We are a New Jersey Consumer Defense Law Firm that focuses on Defending Foreclosures and helping our clients get Mortgage Loan Modifications.
New Jersey Foreclosure can make you feel like you’re caught in a storm with no clear way out. However, many people have been able to stop foreclosures on their home. We can help you understand your options.
What is Foreclosure?
Foreclosure is a legal process where a lender attempts to recover a loan balance from a borrower who’s stopped making mortgage payments. It can take a few months, or over a year, depending upon the actions of the lender and the homeowner.
What is the New Jersey Foreclosure Timeline?
If you are facing foreclosure in New Jersey, it is critical that you understand the steps in the process. Keeping track of deadlines and answering your mail in a timely manner can be the difference between staying in your home or not. Below is a timeline of the major steps in a New Jersey foreclosure, and a homeowner can apply for a loan modification at any stage of the foreclosure:
- Default: The foreclosure process after a homeowner defaults on their mortgage payments. Generally, the lender or servicing company can begin the process after three (3) mortgage payments are missed.
- Notice of Intent to Foreclose: NJ law requires that the lender send a Notice of Intent to Foreclose to the homeowner, with a chance to pay the missed payments and avoid foreclosure.
- Complaint Served: The homeowner is served with a foreclosure complaint, which outlines the reasons for the foreclosure and its legal basis. Note that it may be a foreclosure scam if:
- The company is not located in NJ.
- The company does not have a NJ-licensed attorney that you can speak with.
- You get a notice that looks like it came from the Government with a number to call.
- They tell you that you are about to lose your home.
- You cannot speak to the attorney that is handling your file.
- They require you to file the papers with the Court.
- They will not appear in Court to defend you.
- Lis Pendens Filed with the County Clerk: After the Complaint is filed, the lender files a Lis Pendens, or pending lawsuit notice, with the County Clerk to provide public notice of the foreclosure action.
- File an Answer: Within 35 days of being served with the complaint, the homeowner has the right to file an answer to the complaint in Chancery Court, disputing the lender’s claims or asserting any defenses. A proper Contesting Answer will stop the foreclosure process and force the lender to come to Cour to prove they have the right to foreclose.
- Notice of Motion for Entry of Final Judgment: After the complaint is filed and there is no Answer to the Complaint, or the lender defeats the Answer in Court, the lender files a motion for a final judgment in the foreclosure lawsuit, which shows the Court that they have the Note and the Mortgage and provides the Court with proof of the exact amount due on the loan.
- Final Judgment and Writ of Execution: If the court approves the Motion for Final Judgment, an Order for Final Judgment is entered, and a writ of execution is issued to authorize the sale of the property.
- Sheriff Sale Scheduled: A Sheriff’s Sale is scheduled, where the property will be auctioned off to the highest bidder.
- The Homeowner is Entitled to Two Adjournments: The homeowner has the right to two adjournments, or delays, of the Sheriff’s sale, and each should be 28 days. alternatives to foreclosure.
- The Sheriff Sale Takes Place: The property is sold at the Sheriff’s Sale. It will be purchased by a Third Party Investor or taken back by the lender. The Homeowner has a ten (10) day period of redemption (or until the deed is delivered from the Sheriff) to pay the balance due or file a Motion with the Court to Set Aside the Sheriff Sale if there is a good reason. After the deed is delivered, the new owner may obtain a Writ of Possession or apply for an Ejectment to get possession of the property.
Foreclosure can be harsh and confusing. Understanding the process and available options are very important. Some common questions include:
Do I Have to Move Out of My House?
Initially, you don’t have to move out. Foreclosure isn’t instantaneous; it’s a process that can take months or even more than a year. However, once the foreclosure is finalized and the property is sold, you will have to move out.
Can I Keep the Profits from a Foreclosure Sale?
If the amount paid by a Third Party Investor at the Sheriff Sale exceeds the amount due to the lender, there is a surplus, and the Homeowner can apply to the Court to obtain these funds.
Do I Owe Money if the House Sells for Less Than I Owe?
If the foreclosure sale doesn’t cover your outstanding mortgage, the remaining balance, known as a deficiency, could still be your responsibility. However, this is very rare in New Jersey.
What are My Options to Keep My Home When Facing Foreclosure?
The options to keep your home when facing foreclosure are as follows:
- Reinstatement: Paying the overdue amount, fees, and penalties in one lump sum to bring the mortgage current. In New Jersey, you have the right to do this any time prior to Final Judgment being entered. Once Final Judgment is entered, the lender must approve the request to reinstate the loan.
- Repayment Plan: Working out an agreement with your lender where you make your current mortgage payment plus an extra amount to pay off the delinquency over time, usually 1-2 years.
- Loan Modification: This involves permanently changing the terms of your mortgage to make the payments more manageable. This could mean extending the loan term, reducing the interest rate, or even principal reduction.
