Facing foreclosure in New Jersey: process, mediation and timelines

How foreclosure works in New Jersey

In New Jersey, a lender can't simply schedule an auction. Every foreclosure is a court case handled by the Superior Court's Office of Foreclosure and, if it's contested, a General Equity judge in the county where the property is. That process takes time and gives homeowners several points where they can respond, negotiate or cure.

The main law protecting homeowners is the Fair Foreclosure Act. It covers residential mortgages and sets notice rules, the right to cure, and time limits for lenders.

Step one: the Notice of Intention to Foreclose

Before a lender can accelerate the loan or file a foreclosure complaint, N.J.S.A. 2A:50-56 requires a written Notice of Intention to Foreclose. It must be sent by registered or certified mail, return receipt requested, at least 30 days but not more than 180 days before the lender files. If more than 180 days pass without a filing, the lender has to send a new notice.

The notice must spell out the default, the amount needed to cure as of a stated date, a deadline to cure at least 30 days out, who to pay, your right to cure even after a lawsuit is filed, information about financial help, and the option of court mediation and free housing counseling. Compliance with these rules has to be pleaded in the foreclosure complaint, so a defective notice can matter.

The court case, start to finish

Here is the general timeline the NJ Courts describe. Real cases often take longer, especially if they're contested or go to mediation.

• Complaint: after the notice period, the lender files with the Office of Foreclosure and serves you with a summons and complaint, which include mediation information.
• Answer: you have 35 days to file an answer if you want to contest. The filing fee for an answer is $175, and fee waivers are available if you qualify.
• Uncontested cases stay with the Office of Foreclosure. Contested cases go to a judge in the county where the property is.
• Default and final judgment: the lender must give you a last chance to cure 14 days before requesting default. Final judgment and a writ of execution can follow.
• Sheriff sale: the sheriff generally has 150 days from the writ to sell. Homeowners and lenders can each request two adjournments, and a fifth is possible if both agree.
• Redemption: after the sale, you generally have 10 days to redeem by paying off the debt or selling.

Your right to cure

Under N.J.S.A. 2A:50-57, you can generally cure the default and reinstate the mortgage any time up until the court enters final judgment. To cure, you pay everything that would have been due if you hadn't defaulted, plus contractual late charges and court costs and attorney's fees within the limits of the court rules. You can use this right only once every 18 months, unless you cure by the deadline in the original notice.

Curing is different from a loan modification. A cure brings the loan current under its existing terms. A modification changes the terms and requires the lender's agreement.

The Foreclosure Mediation Program

The New Jersey Judiciary runs a free Foreclosure Mediation Program. To qualify, you generally must have been served with a foreclosure complaint, be an owner-occupant of a one to four family home that is your primary residence, not be in bankruptcy, and work with a HUD-certified housing counselor. You can find a counselor through the NJ Housing and Mortgage Finance Agency.

Request mediation within 60 days of receiving the summons and complaint by returning the Mediation Request Statement to the Superior Court Clerk's Foreclosure Mediation Unit. After 60 days, you need to file a motion to be let in. Mediation does not stop the lender from moving forward on its own, so if you dispute the lender's claims you may still need to file an answer, and if a sheriff sale is scheduled you need a motion to stay it.

Deadlines on the lender's side

Lenders face limits too. For residential mortgages signed on or after April 29, 2019, N.J.S.A. 2A:50-56.1 bars a foreclosure filed more than six years after an uncured default, six years after the maturity date, or 36 years after recording (for loans of 30 years or less), whichever comes first. Older mortgages may follow different rules.

After a sheriff sale, if the sale price doesn't cover the debt, a lender that wants to sue for the shortfall (a deficiency) generally must start that action within 3 months of the sale under N.J.S.A. 2A:50-2. If the sale brings in more than is owed, you may be entitled to the surplus.

Court fees and where to get free help

According to the NJ Courts, filing an answer or first appearance in a foreclosure case costs $175, and motions cost $50. If you can't afford the fees, you can ask the General Equity judge in your county for a waiver using the Filing Fee Waiver Request Form. The court publishes self-help packets on answering a complaint, filing motions and asking to stay a sheriff sale.

Free and low-cost help is available. The NJ Housing and Mortgage Finance Agency (609-278-7508) can connect you with a HUD-certified housing counselor, which is required for mediation. The Superior Court Clerk's Customer Assistance Center is at 609-421-6100. Legal Services of New Jersey runs a statewide hotline at 1-888-576-5529 for people who qualify.

Beyond mediation, a housing counselor or lawyer can walk you through other paths, like a loan modification, a repayment plan, refinancing, selling the home yourself, or a bankruptcy filing. Which one fits depends on your income, how far behind you are, and whether you want to keep the house. If you rent the property to tenants, the court also publishes a notice explaining tenants' rights during a foreclosure.