A brief overview of the foreclosure process in New Jersey, the steps involved, and how you can assert your rights and defenses in order to get a beneficial result.
The Basic Steps in a Foreclosure
"Default" - You miss making your mortgage payments.
Notice of Intent to Foreclose - a notice that the lender is required to send out pursuant to New Jersey Law. This notice must contain certain information.
Foreclosure Complaint is filed in court. This is a type of law suit that the lender begins after time has passed since the Notice of Intent to Foreclosure. Along with the Complaint, a Lis Pendens is filed with county clerk where the property is located.
The Foreclosure Complaint is Served. Generally, the bank must effectuate "personal service" of the complaint, through delivery in person to you or a household member. If the bank cannot find you, they will try to use "substitute" service, such as service through publication in a newspaper. Therefore, if you did not receive a complaint in hand, it is still possible that a complaint was filed and that the foreclosure case has already begun.
Once the Complaint is served on the homeowner (who is the "Defendant"), there is time allotted for to file an "Answer" in response.
It is important to file an Answer and obtaining counsel to represent you prior to this will help ensure that they can assist you with filing an effective Answer.
If no Answer is filed, Entry of Default (not the same as "Default" mentioned earlier) is made with the Court.
Next, a notice to cure is issued, giving time for the homeowner to cure the arrears. If no cure is made, an application for Final Judgement is made by the bank which sets the amount owed.
Final Judgement and Writ of Execution Issued.
A Sheriff Sale Scheduled.
Sheriff Sale occurs, with either a 3rd party purchasing the property or the bank taking the property.
What You Can Do
During the process outlined above, there are a number of things that can be done to defend against the foreclosure.
-First and foremost, answering the complaint in court is critical. In your answer, you can assert applicable counterclaims and defenses.
-The quality of the answer filed matters, as a well-pled answer will catch the attention of the lender and often result in the case being referred to a more sophisticated law firm.
-The result of a good quality answer is that you can be in a better position to assert your defenses which help improves the chances of getting a better modification offer to resolve the foreclosure.
-After an answer is filed and the case is officially a "contested matter", responding to discovery and any notices that are received is also essential to maintaining the fight in the litigation. This can include opposing motions or even filing motions where appropriate and necessary, such as where the bank has not responded to discovery requests.
-In dire circumstances, such as on the eve of a sheriff sale, applying to the court to explain problems with communicating with the bank can often result in a hugely beneficial delay of the sheriff sale to ensure that a modification review can proceed before it is too late.
-When other debts are an issue or all other avenues have been exhausted, an appropriate bankruptcy should be considered. The Bankruptcy will put the foreclosure on hold and may afford additional opportunities to resolve the matter through modification or other means.
We recommend obtaining an attorney to assist with this process. Please contact us for more information.
Additional resources provided by the author
You can get more information from New Jersey's Office of Foreclosure. I recommend the help of an attorney to help you with the process.
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