Falling behind on a mortgage can be frightening. For New Jersey homeowners, receiving a foreclosure notice, summons, or complaint can make the situation feel even more urgent. But foreclosure generally does not happen overnight, and receiving foreclosure papers does not necessarily mean that you have already lost your home.

New Jersey has a judicial foreclosure process, meaning a mortgage lender generally must proceed through the court system before a home can be sold through foreclosure. State law also provides important notices and procedures designed to give homeowners an opportunity to respond.

The key is understanding where you are in the process and acting before important deadlines expire.

This article explains the basics of residential foreclosure in New Jersey, what homeowners may encounter during the process, and why reviewing foreclosure documents carefully can make a significant difference.

What Is Foreclosure?

Foreclosure is the legal process through which a mortgage lender seeks to enforce its rights against real estate after a borrower defaults on a mortgage obligation.

Most residential foreclosure cases involve missed mortgage payments. However, the specific allegations depend on the mortgage documents and circumstances involved.

A foreclosure case can eventually result in a court entering a final foreclosure judgment and the property being scheduled for sale. But several steps generally occur before reaching that point.

Because New Jersey uses a judicial foreclosure process, homeowners may have opportunities to challenge the lender’s allegations, raise appropriate defenses, pursue loss-mitigation options, or participate in foreclosure mediation.

Ignoring the case, however, can significantly reduce those opportunities.

The Notice of Intention to Foreclose

One of the most important protections for New Jersey homeowners is the state’s Fair Foreclosure Act.

Before commencing a residential mortgage foreclosure action, a lender generally must provide the homeowner with a Notice of Intention to Foreclose that includes notice of the right to cure the default. Under current New Jersey law, the notice generally must be provided at least 30 days, but not more than 180 days, before the foreclosure action is commenced.

The notice is more than a warning that foreclosure might occur. New Jersey law establishes requirements concerning what the notice must contain, including information regarding the claimed default, the homeowner’s right to cure, the amount or performance necessary to cure, and the deadline for doing so.

Homeowners should keep every Notice of Intention they receive, along with the envelope and any other correspondence from the lender or mortgage servicer.

A foreclosure attorney may review these documents to determine whether applicable notice requirements were followed.

What Happens When a Foreclosure Complaint Is Filed?

If the default is not resolved, the lender may file a foreclosure complaint.

According to the New Jersey Courts, after the applicable notice period, a lender can file a foreclosure complaint with the Office of Foreclosure. The homeowner becomes the defendant in the court action, while the party pursuing foreclosure is the plaintiff.

The homeowner must then be served with the foreclosure complaint and summons.

This is a critical stage.

A homeowner should not assume that contacting the mortgage servicer about a loan modification means that the court case can be ignored. Similarly, applying for mediation does not automatically stop the lender from continuing the foreclosure action.

Court deadlines must be treated separately and seriously.

How Long Do You Have to Answer a New Jersey Foreclosure Complaint?

The New Jersey Courts’ foreclosure self-help materials state that a defendant has 35 days to file an answer to the foreclosure complaint.

That deadline can be extremely important.

An Answer is the homeowner’s formal response to the allegations in the foreclosure complaint. A proper Answer may admit or deny allegations and identify legal or factual reasons why the plaintiff should not receive the relief it is requesting.

Simply sending a letter to the lender is not necessarily the same as filing an Answer with the court.

When an Answer is filed, the court determines whether it is contesting or non-contesting. A contesting Answer is transferred to the General Equity judge in the county where the property is located. If an Answer is deemed non-contesting, the foreclosure action continues toward the steps necessary for a final foreclosure judgment.

What Happens If You Do Not Answer?

Failing to respond does not make the foreclosure case disappear.

If a homeowner does not file an Answer, the plaintiff can request that default be entered. The New Jersey Courts explain that a plaintiff must obtain an entry of default before seeking a final judgment in foreclosure when the defendant has failed to answer.

Once a case progresses into default, the homeowner’s options may become more complicated.

This is one reason homeowners should consider obtaining legal advice as soon as they receive a summons and foreclosure complaint rather than waiting until a sheriff’s sale is approaching.

Can You Fight a Foreclosure in New Jersey?

Potentially.

Whether a homeowner has valid defenses depends entirely on the facts of the individual case.

A foreclosure defense is not simply an argument that making the mortgage payment has become difficult. Legal defenses generally involve issues concerning the plaintiff’s right to foreclose, compliance with applicable law, the mortgage documents, accounting, servicing, notices, or other legal and factual matters.

Potential issues an attorney may investigate can include:

• Whether the plaintiff has the legal right to enforce the mortgage and pursue foreclosure;
• Whether required foreclosure notices complied with New Jersey law;
• Whether payments were properly credited;
• Whether the amount claimed to be due is accurate;
• Whether fees, costs, or other charges were properly assessed;
• Whether applicable mortgage servicing requirements were followed;
• Whether the homeowner was properly served; and
• Whether other federal or state consumer-protection laws affect the case.

The existence of one of these issues does not automatically mean a foreclosure will be dismissed. Foreclosure cases are highly fact-specific, and defenses that apply in one case may not apply in another.

New Jersey Foreclosure Mediation

Some homeowners may also qualify for New Jersey’s court-sponsored Foreclosure Mediation Program.

Mediation brings the homeowner and lender into a process involving a neutral third party in an effort to reach a mutually acceptable resolution. The mediator does not decide the foreclosure case.

According to current New Jersey Judiciary materials, eligible homeowners generally should request foreclosure mediation within 60 days after receiving the summons and complaint. After that period, participation may require filing a motion asking the court to permit the homeowner into mediation.

There is another important point: requesting mediation does not automatically stop the foreclosure case.

The lender may continue pursuing the foreclosure while mediation is pending.

Therefore, homeowners should not treat mediation as a substitute for responding to the lawsuit.

Can a Loan Modification Stop Foreclosure?

A loan modification may be one possible way of resolving a mortgage default, but approval is not guaranteed.

Depending on the homeowner’s circumstances and the applicable loan program, loss-mitigation possibilities might include a loan modification, repayment arrangement, forbearance, or another workout option.

Some homeowners may also consider alternatives that involve leaving the property, such as a short sale or deed in lieu of foreclosure.

Which option makes sense depends on factors including income, the amount of the arrears, the property’s value, other liens, the homeowner’s long-term plans, and the lender’s available programs.

Homeowners should also maintain records of communications with their mortgage servicer. Keep copies of applications, uploaded documents, correspondence, confirmation numbers, emails, and letters.

What Happens After Final Foreclosure Judgment?

If the lender ultimately obtains a final foreclosure judgment, the process can move toward the sale of the property.

The fact that a homeowner has reached this stage does not mean every possible option has disappeared, but time becomes increasingly important.

New Jersey Courts provide procedures concerning motions to stay a sheriff’s sale. The Judiciary specifically warns homeowners participating in mediation that if a home has already been scheduled for sheriff’s sale, a motion asking the court to stay the sale may be necessary.

Whether a court will grant a stay depends on the circumstances and applicable law.

Waiting until the last few days before a scheduled sale can make it considerably harder to investigate the case and determine what relief may be available.

Does Bankruptcy Stop a New Jersey Foreclosure?

Bankruptcy and foreclosure are separate areas of law, but they can intersect.

The New Jersey Courts explain that, in most cases, filing bankruptcy triggers the federal Bankruptcy Code’s automatic stay, which prevents a party from starting or continuing foreclosure activity while the stay remains effective. Bankruptcy does not, however, automatically dismiss the foreclosure case. The foreclosure can resume when the bankruptcy stay ends or is lifted.

Bankruptcy can have substantial long-term financial and legal consequences. It should not be viewed simply as a last-minute foreclosure tactic without obtaining appropriate advice about whether bankruptcy makes sense under the homeowner’s particular circumstances.

Do Not Ignore Foreclosure Papers

One of the most damaging things a homeowner can do is put foreclosure paperwork aside because the situation feels overwhelming.

If you receive a foreclosure complaint:

Read it immediately.

Look at when and how you received it. Keep the summons, complaint, Notice of Intention, mortgage statements, modification correspondence, payment records, and communications with your servicer.

Remember that the New Jersey Courts state that defendants generally have 35 days to answer a foreclosure complaint.

Also remember that applying for mediation or communicating with your mortgage company does not necessarily suspend that deadline or stop the foreclosure action.

You May Have More Options Than You Think

A foreclosure complaint is serious, but it is not the same thing as an immediate eviction or sheriff’s sale.

Depending on the circumstances, a homeowner may have defenses to investigate, opportunities to pursue mediation or loss mitigation, or other legal options.

The earlier the case is reviewed, the more time there generally is to identify potential problems and determine an appropriate strategy.

If you have received a Notice of Intention to Foreclose, foreclosure summons and complaint, notice of default, final judgment, or sheriff’s sale notice in New Jersey, consider speaking with an attorney promptly.

At Ginsburg Law Group, we represent consumers and help homeowners understand their rights when facing foreclosure and other consumer financial disputes.

Facing foreclosure in New Jersey? Contact Ginsburg Law Group to discuss your situation and learn what options may be available.

This article is provided for general informational purposes only and does not constitute legal advice. Foreclosure laws and procedures can change, and the application of the law depends on the specific facts of each case. Reading this article does not create an attorney-client relationship.