Introduction to Foreclosure
With all of the uncertainty in the current real estate market, I felt now would be a good time to start update and refresh our Foreclosure focused content to keep our readers educated and up-to-date. In this article, we’re going to go over the entire foreclosure process in New Jersey so you can get a better understanding of what the foreclosure process is and how each of the pieces interrelate to the overall process.
Let’s start by defining what foreclosure even is!
What even is Foreclosure?
When a borrower is unable to make their mortgage payments and the lender seizes the property, this is known as the foreclosure process in New Jersey. It can be a difficult and confusing process, so it’s critical for homeowners to really understand the steps and their rights at every stage.
What is the Notice of Default?
The notice of default is the first step in New Jersey’s foreclosure process. This is a formal notice that the lender is going to begin the foreclosure process because the borrower has fallen behind on their mortgage payments. Normally, the notice of default is posted on the property and sent by certified mail. The homeowner has a set amount of time, typically 30 days, to correct the default. The lender may begin the foreclosure process if the homeowner is unable to correct the default.
What is the Notice of Sale?
The notice of sale is the following stage in the foreclosure procedure in New Jersey. This is a formal announcement from the lender that the house will be auctioned off to the public. Ordinarily, the notice of sale is posted on the property and made public in a newspaper or online channels. The homeowner has a predetermined period of time, typically 30 days, to redeem the property. The home will be sold at a public auction if the owner is unable to redeem it within the 30 day timeframe.
What is a Public Auction in the Foreclosure Process?
In New Jersey, the foreclosure process ends with the sale of the property at a public auction. Ultimately, the property is sold to the highest bidder at the auction. The remaining mortgage debt is settled with the proceeds from the auction sale. If the property is not purchased at the auction, the lender will then be forced to keep the property. Note: Banks are not in the business of owning real estate so this is not the outcome they would want.
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What Are Some Options that I Have if I think Foreclosure is Possible?
So we’ve discussed the overall process relating to foreclosure in New Jersey but let’s talk about some options you may have if this is a situation that you are facing.
Mediation During Process
It’s crucial to remember that homeowners in New Jersey have the right to ask their lender for mediation before a foreclosure sale. The New Jersey Foreclosure Mediation Program is a voluntary program with the aim of assisting borrowers and lenders in reaching an amicable agreement. An impartial third party will mediate between the homeowner and the lender in an effort to come up with a plan that will let the homeowner keep their house.
Challenging the NJ Foreclosure Process
In New Jersey, Homeowners also have the option of going to court to challenge the foreclosure. The foreclosure process can be stopped if the homeowner files a lawsuit in the New Jersey court system and claims that the lender did not follow the correct procedures as required by law. This does not happen often, but it does happen so it is super important to save all documentation and correspondence that you have had with the bank.
Navigating the Overall Timeframe of the NJ Foreclosure Process
It’s significant to remember that the New Jersey foreclosure procedure may take several months or even years to complete. The homeowner is still in charge of keeping the house up to date and paying the property taxes during this time. The owner might be permitted to remain in the home until the sale is complete if the property is sold at the open auction.
Hiring a Lawyer for the NJ Foreclosure Process
Homeowners facing foreclosure must consult a housing counselor or legal professional for guidance. They can help you better understand the rules and laws pertaining to foreclosure specifically in New Jersey as well as offer guidance and support throughout the process. They can aid homeowners in investigating alternatives to foreclosure, including loan modifications, short sales, and others.
Final Thoughts on the Foreclosure Process in New Jersey
In conclusion, the New Jersey foreclosure procedure can be a difficult and perplexing one. It’s crucial for homeowners to really understand the process and procedures as well as their rights at every stage of the process. Homeowners have the option to ask for mediation and file a lawsuit to stop the foreclosure. A housing counselor or legal expert can offer support and help homeowners explore their options to prevent the foreclosure process. Homeowners should also be aware that the NJ foreclosure procedure can take several months or even years, and that during that time they are still in charge of upkeep and tax payments.
If you or someone you know is going through the NJ Foreclosure process and would like an offer to potentially avoid going through foreclosure, please reach out to us at (732) 456-7580 or fill out the form today to speak with one of our Home Buying Specialists for more info.
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