New Jersey Foreclosure Laws
Judicial Foreclosure Available: Yes
Non-Judicial Foreclosure Available: No
Security Instruments: Mortgage
Right of Redemption Period: 10 Days
Deficiency Judgments Allowed: Yes but with Restrictions
Time Frame: Typically 90 Days
Public Notice: Complaint
New Jersey is considered to be a lien theory state, which means that a borrower’s property serves as security for their loan. A title in New Jersey is secured by a document called a mortgage. If the borrower does not pay their mortgage on time or defaults completely, they may have their property foreclosed. New Jersey foreclosure law only allows for judicial foreclosure processes.
The state has a ten (10) day right of redemption period, which allows the borrower to reclaim their property after it is foreclosed by paying the default plus any additional costs, but the time frame may vary depending on whether a deficiency judgment is entered. The state does allow for deficiency judgments but there is a “Fair Market Credit” doctrine in place in which the borrower is given credit for the fair market value of the property regardless of what it sold for at auction. All deficiency actions must be brought before court within three (3) months of the foreclosure sale.
Types of Foreclosures Allowed in New Jersey
New Jersey statute allows for only judicial foreclosure on defaulted property. This type of foreclosure, also known as foreclosure by judicial sale, involves selling the defaulted property under court supervision. In order for a judicial foreclosure to be possible, no power of sale clause may be present in the loan documents.
To start the process, a lender must sue the borrower in a court with jurisdiction over the county where the property is located. The court will then decide the amount of the borrower’s debt and will give them a time frame to satisfy the default. If the borrower cannot pay off their loan, the property will be sold at auction.
In New Jersey, the following guidelines must be followed with judicial foreclosure proceedings:
1. The lender must notify the borrower of the foreclosure sale at least ten (10) days prior to the sale.
2. The foreclosure notice must be posted in the property’s local county office.
3. The notice must also be published in two (2) newspapers that circulate where the property is located.
4. The foreclosure sale must be conducted by the county sheriff or other county officer. The winning bidder at the auction must pay all settlement charges within thirty (30) days of the sale date or the sale may be declared null and void.
5. The lender has three (3) months following the sale to request a deficiency judgment. If a deficiency judgment is entered, borrowers will have six (6) months to redeem their property. If no deficiency judgment is filed, borrowers have only ten (10) days to claim their property before the sale is confirmed.
Working with a Foreclosure Lawyer in New Jersey
The current stagnant state of the nation’s economy has affected hundreds of thousands of Americans. Many homeowners have fallen behind on their mortgage payments or have received a notice of foreclosure because they can no longer afford their bills. Between suffering from pay cuts and job losses, the number of mortgagors in default has risen dramatically. Although receiving a notice of foreclosure may be frightening, there is still a way to stop it. If you are a mortgagor in New Jersey and are either behind on payments or have already received a notice of foreclosure, turn to a skilled team of foreclosure attorneys in New Jersey to fight for your rights and prevent the repossession of your property.
Foreclosure lawyers commit themselves to you and do whatever it takes to make sure you don’t lost your home. They will review your current financial situation and create a plan of action to present to your lender in lieu of foreclosure. Your foreclosure attorney might suggest mortgage modification, short sale, refinancing or even a temporary halt in payments. Since the process of filing for foreclosure actually costs the lenders money, if your paralegal comes up with an adequate plan, chances are in your favor that your lender will agree.
Regardless of your reason for defaulting, you have rights as a homeowner in New Jersey. Speak to a leading New Jersey foreclosure lawyer today to discuss your options and file a claim. With the help of an acclaimed paralegal, you will prevent your home from being repossessed. Rest assured that your case will end with the best possible outcome when you work with an acclaimed New Jersey foreclosure attorney.