Many distressed home owners are full of questions and ask me things all the time such as; Malik, Can They Come after me if I let it go into Foreclosure or short sale? how long does the process take? will I have to move out soon? and although technically these question should be answered by an attorney here is some info about how the foreclosure process works here in NJ.
Before you understand how the foreclosure works you must first know a little about our states policies.
How are mortgage liens treated in New Jersey?
New Jersey is known as a lien theory state where the property acts as security for the underlying loan. The document that places the lien on the property is called a mortgage.
How do I know when I am in Foreclosure status?
At least 30 days before starting the foreclosure process, the lender mails a letter to the borrower warning of the impending foreclosure. During this pre-foreclosure period, the borrower can prevent the foreclosure by paying off the amount in default.
The lender initiates the foreclosure through the courts and records a lis pendens (notice of pending lawsuit) with the county clerk. The lender can sue for either the default payments or the entire unpaid principal balance on the loan. The borrower is notified of the foreclosure action in person or by publication if necessary. After being notified, the borrower has at least 35 days to respond or the court will make a ruling. If the court rules against the borrower, a sale date will be scheduled.
There are many legitimate reasons why borrowers may find themselves in default (loss of employment, sickness, death of a co-borrower, etc.). It is the borrower's best interest to contact the institution servicing their mortgage and explain what the issue is before they are more than thirty days default on a payment. It is strongly recommended that you notify the institution by sending it a certified letter to the appropriate area and then following it up with a telephone call. Most companies have specific units that handle these types of matters.
As a borrower you can request that the institution consider modifying the mortgage loan terms. An example would be the company allowing the borrower to refinance at no or low cost to obtain a lower interest in order to be able to continue making their monthly payments. If you can not make any payment and believe that this can be rectified within a reasonable amount of time, you can request that the institution provide you with a period of forbearance. This would give you the opportunity to address the financial hardship and then begin making your regularly scheduled payments. The institution would then apply the missed payments to either the end of the loan or to be due in full at a later date.
If you and the institution can not agree on a specific type of loan modification or if your request for forbearance is denied you should immediately contact legal counsel for assistance along with an experienced Realtor in the event you decide to sell. When selecting an attorney, be sure to obtain the services of someone who has experience dealing with foreclosure cases and understands your rights pursuant to the
How long does it take to foreclose on a property in New Jersey?
Depending on the court schedule, it usually takes approximately 250 days or more to effectuate an uncontested foreclosure. This process may be delayed if the borrower contests the action, seeks delays and adjournments of hearings, or files for bankruptcy. New Jersey has one of the longest wait times for foreclosures. A defendant has 35 days in which to file an answer to a foreclosure complaint otherwise default will be entered. Once default is entered the plaintiff must wait another 45 days before entering final judgment and thereafter a writ of execution is issued and delivered to the Sheriff to effectuate the foreclosure sale process. The defaulting borrower must be given at least 10 days notice before the foreclosure sale can take place. I have found that it takes months before an actual sale takes place but the above mentions the actual timeline in which they have to execute.
Once there is a Foreclosure sale; can I get the property back at any point?
New Jersey has a statutory right of redemption, which allows a party whose property has been foreclosed to reclaim that property by making payment in full of the sum of the unpaid loan plus costs. There is a time limit of only ten (10) days to undertake such redemption after the foreclosure sale.
Does New Jersey Allow deficiency Judgements?
Yes. A deficiency judgment may be obtained when a property in foreclosure is sold at a public sale for less than the loan amount which the underlying mortgage secures. This means that the borrower still owes the lender for the difference between what the property sold for at auction and the amount of the original loan. New Jersey however has a "Fair Market Credit" doctrine set forth under N.J.S.A 2A:50-3 which is a safeguard against low or minimal bids which may give rise to a windfall in the event of a deficiency proceeding. Under this doctrine the defaulting borrower is given credit for the fair market value of the property regardless of what the bid at the foreclosure sale was. This is however an affirmative defense which must be raised in a deficiency proceeding. Deficiency actions must be brought within three (3) months of the foreclosure sale.
How does NJ foreclosure laws stack up against other states?
Where can I get help?
There are many places to get help, Contact us anytime at 973.996.8626 email us anytime at njcdpe@gmail.com or visit us on the web at http://www.NJSHORTSALEHELP.INFO . Together we can help home owners one household at a time.
*this is no way legal or tax advice, please consult a licensed Attorney and Accountant with any questions.
...OK I guess y'all get the idea...in any event I listed this property in August of 2009 and it was what I would call a Battle of Epic Proportions (Good vs Evil) with the lender (B of A) to get it closed. After 15 months of fighting, It actually closed....It was truly a Christmas present for me and most importantly the seller!!!
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