Foreclosure Stages in New Jersey
Foreclosure is the legal process by which a lender calls in the note due on a mortgage. When a borrower is delinquent on her mortgage payments, the lender may consider her to be in default and initiate the foreclosure process. In New Jersey, the stages of the foreclosure process can take months to complete. At any time during the process before the property is sold, the borrower has the option to cure the default and halt the foreclosure process.
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Borrower Falls Behind on the Mortgage
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The first stage in a Jersey foreclosure is actually the pre-foreclosure stage when the borrower falls behind on the mortgage payments. Your individual mortgage documents will determine at what point your mortgage is considered in default, but a few days late is not usually grounds for default. Your lender will send you a written notice when it considers your loan to be in default. As a rule, the lender will make every effort to work with the borrower to bring the loan current, as foreclosure is an expensive and time-consuming process for the lender. If the loan remains in arrears, the lender will send you a notice of its intent to foreclose on the loan if the loan is not brought current within 30 days.
Filing for Foreclosure
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If the loan remains in default, the lender will file a notice of foreclosure in the county court where the property is located. The notice of foreclosure will be served on the borrower as well as published in a local newspaper. In New Jersey, the lender may choose to sue for the amount in arrears only or for the entire balance due on the mortgage. The borrower then has 35 days to respond to, or defend against, the notice. If the borrower fails to respond, then the court may order a judgment against the borrower. The judgment, or writ, effectively gives the lender the authority to sell the property to satisfy the amount owed on the loan.
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Sale
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Once the court has issued a judgment in favor of the lender, it may sell the property at auction or sheriff's sale. Notice of the sale must be posted on the property as well as published in at least two local newspapers. One newspaper must be in the largest municipality in the county or in the county seat. Notice must also be given directly to the property owner at least 10 days before the sale is scheduled to take place. After all required notice has been given, the property will be sold at auction or sheriff's sale. The sale must take place within 45 to 120 days from the date the court ordered the writ or judgment.
Redemption Period
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New Jersey has a relatively short redemption period. This is the amount of time that the borrower has to pay the total amount due to the lender in order to regain ownership of the property after sale. In New Jersey, the redemption period consists of the 10 days following the sale of the property. If the amount due is not paid within the redemption period, then the title to the property will be passed to the buyer from the sale.
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