On January 12th, 2024, New Jersey’s Fair Foreclosure Act was amended to include a new foreclosure protection for homeowners. Specifically, the introduction of the Community Wealth Preservation Program gives families facing foreclosure the first chance to buy back their homes at sheriff’s sales.
What is the NJ Fair Foreclosure Act?
The New Jersey Fair Foreclosure Act (FFA) is a set of laws designed to ensure fairness and due process for homeowners facing foreclosure. Key provisions of the FFA include:
- Notice Requirements: Lenders must send a notice of intent to foreclose 30 days before the foreclosure date, detailing the default, amount owed, and cure options.
- Cure Period: Homeowners have the legal right to pay the arrears and reinstate the loan anytime prior to Final Judgment being entered.
- Mediation Option: A Foreclosure Mediation Program allows homeowners to receive some assistance in their attempts to modify their loans.
The Fair Foreclosure Act aims to prevent wrongful foreclosures by requiring lenders to ensure that homeowners are fully informed and given every opportunity to retain their homes. Following the amendments made in January, families hoping to buy back a foreclosed home need to secure a loan preapproval for an amount that matches the property’s original upset price.
Other Laws that Can Protect You from Foreclosure
In addition to the Fair Foreclosure Act, homeowners also benefit from the NJ Consumer Fraud Act, the Federal Truth in Lending Act, and The Fair Debt Collection Practices Act.
NJ Consumer Fraud Act
The NJ Consumer Fraud Act protects consumers against deceptive practices in sales and services, including real estate and mortgages. For foreclosure defense, this act is relevant if a lender or servicer has misled homeowners about mortgage terms or foreclosure remedies. Homeowners can use violations of this act to challenge the foreclosure process and potentially seek damages.
Truth in Lending Act (TILA)
The Truth in Lending Act requires lenders to provide clear disclosures about loan terms and costs. In foreclosure defense, TILA is crucial if the lender fails to disclose key details like interest rates or conditions of adjustable rates. Violations can lead to loan rescission, providing a strong basis to contest foreclosures and renegotiate terms.
Fair Debt Collection Practices Act (FDCPA)
The Fair Debt Collection Practices Act (FDCPA) (15 USC 1692 et seq.), which became effective in March 1978, was designed to eliminate abusive, deceptive, and unfair debt collection practices.
Find an Experienced NJ Foreclosure Defense Attorney
When facing foreclosure, homeowners should have all the information needed to properly defend themselves. An experienced NJ foreclosure defense attorney can help ensure all options are understood. Ira J. Metrick has been helping homeowners in New Jersey for more than 20 years. Contact us to learn more about the NJ Foreclosure Timeline, apply for a loan modification, or receive a free consultation.