Foreclosure can be a lengthy ordeal. While dealing with foreclosure can be stressful, it is important to understand the process and your options. The following is intended to help understand what you can expect in a foreclosure case.
The NJ Foreclosure Process: Step by Step
The foreclosure process can begin after a default of the mortgage payment, or payment of taxes or insurance. Once there are past due payments, your bank or mortgage servicing company can begin the process, but there are many steps required by law, to ensure you are aware of the situation and have time to defend yourself.
Notice of Intent to Foreclose
If it is a residential property, the lender is required to send a notice of intent to foreclose by regular and certified mail. The notice will state the reason for the default and provide the amount that must be paid to cure the arrears and reinstate the loan to good standing. The notice must provide at least 30 days to make the payment before a foreclosure complaint can be filed.
Foreclosure Complaint Filed and Served
The foreclosure complaint is a public document. Once it’s filed, much like a speeding ticket, you will go on a list and you will receive several advertisements offering assistance. If you receive several advertisements, the complaint has been filed and you can expect to have someone come to your door and attempt to personally serve you with the complaint. If you refuse to accept service, they will seek to serve you by mail or by publishing the information in a local newspaper.
Filing an Answer to the Complaint
To properly defend yourself, you must file a contesting answer to the foreclosure complaint within 35 days of being served the complaint. If you have been served, it would make sense to consult with a foreclosure defense attorney.
An experienced foreclosure defense attorney can carefully evaluate your case and help identify defenses to the foreclosure that will force the lender to prove that they have the right to foreclose on your home.
It is also possible to file counterclaims against your lender for any violations on their part, including but not limited to:
- Real Estate Settlement Protection Act (RESPA) regulations;
- Truth in Lending Act (TILA) regulations;
- Refusing to honor your loan modification; or
- Refusing to accept your mortgage reinstatement payment.
If you can’t pay the arrears and reinstate the loan, the best option to save your home is to obtain a loan modification. A loan modification is based upon a mathematical formula and this office can do an analysis to determine if you qualify for a modification and give you an estimate of what the new payment terms would be, before you go through time and expense of the modification process. Additionally, the federal rules say that a lender only has to review one (1) application, so you want to apply when you have the best chance of being approved.
Notice of Motion for Entry of Final Judgment
If you cannot defeat the foreclosure and get the complaint dismissed, the lender will eventually file a Motion for Entry of Final Judgment, which is the application to set the exact amount owed. This happens in three steps:
- Your lender will send a Fair Foreclosure Act Notice to give you, the homeowner, one last chance to pay the arrears. This notice will say that your lender intends to apply for Final Judgment. However, if you send a letter within 10 days to say that you have a reasonable likelihood of getting the funds to reinstate, your lender will wait an additional 45 days to give you a chance to pay.
- Your lender will submit the Motion for Entry of Final Judgment. This includes all the proofs of the amount due and copies of the note, mortgage, assignments, and any modifications. You will receive notice that you have 10 days to object to the amount due if you believe it to be incorrect.
- Based upon foreclosures moving faster than ever, within about two (2) weeks after the application/motion for Final Judgment is submitted, it will be reviewed and if there are no obvious errors, it will be approved. Once Final Judgment is granted, your lender can apply for a sheriff sale. The amount of time from the final judgment to sale varies in each county. We maintain an informal list of time frames for each county. You can contact your county sheriff’s office to get more accurate information.
Lender Obtains Final Judgment & Writ of Execution
At this point in the process, the lender is no longer required by law to allow you to pay the arrears and reinstate the loan. They can require you to pay the full amount of the final judgment. Many times, the lender will allow reinstatement after the Final Judgment, but it is possible they refuse to allow it. If you have equity in the property and the lender knows they can get paid in full from a Sheriff Sale, they are more likely to refuse to allow reinstatement. You can also apply for a loan modification after final judgment, as long as a “complete” application is submitted at least 37 days prior to the Sheriff Sale.
If you did not file an Answer to the complaint, you can file a motion and ask the Judge to vacate the Final Judgment and permit you to defend the foreclosure, but you need to show that you have a meritorious defense to the foreclosure and a good reason why you didn’t file the Answer when you were served with the complaint. In other words, although it sounds like the end, you still have options to save your home.
Sheriff Sale Scheduled
Once the sheriff sale is scheduled, you are entering the final stages of the foreclosure process.
Homeowner Entitled to Two Adjournments and a Stay of Sale
You are entitled to two adjournments of the Sheriff Sale, and each adjournment is two (2) weeks. So, you can adjourn the sale for a total of 28 days. After that, you would need to file a motion with the Judge in your county to ask the sale to be stayed, or you would need to file a Bankruptcy and qualify for the Automatic Stay, in order to stop the sale.
Learn more about the NJ Sheriff Sale Process here.
This is the final stage in the foreclosure process. Once the sheriff sale has completed, the plaintiff (the lender) will need to obtain a Writ of Possession in order to make you leave the property. They cannot simply lock you out of your house.
Learn more about Eviction after Foreclosure here.
If You are Going Through the NJ Foreclosure Process, Don’t Delay!
If you are at any stage in the NJ foreclosure process and have not yet reached out to an experienced foreclosure defense attorney, don’t put it off any longer. Ira J. Metrick has been helping consumers in New Jersey for more than 20 years. Reach out today for a free consultation.
A simple version of the foreclosure timeline can be found here.