New Jersey's Foreclosure Process Explained
New Jersey is a Judicial foreclosure state which means that if a person defaults on his mortgage, the lender has to go to court to repossess the property. The foreclosure process in the Garden State is quite lengthy with strict rules laid out for the mortgage lenders while providing multiple opportunities for the homeowners to save their homes. Early consultation with a New Jersey Foreclosure attorney can help in managing your debt and retaining the ownership of your property.
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Steps in New Jersey Foreclosure Process
Although New Jersey witnessed a slowdown in its foreclosure rates, it had the fourth-highest number of foreclosures in 2021. One in every 1,288 homes in the Garden State had a foreclosure filing by end of 2021, a study showed. Also, one in every 792 housing units had a foreclosure filing in Q1 2022. The foreclosure is initiated by the mortgage lenders to get back their money in case of a default.
A default occurs when the homeowner misses one mortgage payment or breaks the loan agreement in any way. The lender, however, cannot file a foreclosure lawsuit until the homeowner is more than 120 days late in making the due payment. Before filing for a foreclosure, the lender has to give the homeowner certain loss mitigation options like a loan modification. Here are the steps in New Jersey’s foreclosure process.
1. Notice of Intention to Foreclose
In the first step, the lender has to send the homeowner, a notice of intention to foreclose at least 30 days but not more than 180 days before filing the complaint. The notice should mention the reason for the default and the amount that needs to be paid to stop the foreclosure.
2. Filing of the Foreclosure Complaint
The lender can file a foreclosure complaint if the homeowner does not cure the default within 30 days of getting the notice of intention to foreclose. The complaint mentions why the lender has the legal right to foreclose and asks the court to give it the property.
3. Serving of Summons Followed by Entry of Default
In this step, the lender has to serve (either personally or by mail or via publication in a local newspaper after getting special permission) a copy of the summons and foreclosure complaint. The homeowners have 35 days from the date or the receipt of the summons to file an answer with the court. They can also request foreclosure mediation within 60 days of getting the complaint document. In case, no answer is filed or a non-contesting answer is filed the lender seeks the court to enter a default.
4. Request to Court to Enter Final Judgement
If the homeowner does not respond to the request for the entry of default, the lender can ask the court to enter final judgment. However, 14 days before this filing, the mortgage lender has to send the homeowner a notice offering a final chance to cure the default. The homeowner needs to respond within ten days of the receipt of notice and will be given 45 days from the date of the letter to cure the default. In case of the homeowner not being able to cure the default, the court will grant final judgment to the lender and issue a writ of execution ordering the sale of the property at a public auction.
5. Sale of Property
The New Jersey law requires the sheriff to conduct the foreclosure sale within 150 days of the receipt of the writ of execution. The sale can be adjourned up to 5 times, subject to certain conditions. The sale proceeds are used to pay the due amount to the mortgage lender.
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The law provides homeowners several opportunities to save their property from foreclosure by curing the default. For expert advice on the available options and ways to save your property, you should seek expert help.
It is crucial to file your case in Chapter 13 of the Bankruptcy Code BEFORE the Sheriff Sale is conducted in order to save your residence in Bankruptcy.