For homeowners facing foreclosure in New Jersey, the following is a summary of the state’s foreclosure laws:
Foreclosures in New Jersey can be judicial, meaning the bank must file a lawsuit in court in order to foreclose.
Nonjudicial foreclosures are not allowed in New Jersey.
New Jersey law requires five notices:
- Before starting the foreclosure process, the bank must send the homeowner a notice of intention to foreclose that allows at least 30 days to cure the default.
- The bank initiates the foreclosure process by filing a lawsuit in court and giving notice of the suit by serving the homeowner with a summons and complaint. The homeowner gets 35 days to answer.
- Along with the complaint and summons, the homeowner will also get a notice about New Jersey’s Foreclosure Mediation Program.
- If a defaulting homeowner does not respond to a foreclosure suit, the bank can apply for a foreclosure judgment. The bank must send the homeowner a notice 14 days before applying for the final judgment that gives the homeowner one final chance to cure the default.
- If the homeowner responds to the notice within 10 days, saying they plan on curing the default, the bank must allow an extra 45 days for the homeowner to cure the default before entry of final judgment.
- The bank must send notice of the foreclosure sale to all parties that have appeared in the action and the homeowner at least ten days before the sale. The sheriff will post a notice of sale on the property and in the sheriff’s office. The notice will be also published in two local newspapers.
New Jersey allows the foreclosure of certain homes without a public sale through an optional foreclosure procedure, which can be applied if the following criteria are met:
- The property is abandoned
- The defaulting homeowner signed a deed in lieu of foreclosure
- There is no equity in the home.
These types of foreclosure grant the bank an order of redemption from the court which gives the homeowner between 45 and 60 days to redeem the total debt owed on the mortgage. Within 20 days of the order, the homeowner will be served notice of the order, which includes information about the optional foreclosure procedure. It will also inform the homeowner of the conditions necessary to request a public sale instead, and let them know that they must request a public sale within 30 days.
New Jersey Foreclosure Protections
New Jersey law provides protections in accordance with the federal Service Members Civil Relief Act.
New Jersey law also states that a service member can postpone court proceedings and that the period of military service is not included in the redemption period. The law applies to service members on federal active duty or in state military service by order of the governor.
Reinstatement and Redemption
In New Jersey, a homeowner can cure a default at any time until a final court judgment. Yet if the homeowner cures the default before the deadline in the notice of intention to foreclose, and defaults again in the future, they will be allowed to cure the default again. However, if they cure the default after the deadline in the notice has ended, they will stop the foreclosure but will not be allowed to. cure the default in a second foreclosure proceeding during the next 18 months.
In New Jersey, the defaulting homeowner can redeem the home in the following circumstances:
- The homeowner can redeem up until the court confirms the sale. After the foreclosure sale, the homeowner has ten days to file a motion objecting to the sale. After this, the court must confirm the sale to finalize it.
- The New Jersey Supreme Court has determined that foreclosed homeowners get the right to redeem:
- within the 10-day period after the sale
- if objections are filed under the rule before the court confirms the sale
- if the bank gets a deficiency judgment, a foreclosed homeowner can sue for redemption within six months of a deficiency judgment
In New Jersey, the bank can sue for a deficiency judgment within three months of the foreclosure sale or, if confirmation of the sale is required, from the date of the confirmation of the sale. However, if the bank is awarded a title to the property through an optional foreclosure procedure, it cannot request a deficiency judgment.
The homeowner can also contest the amount of deficiency owed by responding to the deficiency suit and presenting evidence regarding the property’s fair market value. The court will then decide the amount of the deficiency by subtracting the fair market value of the home from the outstanding debt. However, if the amount of the deficiency is challenged, the homeowner will lose the right to redeem.
If the foreclosed homeowners do not leave after the foreclosure, the new homeowner can request a writ of possession from the court. The sheriff will then executes the writ. For information regarding how to avoid foreclosure in New Jersey, visit HUD.gov.