Facing Foreclosure in NJ and Want to Keep Your Home?
Keeping your home during a foreclosure is possible. Here’s how…
Not all foreclosures have to end in the homeowner losing their home. Most homeowners going through foreclosure don’t know all of their options, and it’s not your fault. In some cases you may be able to stop foreclosure, or if you’re not quite in foreclosure but heading there… we may be able to help you avoid foreclosure.
There is a lot of mis-information out there about foreclosure so here’s how foreclosure in NJ works.
How the Foreclosure Process in NJ Works
Steps to the NJ Foreclosure Process
Step 1: You fall behind on your payments.
When you miss one mortgage payment or breach your loan agreement in some other way, such as failing to obtain mandatory insurance, you are in default. The lender is usually not allowed to initiate a foreclosure action unless you have been late on your mortgage for more than 120 days. The lender must follow specific requirements before filing a lawsuit for foreclosure in New Jersey, including providing you with loss mitigation options. Those choices include loan modifications, which may include a change in loan terms such as a lower interest rate, a longer payback period, and the ability to resume making mortgage payments; short sales, and deeds in lieu of foreclosure.
Step 2: You must receive a Notice of Intention to Foreclose from the lender.
Before the lender may file a foreclosure lawsuit in New Jersey, they must first send you a Notice of Intention to Foreclose. This Notice must be issued by ordinary and certified mail, return receipt requested, at least 30 days before they submit the complaint, but no later than 180 days. This Notice is the initial step in the legal process. The Notice must include a variety of details, such as the reason for the default and the amount you must pay to rectify it (pay what you owe and stop the foreclosure).
If you can repay the missed installments and cure the default, the lender is required to accept your payment and is not permitted to refuse it. The lender is also not allowed to charge you attorney fees at this time.
Step 3: The lender files a Foreclosure Complaint with the court, which initiates the legal process.
The lender or their representative can file a foreclosure complaint if the homeowner does not remedy the default within 30 days of receiving the Notice of Intention to Foreclose. The judicial process begins with the filing of a foreclosure complaint. The lawsuit explains why the lender believes they have a legal right to foreclose and asks the court to grant them possession of your home under the terms of the mortgage.
The Plaintiff is the lender or mortgage servicer who files the Complaint, and the Defendant is the homeowner who is being sued. The Complaint is open to the public. You’ll probably start getting advertisements from attorneys and other parties once it’s been filed.
Many of these advertisements will be offering foreclosure services in NJ and claiming to be able to rescue your property. Learn more!! Many of these businesses are foreclosure rescue con artists who take your money but do nothing to assist you. You will want to work with a reliable company like Helios Buys NJ.
Step 4: Your are Served With A Formal Summons & Foreclosure Complaint
A copy of the Summons and Foreclosure Complaint must be personally delivered by the lender to you. If you can’t be served in person, the lender will serve you by mail or by publication in a local newspaper with court authorization.
New Jersey has a foreclosure mediation scheme in place to assist homeowners in saving their homes from foreclosure. You must request mediation within 60 days of receiving the Complaint if you wish to participate in the New Jersey foreclosure mediation program. It’s crucial to note, however, that mediation does not prevent a foreclosure in New Jersey from beginning.
Step 5: Responding To The Foreclosure Complaint with the NJ Courts
A homeowner has the right to defend himself or herself against a foreclosure action. This is accomplished by submitting an Answer to the Court. The Office of Foreclosure receives the Answer and evaluates it to determine if it is a non-contending or a contesting answer. When an Answer does not present any legal defenses to the foreclosure action, it is termed non-contesting. For example, a non-contesting answer would be one that describes a financial problem that resulted in missed payments. The foreclosure will continue as if the Answer was not filed if the Court deems that it is non-contesting. In New Jersey, you are given 35 days to file an Answer with the courts.
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Step 6: Entry of Final Judgment and Notice of Entry of Default
The mortgage lender might ask the court to enter a default if no answer is filed within 35 days of being served with the summons and complaint. The lender can ask the court to enter a final judgment of foreclosure in NJ if the lender is in default.
Step 7: Submit a Notice of Request for Entry of a Final Foreclosure Judgment
The entry of final judgment is the next step in the procedure once the case is ruled non-contested. The lender must send a Fair Foreclosure Act Notice to the homeowner 14 days before filing a request for the court to enter a final judgment of foreclosure in New Jersey, providing the homeowner one last chance to pay the missed payments and cure the default. This is the last chance for the homeowner to do so. If you believe you have a reasonable chance of curing (paying your debts and stopping the foreclosure), you must react with a Good Faith Statement within 10 days of receiving the notice of Fair Foreclosure Act Notice from the Lender. You will then have 45 days to cure the default from the date of receipt of the written notification.
Step 8: The Lender’s Request for Final Judgment Entry
If you do not cure the default within the allotted time, the lender will file a move with the court asking for a Final Judgment in favor of the lender. The lender has the right to foreclose on the property once the lender receives the Final Judgment. The homeowner retains his or her right to contest the amount owed.
Step 9: The Lender Receives a Final Decision
When a lender receives a final judgment, it is no longer required to allow you to settle the arrears (money outstanding) and restore the loan; instead, it can demand that you pay the full amount of the final judgment. The Court will issue a writ of execution, which directs the Sheriff to carry out the final verdict and sell the house at an auction.
Step 10: The Sheriff’s Sale Process
When the lender receives a final judgment, the court also issues a Writ of Execution, which directs the County Sheriff to sell your home at auction to the highest bidder. The length of time it takes for the sale to be planned is determined by the Sheriff’s workload, which varies per county. When your residence is scheduled to be auctioned, you will receive a notice. A newspaper notice will also be published.
The Sheriff Sale can be postponed two times by the homeowner.
If your house is slated for a Sheriff’s Sale, you can petition in person to the County Sheriff for two 30-day sale delays. Adjournments or stays are the terms used to describe the delays. For this stay, you must pay a charge to the Sheriff’s office. The grounds for requesting a Sheriff Sale adjournment are to allow you to stay in the property longer while you look for a new home or, if a sale is possible, to give you more time to finalize the sale.
Step 11: What Happens After A Sheriff Sale in NJ?
Is it possible to reclaim my property after the Sheriff’s Sale?
The homeowner has 10 days after the Sheriff’s sale to redeem the property (get the property back). You must pay the whole amount of the foreclosure judgment, as well as certain other due amounts, to redeem the property. You have an extra 60 days to redeem the property if you file bankruptcy after the sheriff’s sale.
Will You Owe Money After a Sheriff Sale in NJ?
The borrower is entitled to the difference if the house sells for more than the amount owed to the lender. If the house sells for less than the foreclosure judgment, the lender has the right to sue the homeowner for the difference. In New Jersey, however, this is uncommon.
When Do I Have to Leave After a Sheriff Sale?
The Sheriff Sale is the final step in the foreclosure process in New Jersey. To compel the homeowner to vacate the property, the new owner will need to obtain a Writ of Possession. They can’t simply lock you out of your home. The Sheriff will be able to evict you from the property using the Writ of Possession. If you received an auction date for a sheriff sale on your home in NJ, you still have time to sell your home cash and avoid foreclosure!
There are options that could help you stay in your home if your situation qualifies.
Fill out the quick form below and we’ll set up a Foreclosure Prevention Counseling Session with you and one of our foreclosure experts. The session is free. We’ll find out about your specific situation, give you some education to help you better navigate the foreclosure process successfully, and lay out your options so you can make a well informed decision.