Many New Jersey homeowners haven't had the ability to make their monthly mortgage payments for 6 months or more. Under normal conditions they would be facing foreclosure, but thanks to Covid related homeowner assistance programs, a vast amount of these homeowners are not considered to be behind in their mortgage payments.
So why is that? Well, it's because the mortgage companies have been liberally giving homeowners a continuous "forbearance" on their mortgage payments. Basically the mortgage company is saying something like this: "We understand you have a Covid related hardship, and you can't afford to pay your mortgage payment every month. We are OK with that for the time being. We are not going to punish you for missing your payments. We are sort of going to give you a temporary free ride. It's like we are going to suspend your monthly payments, and we will even do it for more than 6 months. We might even give you up to 18 months, and we are not going to put a bad mark on your credit report."
So this sounds really, really good for homeowners. They don't pay, they stay in their home, and the forbearance payments are deferred. But they realize that at some point they are going to have to pay back those deferred payments, no doubt about that. And when pay back time comes, how are they going to be able to make those payments and prevent their home from going into foreclosure?
Those are certainly important questions, because these people obviously don't want to lose their homes, but what if even after 18 months of not paying their mortgage, they still can't afford to make even one monthly payment?
So here it is, Here is the Great News:
The federal government has come to the rescue - they have given New Jersey a lot of money to help homeowners who are in financial distress.
How much money? Well, how does $325 million sound? Pretty good, huh?
So who gets the money, how much can they get, and when do they get it?
Those again are great questions, and at this point its a little bit too early to give you all the answers, because the State of New Jersey has not yet released all of the guidance on the program.
I've got a contact with a gentleman who has substantially more information on this program than I do, and he has given me a sneak peak of what he expects the program will be like.
I don't want to give anyone any incorrect information, so since nothing is official, I'm just going to say the following, without making any promises to anybody because we don't know exactly what is going to happen:
Here are the some key points which I believe will happen. But remember, I could be wrong, and I will keep you updated as more specific information is released by the State of New Jersey.
It appears that New Jersey will be willing to give a conditional grant to homeowners of up to $48,000.
If a homeowner is less than $48,000 behind on their mortgage, and the homeowner still can't make future payments, New Jersey will keep making payments until the $48,000 maximum is reached.
Here's a specific example of the above. The mortgage is $2000 per month and the homeowner is 15 months behind, totalling $30,000. The homeowner is also presently unable to pay future mortgage payments. So, New Jersey will pay $30,000 to the mortgage company to bring the homeowner current. Then there is still $18,000 that can be used to fund the homeowner's future monthly mortgage payments, so New Jersey would pay 9 more months mortgage payments of $2000 per month until all of the $48,000 would be used up.
So if this is true, is the $48,000 a loan, or is it free money from the government? I think I know the answer, and I think it's a good answer, but I can't tell you at this point because nothing is yet official.
So homeowners who are behind in their mortgage payments - help is on the way. I hope to give you more specific updates in the very near future.
You can always call me for further information on this subject or any other legal matter.
Seymour - Your Underdog Advocate