In response to the ongoing foreclosure crisis in this country, many states have implemented mediation programs to assist borrowers in finding ways to avoid foreclosure. If you are a homeowner facing foreclosure in New Jersey, you may be eligible to participate in the state’s foreclosure mediation program. Read on to learn more about how the program works and how you can benefit from the process.
(To learn about other options for dealing with foreclosure, visit Nolo's Foreclosure section.)
Foreclosure mediation is a process that is used to help homeowners avoid foreclosure by coming up with an alternate solution that benefits both the borrowers and the lender. Mediation consists of a meeting between:
At the meeting, the parties discuss the borrower's financial situation and try to negotiate a way for the homeowner to keep the home or give up the property without going through a foreclosure. By working together, the parties are often able to reach an agreement.
Potential outcomes of mediation include:
(To get information about each of these options, see our Alternatives to Foreclosure area.)
New Jersey has established a mediation program to provide certain homeowners in foreclosure with the right to mediation. (Learn more about the New Jersey Foreclosure process.)
New Jersey homeowners in foreclosure are eligible for mediation if the property is:
Mediation is available whether or not the borrower disputes the lender’s right to foreclose and may be requested within 60 days after the service of the summons and complaint. After 60 days, a motion indicating exceptional circumstances exist must be filed with the court and a judge will decide whether or not you may participate in the mediation program. If a sale is already scheduled, you need to file a mortion asking the court to stay (postpone) the sale.
Go to www.judiciary.state.nj.us/superior/foreclosure.htm to find a link to the forms you need to request mediation. (Click on "Important Foreclosure Mediation Forms for Homeowners.")
Once the court receives the required forms, the material will be distributed to court staff in the local courthouse and to the lender’s attorney. Then, the court will assign a mediator to your case and set a date for the mediation.
The following parties will attend the mediation:
A mediation request does not stop the foreclosure action.
Remember, if a sheriff’s sale has already been scheduled, you will need to file a motion requesting the court to postpone (or stay) the sheriff’s sale. A sample motion to stay the sheriff’s sale can be found on the New Jersey Judiciary’s web site at www.judiciary.state.nj.us. Click on “Forms”, then “Represent Yourself in Court (Pro Se), and “Notice of Motion to Stay Sheriff's Sale and Referral to Mediation”.
There is no fee to participate in New Jersey’s foreclosure mediation program.
Even though participating in New Jersey’s foreclosure mediation program does not guarantee that a foreclosure will be avoided, it doesn't hurt to participate in the program. The lender may be more likely to agree to a nonforeclosure solution during mediation than if you approach it outside of the program. Or you might qualify for a loss mitigation option that you hadn’t previously considered.
For more information on New Jersey’s foreclosure mediation program, go to www.judiciary.state.nj.us/superior/foreclosure.htm.