How Long Does it Take to Foreclose on a Home in New Jersey?

How Long Does it Take to Foreclose on a Home in New Jersey?
by: Jonathan Goldsmith Cohen

Until this year, it took about three years for a property to go into foreclosure and be sold at a sheriff’s sale after a homeowner stopped making regular mortgage payments. New Jersey had one of the slowest time frames for foreclosures in the nation. This lulled many delinquent homeowners into a false sense of security, or at the least, the ability to avoid dealing with their delinquent mortgage and pending foreclosure for a significant period of time. It also provided the luxury of time when attempting a mortgage modification.

Recently, New Jersey put new guidelines into place for foreclosures. Under these guidelines, at present, foreclosure takes about nine months. This means that if you stop making your mortgage payment today, in nine months judgment could be entered against you at the conclusion of a foreclosure action in Chancery court. You could quickly find yourself forced to move out of your home.

The faster foreclosure timeframe in New Jersey should be a call to action for delinquent homeowners. Unless you have the ability to make a lump sum payment to catch up on your back mortgage payments and stay current on them for the remainder of the term of the loan, the only way to stop a foreclosure action is to file a Chapter 7 or Chapter 13 Bankruptcy.

Once the foreclosure action is stopped by filing a Chapter 7 or Chapter 13 Bankruptcy, a mortgage modification can be pursued under the bankruptcy court’s Loss Mitigation program. The bankruptcy court’s program provides a mechanism bound by court order that brings together the bank’s lawyers and contact people at the bank with your bankruptcy lawyer to attempt a mortgage modification. It also provides a secure web portal to submit documents through and for communication between the parties. More information on the program can be found here:

http://www.njb.uscourts.gov/sites/default/files/news/2013_11_14_c_LMP_Program_and_Procedures_9-19-13_FINAL.pdf

Instead of a mortgage modification though, in my opinion, Chapter 13 Bankruptcy is the best way to catch up on your delinquent mortgage. Chapter 13 Bankruptcy obligates your mortgage lender(s) to start accepting payments again and to consider you current on your mortgage. You are then at no risk of foreclosure. You make up your back mortgage payments through the Chapter 13 Bankruptcy plan with monthly payments to the bankruptcy trustee spread out over up to 60 months.