A mortgage foreclosure is a law suit filed in the New Jersey Superior Court asking the Court for the legal right to have real property (whether a home, commercial property or vacant land) auctioned off to the highest bidder by the county sheriff. Borrowers/home owners who face a mortgage foreclosure are given special protections under the law.

New Jersey is a “foreclosure first” state. This means that the holder of a first mortgage must sue for foreclosure and complete the foreclosure with a sheriff's sale before suing the homeowners for money. The second mortgage holder and other junior mortgage or judgment holders are not bound by this law. They can bring suit for money when the borrower misses a payment.

New Jersey has a group of laws called the Fair Foreclosure Act. It applies only to mortgages taken out by home owners. The Fair Foreclosure Act requires notices from the mortgage lender to the borrower along many steps in the foreclosure process.

The first of these is a Notice of Intent to Foreclose. This is sent 30 days before the lender's attorney files a foreclosure law suit. It informs the home owners of how much they must pay, when they must pay and where they must send the money to avoid the start of a foreclosure proceeding. THIS IS AN IMPORTANT RIGHT! It may keep the start of a foreclosure off of a credit report. It can save money on legal fees, worry and many, many sleepless nights.

After the 30-­day period has expired without the payment requested by the mortgage company having been made, their lawyers are able to file a foreclosure law suit and have the county sheriff serve a Summons and Foreclosure Complaint on all property owners and on others who may have some interest in the property. The Summons and Complaint comes with an application for the Court's foreclosure mediation program. This can help home owners deal with their mortgage lender under the supervision of a Court­ appointed mediator. The time period to answer the complaint or to ask for mediation is very limited, so it is critical that you act quickly once served.

For more information, please see my other posts related to foreclosure.

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