Did you know that historically, New Jersey has had one of the longest foreclosure timelines? The Fair Foreclosure Act was passed in 1995 to help speed up the foreclosure process in the state of New Jersey. Although New Jersey still has a significantly long timeline, it has been somewhat alleviated due to the passing of this act.

Read on to learn more about the Fair Foreclosure Act and how it applies to NJ homeowners and lenders!

The Fair Foreclosure Act – Overview

The Fair Foreclosure Act adds a set of rules to the foreclosure process in the state of New Jersey. It is also important to note that this act only applies to residential properties (except under very unique situations).

Option to Cure the Loan

The most important piece of the Fair Foreclosure Act is that lenders must allow borrowers, at any time during the foreclosure process, to cure their loan. This must happen before final judgment is made on the property and the borrower must be 100% up to date on their loan.

Notice of Intention to Foreclose

With the addition of the Fair Foreclosure Act, it is mandatory for lenders to send a notice to borrowers of their intentions to foreclosure, and this must be done prior to the lender filing a complaint with the Office of Foreclosure. The borrower will be given thirty days from the date of the Notice of Intention to Foreclose to cure their loan.

Optional Foreclosure Procedure Without Sale

One way that the Fair Foreclosure Act helps speed up the foreclosure process in New Jersey is by having the procedural option to opt for a sale through the Office of Foreclosure of the Superior Court as opposed to doing a Sheriff’s sale. This option is available to borrowers who have left the residential property, have given up the property in deed-in-lieu of foreclosure, or have no equity in the property.

In this scenario, the Office of Foreclosure may make an order of redemption which must be sent to the borrower between 45 and 60 days. The order of redemption will inform the borrower of the lender’s decision in opting for a foreclosure procedure without sale, inform the borrower of any terms and conditions associated with a public sale request, as well as inform the borrower that any request for a public sale of the NJ property must be made within thirty days of the date of the order of redemption. At this time, should the Office of Foreclosure enter a judgment on foreclosure, a public sale of the New Jersey property may take place.

Should the foreclosure take place without public sale, the lender will be allowed a judgment on foreclosure of the property. This would mean that the lender is granted an estate on the property.

Non-Residential Foreclosures

The New Jersey Fair Foreclosure Act also provides provisions to speed up a sheriff’s sale of a foreclosed property. For example, a sale must take place within 120 days of the date of the writ of execution. If this does not happen in the given time period, the Office of Foreclosure can appoint someone else to handle the matter.

To summarize, the Fair Foreclosure Act’s provisions provide alot of streamlining to the overall foreclosure process in the state of New Jersey. It also allows the defendant a chance at curing their loan before a final judgment is made.

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