Diaz & Associates, P.A.
your New Jersey Foreclosure Defense Attorney

Just about everybody knows that over the past few years our economy has been in a significant downtrend. Expansive and sometimes very expensive homes were bought with very little money down and they have since lost a substantial portion of their former value. Home owners have lost their jobs, forced to accept lower compensation, and small business owners have seen their income slashed. It's no wonder why so many of our neighbors are facing foreclosure.

Before you decide what Foreclosure Defense strategy might work best for you, it is important that you have a basic understanding of New Jersey Foreclosure laws.

New Jersey Mortgage and Foreclosure Law Primer

• In New Jersey is a "Lien Theory" State in which the property acts as security for the loan. The document which is considered the lien is called the "Mortgage"
• In order for the lender to begin foreclosure proceedings he must file with the Superior Court in what is known as a "Judicial Foreclosure". Foreclosures are handled within the Superior Court by their "Foreclosure Unit".
• The filed Foreclosure Complaint must be accompanied with a "Lis Pendens", which is documentation that proper public notice has been given on the property that is being foreclosed.
• The length of time it takes to foreclose is dependent on the court's schedule. New Jersey has one the longest waits. It normally takes about 250 days for an uncontested foreclosure. This can be further delayed if the home owner contests the action, files petitions for delays, or files for bankruptcy.
• The Home owner has 35 days to file an answer to the Foreclosure Complaint. If this is not done the home owner will be considered in default.
• Once a default is declared, the lender must wait another 45 days before the court's final judgment is issued and a "Writ of Execution" is issued and sent to the local Sheriff's office to start the foreclosure sale process.
• The home owner in default must be given a minimum of 10 days notification before the foreclosure sale can occur.
• The State of New Jersey has a "Right of Redemption" Statue which allows a foreclosed home owner to reclaim his property by paying the full amount of the unpaid loan plus costs. The law gives the party 10 days to redeem the home after the foreclosure sale.
• New Jersey allows for a "Deficiency Judgment" which can be applied if the property is sold at public sale for less than the balance owed. This means the borrower is still held responsible for the difference. Fortunately New Jersey has the "Fair Market Credit" doctrine where, in such cases of low or minimal bids, gives due credit to the borrower, at the "Fair Market Value" value of the home. To make use of the "Fair Market Credit" law, such deficiency actions must be brought within 3 months after the foreclosure sale.

Mortgages Background

In days gone by, home mortgages were held for the entire life of the loan by the same lender to whom you originally applied. If you had a problem, it was a simple matter to call your local bank manager, explained your situation, and they would try their best to work something out for you. During the last decade "securitizing" home mortgages has made a lot of difference. A mortgage loan that hasn't been combined and sold to investors is a rarity. It's these investors, and not the loan originator, who has the final say on any aspect of your mortgage. They normally retain "servicers", who collect your payments, issue default notices, and in some cases initiate foreclosure proceedings. There are some who receive financial compensation for foreclosures, and therefore they may view foreclosures as an incentive.

Foreclosure Defense

Foreclosure defense is basically combating your lender who is attempting to foreclose on your home by either stalling or stopping the process in its entirety. All of this may be a little intimidating, but do not despair, there are ways homeowner can fight back against the foreclosure machine. When these mortgages were sold and bought, the banks didn't necessarily always follow the law. Sometimes critical paperwork has been lost or not completed at all, or may have improper endorsements. In some cases, in the name of expediency, homeowners' signatures were forged. The hasty transfer of the multitudes of mortgages that occurred during mortgage heydays of 2003 – 2008 generated lots of errors and discrepancies. This, indeed, is where foreclosure defense can be best applied.

In New Jersey, foreclosure has to be undertaken with the supervision of the Superior Court. Your lender is required to provide proof that they have the right to foreclose. This gives your foreclosure defense lawyer the opportunity to thoroughly examine the lender's file. He also has the right to ask employees questions concerning the loan. Can the lender provide proof that they own the mortgage and note? Can they produce proper documentation that they have the legal standing to file a foreclosure proceeding. If the loan was sold or transferred, can they provide evidence that the loan was properly transferred? These issues, the lender's right to foreclose and therefore prevent them from doing so.

There have been some cases on record in which, by exposing deficiencies in their processes such as "rubber stamping" of documents has allowed homeowners to retain their homes for months or even years without making mortgage payments. Most foreclosure defense strategies have focused on the shoddy record-keeping performed by lenders. Even if your lender made no errors, your foreclosure defense lawyer can slow down the foreclosure process by forcing your lender to prove their case. This delay could give you the time necessary to affect a more permanent solution.

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