NJ Foreclosure Timelines and Processes to Consider

Having your property foreclosed is already a saddening topic. Going through and considering the different foreclosure procedures involved… that’s another stressful thing to think about.

Luckily, we’re here to help you through all of the different parts of the process! Every state has a different process, deadlines, and steps that must be followed before a property can be foreclosed on. New Jersey, in particular, has a lot of different procedures to take into consideration. There are specific New Jersey foreclosure laws and New Jersey foreclosure timelines that may help you in the long run. Here are some of the details you must know if you want your property protected during this process.

If your property is in NJ, and you have missed a mortgage payment, you are in default. Your lender may reach out to you verbally or on paper to give you notice, however, most lenders wait until you have defaulted at least three mortgage payments before sending the required legal notice. The New Jersey Fair Foreclosure Act requires lenders to provide you with key information in the notice as bulleted by LSNJLAW:

• The particular obligation or security interest.
• The nature of the default: does the lender identify why it claims a right to foreclose (e.g., that you failed to make certain monthly payments)?
  That you have a right to cure the default.
• The amount that you have to pay in order to cure the default.
• The date by which you have to pay the arrears in order to avoid foreclosure proceedings.
• The name, address, and phone number where you should send your payment.
• A statement that, if you do not pay the amount that you owe, the lender can begin foreclosure proceedings against you in court.
• A statement that, if the lender does begin foreclosure proceedings, you will still have the right to cure, but you will also owe court costs and the lender’s attorney’s fees.
• Whether you have the right to transfer the property to someone else and have that person cure the default.
• That you are advised to seek an attorney.
• A statement that, if you are not able to find an attorney, you can call the New Jersey Bar Association or the Lawyer Referral Service in your county.
• A statement that, if you can’t afford an attorney, you can call your local Legal Services office.
• A statement that financial assistance might be available to help you cure the default
• The name and address of the lender.
• The telephone number of a representative of the lender that you can contact if you don’t think you are in default or if you think you owe less than the amount the lender claims is due.

Additionally, your lender must send you this notice at least a month before officially filing a complaint which would begin the foreclosure process. Should your lender not provide the above information during this part of the NJ foreclosure process, you could ask the court to dismiss the foreclosure.

After the lender (whom we shall now call the plaintiff) has filed a complaint against you with the Office of Foreclosure, the Office of Foreclosure will begin to take over proceedings and organize a timeline. At this point, the plaintiff must give you a copy of the Summons and Complaint. Be wary that if they are unable to give it to you (because you have left your residence, for instance), they do have the right to publish the Summons and Complaint in the newspaper. Parallel to this time in the process, you can request mediation as long as it is within sixty days of receiving the plaintiff’s complaint. The purpose of mediation is to see if there is any way that the parties can solve their issues out of court. Once you have received the Summons and Complaint, you will have thirty-five days to file an Answer. In this part of the process, it is important to note that this may be your best opportunity to get out of a New Jersey foreclosure.

1. Contesting Answer: a contesting answer means that you are questioning the legality of the foreclosure. Is the mortgage legal? Does the plaintiff have the right to foreclosure your New Jersey property? Is the foreclosure process legal in this case?
2. Non-Contesting Answer: a non-contesting answer will be if you are unable to provide proof of the plaintiff’s wrongdoing.

Once the Office of Foreclosure has decided whether you have a contesting or non-contesting answer, they will send the case to the Superior Court in the NJ county of where the property is located.

In this part of a foreclosure process, the plaintiff will try to prove to the court that foreclosure is needed, and conversely, you will try to prove if and why the foreclosure is not legal. It is very important to note that the plaintiff will make a Motion for Summary Judgment to the court (usually right after you give the Office of Foreclosure an answer), and if you do not respond to this motion by filing and serving, you will automatically lose the case.

At this point in the process, the court will decide whether or not the plaintiff has the right to pursue foreclosing your property.

Discovery is an important process that takes place between you providing your answer and the court deciding if the plaintiff has the right to pursue a New Jersey foreclosure. Both parties (you, the defendant, and the lender, or the plaintiff) have the opportunity to ask the other for important documents, interrogations, and depositions. During this part of the process, should either party refuse to disclose discovery, there are consequences. If you, the defendant, do not provide any information requested, you would run the risk of the court “striking” your answer, and in doing so, the New Jersey foreclosure will continue.

Also during this time period in the foreclosure process, the judge will organize a meeting between you and the plaintiff to devise a schedule of meeting discovery documents deadlines. It is also normal for the judge to ask some questions to determine if there is a way around having a trial and updating the process.

At the trial, the plaintiff will defend their case of why they have the right to foreclose the NJ property, and you will be able to disprove the plaintiff.

Now let’s discuss what happens if you had filed a non-contested answer or had not filed an answer at all:

At this point in time, it would be in the lender’s best interest to ask the court to enter into default. This would mean that the court recognizes that you, the borrower, did not file an answer. Under New Jersey Court Rule 4:43-3, you have the right to ask the court to undo the default. It is important to note that there must be very good cause for you not answering or answering late.

Should the court not grant an undoing of the default, the lender may ask the court for the final judgment on the matter, however, they must first give you, the borrower, a notice two weeks in advance of them asking the court for a final judgment. They must also give you a final opportunity to cure the default.

Should you be able to pay off the loan, you must respond to the lender’s notice within ten days with a Good Faith Statement. Once your Good Faith Statement has been received, you will have forty-five days to cure the default.

In the case that you are unable to cure the default, you should first file bankruptcy. If you plan on filing for bankruptcy prior to foreclosure, you will have more options to work with during the NJ foreclosure process. However, it should be noted that filing for bankruptcy does nothing to stop a NJ foreclosure from happening. It should also be noted that some bankruptcy cases may take up to three years to complete and even then, a successful bankruptcy does not guarantee that you will get your property back. Also, hiring a bankruptcy attorney to help file for bankruptcy is important. Past court records, credit reports, and judgments of foreclosure can all be used in a court’s decision-making process.

Should the court grant the lender the right to foreclose the property in New Jersey, it will create a Writ of Execution, giving the County Sheriff the right to sell the property to the highest bidder. During this time, you have the right to request a “stay”, or a postponement of the County Sheriff’s selling the property by request at the Sheriff’s office. In NJ, you can be permitted two stays at a length of thirty days each. You will be charged $50 for each stay. Additionally, you may ask the court for a stay as well. This stay is often approved if you are participating in the court’s mortgage mediation program.

After the property has been put up in auction, you have ten days to try to get back the property in New Jersey. You can do so by refinancing or purchasing the property. Should you not be able to get back the NJ property, the proceeds from the sale at the auction will go to the lender to cover the cost of the mortgage. Please note that if the New Jersey home is sold for less than the cost of the mortgage (called a deficiency), the lender has the right to sue you for the difference. In the case that the property sells for more than the mortgage, you would receive the difference.

Once the property has been sold, the Sheriff’s office will send you a notice requiring you to vacate the property.

The foreclosure process can be extremely complicated and stressful, but the above is a good overview of the process and its timeline. If you need assistance avoiding foreclosure in New Jersey, contact us today!