The State of New Jersey
NJ Department of Banking and Insurance

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CONSUMER ALERT: Home Mortgage Foreclosures/Subprime Lending

Home mortgage foreclosures have increased dramatically across the nation due to the ongoing disruption of the subprime mortgage lending market.

The following information may help if you a homeowner facing home mortgage foreclosure:

Consumer Assistance - Inquiries/Complaints

General Information  
Other Resources
Frequently Asked Questions
I am having a problem with the company that is servicing my mortgage loan (i.e., the mortgage servicer company to which I send my loan payments). What can I do?

Consumers may file a complaint with the New Jersey Department of Banking and Insurance for investigation of these complaints or, where appropriate, for a referral for handling by another agency. The online complaint form may be found on the Department website.

Complaints may also be filed by first class mail. Copies of relevant documents should be mailed to:  

New Jersey Department of Banking and Insurance 
Consumer Response Center
P.O. Box 471
Trenton, NJ  08625-0471
Attn: Division of Banking

Your complaint should include a statement in writing saying that you "authorize the New Jersey Department of Banking and Insurance to obtain my personal financial information from the [named] mortgage servicer company."  

Consumers with questions may call the Department’s Consumer Hotline at 1-800-446-7467.

Please note that filing a complaint with the New Jersey Department of Banking and Insurance does not prevent you from filing a civil action in a court of competent jurisdiction against your mortgage servicer and/or other responsible parties. 

I am currently in default of my mortgage payments and the mortgage company/bank has begun foreclosure proceedings. What can I do?

There are many legitimate reasons why borrowers may find themselves in default (loss of employment, sickness, death of a co-borrower, etc.). It is the borrower's best interest to contact the institution servicing their mortgage and explain what the issue is before they are more than thirty days default on a payment. It is strongly recommended that you notify the institution by sending it a certified letter to the appropriate area and then following it up with a telephone call. Most companies have specific units that handle these types of matters.

As a borrower you can request that the institution consider modifying the mortgage loan terms. An example would be the company allowing the borrower to refinance at no or low cost to obtain a lower interest in order to be able to continue making their monthly payments. If you can not make any payment and believe that this can be rectified within a reasonable amount of time, you can request that the institution provide you with a period of forbearance. This would give you the opportunity to address the financial hardship and then begin making your regularly scheduled payments. The institution would then apply the missed payments to either the end of the loan or to be due in full at a later date.

If you and the institution can not agree on a specific type of loan modification or if your request for forbearance is denied you should immediately contact legal counsel for assistance (see above). When selecting an attorney, be sure to obtain the services of someone who has experience dealing with foreclosure cases and understands your rights pursuant to the Fair Foreclosure Act (NJSA 2A:50-53 et. Seq.) This act states that a creditor must give the debtor thirty (30) days notice before commencing a foreclosure and provide the possible availability of financial assistance by State, Federal or nonprofit organizations.

What are the "Prime" and "Subprime" markets?

“Prime” and “Subprime” refers to the interest rate and terms of the loan based on the borrower’s credit history. Borrowers with the highest credit scores and cleanest payment histories present limited risk to the lender and are usually offered lower interest rates and placed in the “prime” market.

Borrowers with lower credit scores as a result of events such as late payments, court judgments and bankruptcies present a higher risk to the lender; and, therefore, are offered higher interest rates and are placed in the “subprime” market.

OPRA is a state law that was enacted to give the public greater access to government records maintained by public agencies in New Jersey.
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New Jersey Department of Banking and Insurance