Step 1: Pre-foreclosure

Notice of Intent to Foreclose

Required by the New Jersey Fair Foreclosure Act, N.J.S.A. 2A:5—56, a notice of intent to foreclose must be served to the delinquent homeowner by the mortgage holder no less than 30 days before filing a foreclosure complaint with the court. It must contain the outstanding amount, the date by which it must be cured before foreclosure proceedings are filed, the contact details of the lender, options for aid through NGOs or state and federal assistance programs, the right to seek legal council both through a private attorney or the New Jersey Bar Association or other similar organizations, the reason for foreclosure, details of what will follow if the debt is not cured, and a statement that the owner may sell or transfer the property during foreclosure proceedings.

Step 2. Foreclosure

Foreclosure Complaint

The complaint is personally handed to the borrower, but it may also be served on any other parties who could have a legal stake in the property, including a spouse or tenant. It is crucial for delinquent borrowers to be served, as the lender may ask the court to do so via newspaper publishing, which would prevent them from receiving key notices about the foreclosure process and their ownership of the property.

Contested and Uncontested Foreclosures

According to New Jersey law, a homeowner who has been served with a complaint of foreclosure has 35 days to respond, beginning on the day the papers were received. In order for the courts to recognise the process as a challenged foreclosure, the response must include unbiased and legally sound explanations for the homeowner’s becoming late. However, the majority of foreclosure cases in New Jersey are deemed uncontested by the courts, which means that the court has not found any reason to object to a lender foreclosing on a defaulted mortgage. The mortgage holder or servicer will receive an entry of default if a late borrower decides not to respond within the allotted 35 days. This will permit the foreclosure to go uncontested, but the defaulting borrower may still seek additional foreclosure attempts.

The Foreclosure Judgement

The mortgage holder’s next move after an uncontested foreclosure is to ask for a final judgement against the defaulting borrower. The final judgement application is often mailed to the defaulting property owner in addition to being filed with the New Jersey Office of Foreclosure at the county court where the property is located. One final notification informing the homeowner of their rights and that they will forfeit their property rights if a final judgement is issued is delivered to them before the application is submitted to the court.

Writ of execution

The homeowner has one more opportunity to pay off their amount in the notification that comes before the notice of final judgment. The delinquent borrower may be permitted to cure the default through a payment plan lasting between 36 and 60 months if a final judgment is rendered but they are eligible for Chapter 13 bankruptcy or Chapter 11 protection. However, after a final decision, the majority of foreclosure proceedings in New Jersey proceed to a writ of execution. The County Sheriff will have the legal authority to sell the property at a sheriff’s sale if the mortgage holder’s request for a writ of execution is granted.

Step 3. The Foreclosure Auction

Pre-sale

A sheriff’s sale may be conducted if the mortgage holder has obtained a final judgement against the defaulting borrower and a warrant of execution. Court orders must be delivered to the defaulting owner together with a notice of the sale date, and the property must be listed for sale for a minimum of four consecutive weeks in a local newspaper of general distribution. The homeowner does, however, have the legal authority to ask the sheriff’s office for two two-week sale adjournments. Only the filing of a bankruptcy petition by the owner, consent from the mortgage holder, or a court order permits further adjournments.

The sheriff’s sale

After the “gavel has fallen” at the sheriff’s sale, according to New Jersey law, a homeowner’s claim to ownership of a foreclosed property is lost. This means that once a sale is made at the foreclosure auction, the homeowner forfeits any right to redeem or cure the debt. The owner does have ten days to protest the sale, but the requirements are difficult to achieve. They also have ten days to redeem the property by paying the full amount of the foreclosure judgement plus the sale costs. However, the borrower is entitled to the difference if the house sells for more than what is owed to the lender.

Deficiency judgement

The foreclosure case doesn’t ask for any further damages; it merely asks to get back the property that is linked to the mortgage. But when the sale price of the property is less than the existing debt, the state of New Jersey does permit lenders the legal option to pursue a deficiency judgement against defaulting debtors. However, when it comes to past-due mortgages backed by the debtor’s residence in New Jersey, this rarely occurs.

Step 4. Foreclosure eviction

After a sheriff’s sale has taken place and the 10-day window for protesting the sale has expired, ownership of the property is transferred to the buyer, who may then compel the previous owners to leave the premises. The new owner has the right to evict the previous owner if they refuse. Eviction orders must be enforced within two weeks, but they may take up to 90 days if the court decides the former owner needs more time to find new housing.