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Summary:
| Judicial Foreclosure |
Yes |
| Non-Judicial Foreclosure |
No |
| Security Instruments |
Mortgage |
| Right of Redemption |
Yes, limited |
| Deficiency Judgments |
Yes, restricted |
| Time Frame |
Usually 90-120 days unless contested |
Judicial foreclosure in New Jersey requires that the lender file a complaint of foreclosure against the borrower with the superior court of the county in which the property is located. They must also record a Lis Pendens which constitutes legal notice that a lawsuit is pending. The lender can sue for the amount in default only, thus leaving the existing mortgage intact. However any right to a deficiency a judgment is lost to the lender in this type of foreclosure.
When service is completed, the law requires that a notice of intent to enter a judgment of foreclosure be sent to the defendant/borrower, offering a final chance for the borrower to cure the default. If there is no response, a judgment of foreclosure is entered into the record, and a writ of execution sent to the sheriff to schedule a sale. The defendant/borrower must be notified of the sale at least ten days prior to the sale date.
The notice of sale must also be posted in the offices of the county, on the property, and published in two newspapers of general circulation one of which must be in the county seat or in the largest municipality in the county.
The sale is conducted by the sheriff or another county officer. The successful bidder must pay all settlement charges to the sheriff within 30 days of the date of sale, or the sale may be declared null and void.
The lender may sue for a deficiency judgment within three months of the date of sale, or the date of court confirmation of the sale. The owner in default has the right to redeem the property and/or objection to the sale for 10 days after the date of sale (or until the sale is confirmed by the court or, in the event of objection by the borrower, until the court rules on the objection).
A deficiency judgment gives the borrower the right to bring an action to redeem the property within six months of the date the deficiency judgment was entered. Some New Jersey courts are refusing to confirm sales unless the lender agrees to limit any deficiency judgment to the difference between fair market value and the balance due on the loan.
Links:
State Legislative Campaigns:
- New Jersey: NARHRI Executive Director John Grant is sending a letter to the New Jersey General Assembly this week regarding several pieces of legislation under consideration in the state. The letter will be sent to members and posted on NARHRI's site. NARHRI lobbyists are beginning their work on the ground in the state as well. NARHRI will provide additional updates on developments in New Jersey as circumstances warrant.
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