Q. How long does it take?
A. New Jersey is claimed to be the longest time period in the United States for a lender to reclaim a foreclosed property because New Jersey is a judicial foreclosure state with numerous procedural time limits.
Q. How long is long?
A. Upon a default, which almost always refers to a failure to pay, the loan documents (lender’s Mortgage and Note) will dictate the notice to the borrower. The usual time is 2 or 3 months after the first missed payment, then the debtor will receive a first notice from the lender.
Q. Okay, assume I’ve missed payments? Then how long?
A. N.J.S.A. 2A:50-56 defines a residential mortgage and requires the lender to give a notice to foreclose by registered or certified mail at last known address. It lists what must be in the Notice of Intention to Foreclose, such as: If debtors don’t cure the default, the lender shall foreclose, etc.
Q. Then what?
A. The lender will start suit, usually through one of several law firms that specialize in foreclosure. The debtor will be served with a Complaint that has been filed and usually it is served by the county sheriff’s department with a Summons. This can take one month to several or more and totally depends on the lender or whoever was assigned (transferred) the Mortgage by the lender.
Q. Then what?
A. Next depends totally on the debtor and the property. There are properties which are abandoned, occupied by debtor, and even occupied by tenants. Then there are those who hire an attorney (our law firm) to contest the Complaint or do nothing – a non-response and everything proceeds automatically or you can even file an Answer pro se (without an attorney).
The problem for most people is that they fully realize they haven’t paid the mortgage and now ask can they get a mortgage modification. The answer is simple – while it is possible to get a mortgage modification, it’s not probable if you have waited this long, but again, the whole question of modifications is a separate problem.
Q. Okay, assume I don’t do anything, then what?
A. The lender then must proceed to Judgment by filing papers in Trenton for default stating you aren’t in the military. Then they can get a Judgment for foreclosure and sale. The lender must give the debtor a 14 day notice to cure and that a Judgment of Foreclosure will be entered.
Q. Then how much time?
A. After the lender gives proof of waiting the 14 days, then a Motion for Final Judgment is requested directing the County Sheriff to sell the property at Sheriff Sale.
Q. The Sheriff Sale.
A. After receiving a copy of the Judgment for Foreclosure and Writ of Execution plus other legal papers, the Sheriff’s office in your county will schedule the sale much like a bakery, first in, first out. The Sheriff then publishes the Notice of Sale 4 times at least once a week.
Q. Then it is sold?
A. It may be but each debtor is entitled to 2 postponements no more than 2 weeks each. The Sheriff will auction off the property, which is usually “bought” by the lender for the balance of how much is owed on the loan. The Sheriff usually delivers the Deed to the successful bidder within a few weeks. The debtor can pay the full amount due and owing up to the delivery of the Deed.
Q. So after all this, how long would you estimate?
A. New Jersey is so slow because as a judicial foreclosure state there are mandatory time periods before the various steps by the lenders are allowed to happen. With a contested (using an attorney) foreclosure, my estimation is at least one year and often much, much longer. And often during this time, arrangements can be made for short sale, modification if possible, or some other way – such as bankruptcy, which can delay the whole process another several months at least.
Q. How about a condominium unit?
A. It takes as long as above.
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