Foreclosure & Alternatives Law
Homeowners in New Jersey who are past due on mortgage payments face the possibility of having to go through a foreclosure. In New Jersey, the foreclosure process is handled through the judicial system. These are called judicial foreclosures. State laws are very specific about how foreclosures must be handled.
Before lenders can initiate the foreclosure proceedings in court, they have to let the homeowner know that they are going to do so. At least 30 days prior to filing the lawsuit, the lender has to send a notice the homeowner stating the intent to foreclose. This must be sent using certified mail with a return receipt requested.
When the lender files the foreclosure lawsuit, the lender is responsible for letting the homeowner know. The lender must have the homeowner served with a complaint and summons. At this stage, homeowners can look into the Foreclosure Recovery Programs offered by the state, as well as federal programs. The earlier in the foreclosure process these programs are started, the better.
Once the court rules on the amount of the homeowner's debt, the homeowner has a short time to pay that amount. If the amount isn't paid by the deadline, the sale of the home will move forward. In order for the sale to occur, public notices have to be published. One is published at the county office in the county where the home is located. Other notices have to be published in two newspapers in the county. These notices must run four times within a four week period in both papers.
At least 10 days prior to the sale, the lender has to notify the homeowner of the sale. That notice has to include all information about the sale of the home, including the date, time, and location of the sale.
Homes that go through the foreclosure process are subject to reinstatement. This can occur if the borrower pays the past due amount of the loan. It can also occur if the homeowner and lender come to an agreement about the loan. This is possible up until the final judgment of foreclosure. New Jersey allows for delays if the borrower needs more time to get the mortgage reinstated.
If the foreclosure sale moves forward but the sale amount doesn't cover the mortgage balance, the lender can sue the homeowner for the difference, which is known as a deficiency. The lender must file for a deficiency judgment within three months of the sale. The amount of deficiency awarded is at the court's discretion. The court can opt to limit the deficiency to the difference between the debt amount and the fair value of the home.
New Jersey gives homeowners a short redemption period, which is a time when the homeowner can pay off the loan in full to keep the property. In most cases, the redemption period is 10 days. The exception to this occurs when the lender seeks a deficiency judgment. In that case, the homeowner has six months to redeem the property.
There are a lot of considerations for homeowners facing foreclosure. Working with a foreclosure lawyer can help homeowners to fully understand their rights and options. Seeking help quickly is necessary in New Jersey because the timeframe for foreclosure is 60 day to 270 days.