New Jersey Foreclosure Process

Link to New Jersey Foreclosure Laws

A New Jersey foreclosure is administered through the court system making it a judicial foreclosure state. The foreclosure process takes about nine months.

Foreclosure Overview

A New Jersey foreclosure is administered through the court system making it a judicial foreclosure state. The foreclosure process takes about nine months.

From the NJ.gov Site:

The foreclosure process in New Jersey is a two-tiered system involving both Superior Court General Equity judges and the staff of the Office of Foreclosure. The Office of Foreclosure is a unit in the Superior Court Clerk’s Office. The Office of Foreclosure handles seven types of foreclosure actions:

  1. residential mortgage foreclosure;
  2. multi-family/ commercial mortgage foreclosure;
  3. in personam tax certificate foreclosure;
  4. municipal in rem tax certificate foreclosure;
  5. condominium lien foreclosure;
  6. strict foreclosure (to remedy foreclosure action errors) and
  7. Fair Foreclosure Act optional foreclosure procedures.

Pre-foreclosure Period

A minimum of 30 days before starting the foreclosure process, the lender must mail a letter to the borrower warning of the coming foreclosure. During this pre-foreclosure period, the borrower can prevent the foreclosure only by paying off the amount in default.

The lender initiates the foreclosure through the courts and records a lis pendens, (LIS), a 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. Usually at this point they go for the entire amount.

The borrower is required to be notified of the foreclosure action in person or by publication if necessary. Once notified, the borrower has 35 days to respond or the court will make a ruling. When the court rules against the borrower, a sale date will then be scheduled.

Notice of Sale & Auction

Notice of Sale, (NOS), must be posted on the property as well as in the county office where the property is located. In addition, the Notice of Sale must be published in two local newspapers. One of these publications must be further located (or published and available) in either the largest municipality in the county or the county seat.

Notice must be given to the property owner a minimum of 10 days prior to the scheduled sale.

Foreclosure sales are conducted as public auctions, overseen by the sheriff or another officer of the county. The property is awarded to the highest bidder, and payment is due that day.  The sheriff transfers ownership to the purchaser within 10 days following the sale. The court must confirm the sale.

The borrower has redemption rights during the 10 days following the sale and any objections are considered by the court during that time.

 

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