortgages easier than they think. As a proponent for helping those who are struggling with home loans, I must first say that if you are on the brink, contact an FHA loan adviser to find out what your options are. If you are in New Jersey, consider this opportunity.

The Federal Home Loan Bank of New York is a large bank providing funds to many of the 200 local banks in the region, including those in New Jersey. The bank has recently announced an initiative to offer some help to those who are struggling with their current mortgages.

The initiative is called HARP, or Housing Assistance and Recovery Program. The Federal Home Loan Bank is providing some $6 millions to Magyar Bank, which is based in New Brunswick. There, the First Baptist Church of Lincoln Gardens will provide counseling to those homeowners it has identified as being in danger of foreclosure. Once these people have been identified, the company (working under The First Baptist Community Development Corporation) negotiates on the homeowner’s behalf with their lender.

They use the proceeds from the $6 million loan to offer up to 70 percent of the loan’s value to the lender. Most lenders are happily taking 70 percent knowing that these individuals are on the verge of foreclosing. The lender will simply write off the remaining 30 percent as a loss and turn the loan over as a paid in full loan (which Magyar Bank will now hold as mortgage holder.)

Sound confusing? It is, but there is more. Magyar Bank holds the loan, but the homeowners are now actually renters in the home, and will make payments to First Baptist. The rent amount is based on what the homeowner can afford to pay. First Baptists works closely with these now tenants so they can improve their credit scores and their financial outlook. Then, once the tenants are ready, they will hopefully be able to refinance the loan into a new one with better terms.

The organization is working with other organizations in the New York area, as well as other areas of New Jersey to offer similar opportunities. There are several families making the transition into new mortgages currently.

Is this the right option for you? If a program like this is offered, and you have exhausted all possibilities with other loans, including FHA loans, then consider it. Work hard to get back ownership of your home though!

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