New Jersey’s Mortgage Foreclosure Diversion Program

If you are facing a home foreclosure in New Jersey, you should be aware of any New Jersey laws that have been implemented to help people facing foreclosure. It is possible for homeowners whose homes are being foreclosed upon to mitigate financial losses and extend the time that they have to negotiate a loan modification. New Jersey residents facing foreclosure should also be aware of all legal remedies that allow them to recover a home after it has been sold as part of a sheriff’s sale.

The New Jersey home foreclosure attorneys at Young Marr & Associates are available to help homeowners enter into mortgage foreclosure diversion programs while making sure that their rights are respected throughout the process. For a free and confidential legal consultation, get in touch with Young Marr & Associates today by calling (215) 701-6519.

The New Jersey Foreclosure Process and Diversion Program

The New Jersey foreclosure process begins after a homeowner fails to pay their mortgage and ends up defaulting on their loan. Lenders may contact homeowners that have defaulted by either letter or phone to let them know that their mortgage payments are late.

After a homeowner has defaulted on their loans, they will receive a Notice of Intention to Foreclose, usually after three late mortgage payments. This notice precedes the official foreclosure filing and will give the homeowner 30 days to catch up with their late payments. The New Jersey Fair Foreclosure Act requires lenders to send this notice to homeowners. If you are able to address the default by paying everything that you owe, then the lender must accept your payment and is unable to charge attorney’s fees to the homeowner.

Following the Notice of Intention to Foreclose, the lender will have to file a complaint with New Jersey’s Office of Foreclosure. After doing so, the homeowner will be regarded as the “defendant” and the lender or company filing the complaint will be known as the “plaintiff.” This notice must be served to you in person by the lender, along with a summons to appear in court for a hearing. The foreclosure complaint will also include information about participating in a mediation program, to which the homeowner will have 60 days to respond. Homeowners facing foreclosure should note that agreeing to mediation does not stop the foreclosure from happening.

After the foreclosure has been filed and served by the lender, the homeowner will have 35 days to answer by filing a legal response in a formal document. This answer must deny or admit to the assertions made in the foreclosure complaint.

The answer to the foreclosure complaint is also a homeowner’s opportunity to defend themselves. A valid defense will entail citing reasons why the lender’s claim against the homeowner is not valid. If the homeowners defend themselves, then the case will be transferred to the superior court close to the homeowner’s home and will be assigned a judge and a trial date.  If the answer you file does not make any valid arguments to oppose the allegations made in the complaint, the foreclosure will proceed.

If you do not answer the complaint and are unable to repay the debt that you owe, the court can issue a writ of execution, which will order the sale of your property. A notice that contains information about the date and time of the sale must be sent to the homeowner.

After a homeowner receives notice of the sale of their property, they have 10 days to file a motion objecting to the sale. New Jersey provides homeowners with the right to redeem or recover their foreclosed property after the property sale has been executed. However, this requires paying the full amount of the judgement as well as interest, costs, and reasonable expenses incurred by the purchaser, including taxes, liens, assessments, and repairs.

New Jersey’s Federal and State Foreclosure Laws

Federal and New Jersey state laws exist to protect homeowners who are unable to pay their mortgages due to difficult circumstances. These laws prevent lenders from committing actions that amount to abusive, erroneous, wrongful, or fraudulent practices. Foreclosure laws can also protect homeowners by giving them time to prepare for a loan modification with their lender, conduct short sales, or pay all of the loan payments they owe up to the current one.

New Jersey state laws regarding foreclosure include:

• The Fair Foreclosure Act, which provides the rules that lenders are required to follow during a foreclosure
• The Consumer Fraud Act, which serves to protect consumers from fraudulent practices
• The Truth In Consumer Contracts, Warranty, and Notice Act, which protects borrowers by prohibiting lenders from including provisions that violate legal rights in contacts, warrants, or notices

Federal laws regarding foreclosure include:

• The Truth In Lending Act, also known as “TILA” or Regulation Z, which determines that disclosure of credit terms is a protected legal right, meaning that consumers are entitled to information about bad credit decisions
• The Real Estate Settlement Procedures Act, also known as “RESPA,” which requires specific disclosures and procedures be made during mortgage loan applications, settlements, and servicing

Mortgage Foreclosure Experts Serving New Jersey Homeowners

A foreclosure attorney from Young Marr & Associates can help homeowners protect themselves against the unjust conduct of lenders and assist them as they enter into a mortgage foreclosure diversion program. The experienced and professional attorneys from Young Marr & Associates can help owners make informed decisions regarding the future of their homes. Contact them today at (215) 701-6519.