When you are behind on your mortgage payments, it is only a matter of time before you ask how long you have before the foreclosure process begins.
In New Jersey, when you take out a mortgage loan, your property serves as collateral for that loan. If you fail to meet your due payments, your home may be taken from you by your lenders and creditors. Your lender or creditor has a lien on your property, which makes them legally justified to foreclose on their collateral.
That means you might lose your house and home when the lender – with the assistance of the county sheriff -- sets out to sell your property to pay off the outstanding debt to the lender that you have accrued. This is referred to as a Sheriff Sale. It is the final step in the process known as foreclosure. From start to finish, how long does a foreclosure take in the state of New Jersey?
How Long Must You Fail to Make Payments Before Creditors Foreclose?
Before a lender can issue a foreclosure notice, you need to default on your mortgage by not paying the required amount for an extended period. Should you fail to make your due payments in a timely manner, your creditor must first issue a notice of intent to foreclose under the New Jersey Fair Foreclosure Act that they intend to foreclose on your home.
In this intention of foreclosure notice, they must explain why the lender intends on foreclosing, information about your right to cure the default on your mortgage, how much you will need to pay to cure the debt, your deadline to pay the debt to avoid foreclosure, as well as information pertaining to what will happen if you fail to pay your debts.
The foreclosure notice must be issued at least 30 days before they file the foreclosure notice, but no more than 180 days. After the foreclosure is successfully filed, the lender has to first obtain a final judgment of foreclosure. After obtaining a final judgment the creditor must apply for a Writ to be directed to the county sheriff. The county sheriff must then set a date of the sale and publish this notice in the paper. A borrower is entitled to two adjournments of the sheriff sale.
How Can Adjournments Extend the Foreclosure Process?
While it might take a while for the foreclosure to complete, adjournments in the process can extend the foreclosure even further. Because of adjournments, it is impossible to determine the exact length of any given foreclosure in New Jersey, since every foreclosure will follow a different course. A lot depends on how quick and aggressive the foreclosing attorneys act in prosecuting the foreclosure. Many of the leading foreclosure firms have thousands of cases so may not move so quickly.
Adjournments are pauses in the sheriff sale process that temporarily pause or postpone the final sale of the foreclosed property. This period can be used to resolve the foreclosure without requiring the sale of the debtor’s home.
New Jersey statute was modified on July 2019, thanks to alterations under New Jersey foreclosure law that greatly impacted the rights and options available to borrowers. N.J.S.A. 2A:17-36 provides:
Notwithstanding any other law or court rule to the contrary, a sheriff or other officer selling real estate by virtue of an execution may make five adjournments of the sale, two at the request of the lender , two at the request of the debtor, and one if both the lender and debtor agree to an adjournment, and no more, to any time, not exceeding 30 calendar days for each adjournment. However, a court of competent jurisdiction may, for cause, order further adjournments.
This revised law limits the number of adjournments that can be taken presently when compared to the number you could take in the past. Before, the lender/plaintiff could issue an unlimited number of adjournments, while the debtor was entitled to only two fourteen-day adjournments. Now, however, both parties are entitled to only two adjournments each, with each adjournment period lasting twenty-eight days.
Additional adjournments that can be made beyond the four mentioned above include one adjournment issued by the mutual consent of both the lender and debtor AND one issued by the court itself, if the court sees the situation requires one.
Can You Stop Foreclosure?
In New Jersey, there are several ways one can negotiate out of the sheriff sale, thus cutting off the foreclosure process before your home is sold to the highest bidder.
When you pause the foreclosure process via an adjournment leading up to the Sheriff Sale, you can meet with your lenders in order to arrange a plan to stave off the sale of your home. You may be able to negotiate a loan modification or the creation of a new payment plan. Either option can help you come to an agreement without losing your property.
Another way to nullify the foreclosure is to pay off the debt owed. This can mean paying the lenders what you owe them in unpaid debts. This might require raising funds for such an event. Regardless, if the lender is paid, the foreclosure will end prematurely with you still in possession of your property.
However, you might not have the money to repay your debts or negotiate new terms around foreclosure. This leads to a powerful tool still at your disposal: Chapter 13 Bankruptcy. Chapter 13 Bankruptcy will put an automatic stay on all creditors aiming to collect on your debts. This will result in the foreclosure ending prematurely, with all your prior debts being reorganized for you to pay them off in a payment plan over a three to five-year period. With mortgage loans, the original mortgage loan is reinstated, and you have the option of making the regular mortgage payment again with the arrears on the mortgage restructured.
If you choose to use bankruptcy to stave off foreclosure in New Jersey, you will need help from bankruptcy lawyers equipped to answer your questions and guide you through the process. That is where we come in. The attorneys at Scura, Wigfield, Heyer, Stevens & Cammarota LLP can help. Please call our offices to schedule a free consultation and hear your options.