the prospect of losing one's home to foreclosure and one of the most overwhelming and frightening experiences that anyone faces but with some knowledge about the processes and the options available you may be able to weather the experience with a little less stress and anguish and find the strength and the clarity to make choices that are right for you i marry lynn she obviously and welcome to pro se nation understand the law for one's self joining me today are two experts who have worked on the frontlines of the foreclosure crisis in new jersey care's to be ennis is an attorney based in somerville new jersey who has concentrated her practice soley on debtors rights and has successfully litigated chapter seven eleven and thirteen matters in bankruptcy adversary proceedings before the u s bankruptcy court as well as state court proceedings involving foreclosure defense also joining us today is vivian gasp are an author keynote speaker host and co producer of the princeton t v show stop my crisis with vivian caspar as the chief mortgage modification specialist with kenneth sampson law office based in morristown new jersey she has helped more than three hundred fifty families facing foreclosure her upcoming book is titled my mortgage lender my bully which exposes some of the harsh tactics employed by mortgage lenders so thanks for joining me today so i just like to kind of look at some statistics here are what i found in the wall street journal as reported by the wall street journal between two thousand and eight and two thousand and fourteen nine million people in this country lost their homes to foreclosure actually that number sounds a little low to me but i'm going to ask in and also according to the star ledger new jersey dot com in fourth quarter two thousand and fifteen new jersey ranked highest in foreclosures in the nation you know i thought we were recovering from the great recession kiersten would you like to give us your perspective from my perspective in the law office i think that it seems to me that foreclosures  down i think they're a little more organized and being prosecuted in a more orderly fashion or not lasting three four five years historically they have been in addition i believe that they maybe  have increased per year statistics because there was a moratorium that had been imposed by judge jacobson in two thousand and ten and eleven and all the foreclosures were put on hold for the big companies scuse me and so i'm surprised that it's increased that much that high in comparison to other states but it doesn't surprise me that i'm in vivian i think baek at a lot of real estate brokers sales meetings and so of course first i'm listening to the sales meeting and what's going on and i do this throughout northern new jersey what i can hear from these real estate brokers and what i see as they go through their listings is that the have picked up and i believe that the foreclosure rates have picked up along with it because of the brain banks now pursue foreclosure actions more aggressively when they see that they have when they add this house that's no performing loan to the open market through listed through real estate agent they now than can sell this house because the real estate market needs inventory and houses of selling have you seen this are the banks turning these homes into rentals because i hear that the rental market is actually booming right now where they never that they never keep the house and rented they don't want that liability as a landlord but there are a lot of  you know they're not requesting the judgment amount at sheriff so now they're taking less because the market is not bearing what most of the judgments are requiring  there's also a lot of short sales going on so can you explain that since this as you know the purpose of this show is really to help the average person better understand the law so whenever we can define our terms that would be ok so what does that mean short so when a person sells their property for less than is owed to the bank and you have to get approval from the mortgage company to take less than it usually ok if there's just one mortgage and the price is warranted for the area and therefore they require you to have it on the market so you know it's arms man transaction is to fair market value and if there's a second mortgage involved as can be more difficult because they're going to get less but then you have to argue you'll get nothing if there's a foreclosure of the first because you'll be stripped off sure sure how much of a loss to the banks usually take in that instance with a short sale like is there a percentage that could be well i mean if a home is valued at if the mortgage is say five hundred thousand that a homeowner own  what are banks willing to take in a short sale it's just a matter if there's a bank benefit more from a foreclosure or from accepting a short sale right and the problem is sometimes they benefit more from a  foreclosure then from a short sale because a foreclosure it's a total loss on their books where a short sale is not ok and so they have to of course see what's most beneficial for them and what i see is also a little bit different as sitting through a lot of real state meetings the problem that everyone's concerned with is the some sure you're aware i don't know the exact name for it but the bill that law is that the shortage amounts to let's say for you example you said someone o five hundred thousand dollars on a house but let's say the current value for super is simple math is four hundred thousand right and they got an offer and can have a buyer for that for a thousand so that's one hundred thousand dollars differential the shortage amount right will right the problem is right now for primary mortgages this minute they've been reviewing the bill that hundred thousand dollars differential as you're very much more an expert on this than i am that i rest could potentially and force they just haven't recently or haven't in general yep but every year that law needs to be reviewed renewed where every company that forgives a dollar amount including the overage on a mortgage so that hundred thousand dollars differential is a forgiveness to the  homeowner when it's sold right so that one hundred thousand dollars though potentially what if the iris decides to say well you have that form now we don't want to do that forgiveness we want to tax you want that differential that is a very easy way for the government to raise a very large sum of money and all the shortage amounts are taxed that's a huge dome and so let's say for example household earns on the thousand dollars a year ok now you do the short sale you're taxed on as if that one hundred thousand dollars was an earnings how many people can handle that they'll end up owing the i rest so even if they end up settling on that dollar amount right so let's say hypothetically that the you know and i'm just going to this up fifty thousand dollars for example well the ira says ok we're not going to make you stick to that fifty thousand dollars we'll take half we'll take twenty five thousand that's still twenty five thousand dollars they wouldn't have previously again right now there's along the books that say for primary homes they don't enforce that tunney nine ten ninety nine but that law has to be renewed every year and you don't know that at the time the short sales going on because they back will backtrack it by ear and i'm not accountant but i always tell my clients that there's a insolvency exemption so if they were ten nine and see that i believe they can exempt that if they are and solve it and in most cases the the homeowner is insolvent with the exception of investors who had purchased lots of properties and then couldn't sell them two thousand  curd i do have some clients that have have huge tax liabilities right now who is going through foreclosure right now everybody but it doesn't matter that i have clients that are doctors lawyers  know the self employed or hit the most because they have no unemployment and so the just worry about putting food on the table keeping electric on but it's everybody there's been such a  of income i have engineers that come in that have you know worked there fifty years old they've worked their whole lives they're making two hundred fifty thousand dollars a year now they make you know eighty because they're being replaced by three other people  that are only paid thirty how are the banks treating people now i think it really depends again on the lender the smaller banks are not going to name any names can be absolutely vicious really not modify expect you know a down payment if you even want to apply for a modification they're just absolutely horrible the bigger banks seem to have the program now i think back in two thousand and twelve it was very difficult but now it's very streamlined you know what you have to submit you you can figure out what you have to earn to fall into the hamp guidelines there's you know it's just much more streamlined so my experience my work as i work for an attorney who he helps me reach out on a personal level what we do a little differently is i go out to the public speaking i educate people and if they choose to have the attorney i sit in the client's home and i system and i usually in the being there between three to five hours and of course if you were to pay an attorney sit through three or five hours you'd be able to afford it because that attorney is so therefore that's what i do for them and  must be very sensitive to the city about laws and this is a very arduous process to begin with i mean on the best case scenario if you were to successfully get a whomp hit modification the first try that's a minimum of six to nine months and there's a reason for it it's they have their time frames that they're allowed by law and that's the best you know what are you doing with people during that five hour well i read it all most people unfortunately and this is why i'm the mortgage industry got a very reputation that's why they start going through all those regulations of many years ago is there were many loan officers very unscrupulous so they tell people it's a fixed mortgage when it really wasn't it was an adjustable rate oh it's fixed  rate right and unfortunately people lot of people are taken advantage of right so one of the things i did is i'd sit there and go through their loan documentation to make sure they had what they really thought they had right and so they really understood the type of mortgage they're currently in because if you had a ten year arm and let's say you still got it in two thousand and seven you might still be in that ten year arm but when that adjusts be careful because when you add in the principal to become a fully a mortgage that can adjust to the tune of five hundred to one thousand dollars additional to your payment a month that's substantial for most people right so they need to understand what type of mortgage and then i take a financial picture to help people holistically settle just do the application o instruct them how to do the application and leave i need them to understand that there's many things that they could do during the entire process of their modification so they are you that could cause them to lose the if the veil ability of that for example do not go on vacation during your fork your modification process you have no idea how many people tell me they just bought tickets to go someplace like you haven't had a mortgage payment to your name in several years no but i mean are you are the banks monitoring people closely their how king of their bank statements yes they review bank oh i see updated bank statement ok every month for the entire process once they signed up on it they're signed off but during duration they write definitely up looking for updated bank statements and if they choose to they could certainly review their credit cards if they really want to because you're applying to them and hardship bases so one of these your miles it but you know most people aren't that creative or have that ability to how many people are i mean i don't know are able to go through the process on their own without any help from an expert such as yourselves and i think you if you're organized you can do it on your own but it's a lot of follow up and making sure that the documents don't get stale because the  understanding is that the services make money on a defaulted loan more than they do on a performing loan and so every time there's an application for a loan modification that servicers making more money and fees and costs so this service sir gets paid to service the loan collect the mortgage payments and can charge fees and costs and so stephen with that when the loan is in default they get paid more because default as opposed to performing loan and i don't understand why ok do you when you say wait a minute this service or you mean the mortgage company now who are you talking about the owner of the note is an entity and they hire a service or  companies and i'm not going to name names but there are companies you know i will tell you what i think is even more shameful than a practice like that is i have a client who i had proved this is several years ago i started doing this in two thousand and eight ready for this they had only they were only in the new jersey it's an only one year behind now typically speaking in new jersey they were running four to six years until they finally got the judgment of sheriff's sale and so forth right in a foreclosure show assailing cetera though i think it's absolutely horrendous when a representative in the litigation department for the bank you know the foreclosure department loss mitigation upon its moments right literally told my client to liquidate not borrow against liquidate their for one k and these people would had five children in bergen county they were so freed that they'd be homeless because they just believe their mortgage company where are they then ended up liquidating this ninety six thousand dollar ira or for one care rather and ended up with a sixty thousand dollar i arrest debt from somebody sitting at that last minute geisha apartment at a very major bank one of the top five banks in this country and look what happened to this family and they could have easily found a chapter thirteen bankruptcy and say that all of their a loan modification through box mitigation or cured and reinstated over five years and never lost that money that's heinous so they lost their money and they ended up with this tremendous i read just i rest and don't forget about the ten percent early withdrawal penalty because they're obviously not retirement age and they did that because that representative making what ten fifteen bucks an hour doesn't care about them they care about reporting to their boss and this is again one of the top five mortgage banks the company and they're doing so many other hannahs things i i want people to know that they have a lot of rights and they should not give into their mortgage bank and that's their not their friend this is an adversarial situation the mortgage company wants their money and you want to keep your home you need to understand they're not your friend they are looking to make a deal there's so many mortgage companies that give a modification that's not the best modification for someone in many times of payments even higher then it should be if they were just to get the appropriate what's available if they were to get a ham program the hip brings them down two percent air i believe that if you're not behind yet ok so if somebody is intice a painting that they're going to fall behind maybe there's a reduction in income or something like that they can apply like they would for other refinancing because that was actually my next question for for people who you know maybe they've just gotten word that their company is is you know going through some kind of transition they know that their income is going to change in three to six months or more what do you suggest care student what or what are some of the steps they should take it will really depends on that person if they're going to totally lose their income right away you know just renting out the house and i would like to recommend the new jersey home keepers program up to fifty thousand dollars that you don't have to pay back as long as you stay in the home for five years and it does become a l time so many people have not change your lifestyle that got them into that situation to begin with so i'm all for getting roommates and so many times at six seven eight do you know that people can get as much money as nine hundred two thousand dollars a month for a roommate as long  depends on their location but i've seen that i know people who get up to twenty dollars a month from eight more stone right so it's a big difference again just depending on the circumstances you know i would talk definitely talk to the lender but they do have forbearance is sometimes that they also had to explain that it's an agreement with the mortgage company that they'll suspend payments for a period of three to six months so you get her  unemployed with the intent that when you can start paying you'll pay maybe more you'll pay a lump sum something like that so that's always available you know my experience is they really don't want your house there's too many houses on the market that's my experience but you know i think that most of the mortgage companies are willing to work with you it just seems that people  get very afraid of the process they become and maybe they just they just really don't want to address it at a certain point they think it'll just go away or something will change and it seems to me like that's probably the worst thing you can do absolutely in my opinion you should be right up front sit down and look at your budget understand your budget understand we're going forward when i do mortgage modifications in my office i usually required calculate what a payment would be and i usually make the client start either put in that and a separate savings account or but in my trust account so when they get that modification they can start paying and  egg there and then they get used to budgeting and dealing with it and really it's very frustrating when i have people come in haven't paid their mortgage for five years and they have nothing and there's no real reason it's just they haven't you know thought about it and now they're up against the wall can't do it well as we talked about actually on a program that we did early early on about whistleblower laws you know it's unfortunate that  many people who were involved in the predatory lending loans you know prior to two thousand and eight you know any one of those people involved could have come forward and said wait a minute you know something's wrong here we're giving a long to somebody who you know can't afford to keep the electric on like something is wrong so it's unfortunate it's not it's not always that that individual is is spending wildly they just got they got into bad loans they were given a loan they should have never been given so i saw that happen a lot when i was a mortgage loan officer unfortunately it people my officers you know the office that i worked in were acting predatory in some ethnicities they figured well i'm in this ethnicity they target that speakers they could speak the language that they knew builds in the media trust them because of the time in the mid two thousand there were these no documentation loans available they were these stated income loans and so forth they do a lot of people took advantage and they charge for points to get a loan they got into these arms and when they adjusted it caused a lot of hardship what people need to realize now that if you got into a mortgage where you did not escrow your taxes that's one thing you should definitely do is call up your mortgage company if you're having issues and making a mortgage payment get the mortgage company to pay your taxes mortgage company will take care of it and then you only owe the one place and you won't have issues at your township owing your taxes because you can have a taxi all for owing for water and sewer for get your taxes wow but with tax sales certificate they can't foreclose for two years after they purchase it so that is a little bit more of a window as opposed to not paying your mortgage so but normally a mortgage company will advance for the taxes because they don't want to be behind the the tax certificate holder who can foreclose and there are cases where the certificate holder forecloses and the bank doesn't appear and therefore closer interest one final question for both of you so i'm distraught i am story months late on my mortgage i am not making enough money right now at least not from my primary or two part time jobs what do you tell them that you need to address it sit down look at your budget see where it's short why you're not making it and you had previously look at your credit card debt sometimes a bankruptcy if you can get discharged your credit card debt you're in secured debt do that already there's always a chapter thirteen you can discharge that credit card debt and deal with your mortgage in the chapter thirteen if you're only three months behind at the point that we're stressing about see about taking whatever income you do have and prior ties everything to getting back keeping back on track mortgage payment by getting help in other areas is it to contact organizations such as norwest cat that house help for i believe in eight or nine counties in new jersey to help with fuel and then even your electric you can get assistance with so get assistance in other areas just don't pay unsecured debt over your mortgage because so many people come in and they say i paid on my credit cards and i did if a my mortgage or the last year and just because they call in kong all right so the squeaky wheel gets the oil and just ignore those people and