New Jersey's Foreclosure Mediation Program

By participating in New Jersey's free foreclosure mediation program, you might be able to avoid foreclosure.

In response to the foreclosure crisis in this country, many states implemented mediation programs to assist borrowers in finding ways to avoid foreclosure. If you're a homeowner facing foreclosure in New Jersey, you might be eligible to participate in the state’s foreclosure mediation program. (To learn what to do—and what not do—if you’re facing a foreclosure, see Foreclosure Do's and Don'ts.)

Read on to learn more about how the program works and how you can benefit from the process.

What's Foreclosure Mediation?

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:

  • the borrowers
  • their lender (or servicer), and
  • an impartial third-party (the mediator).

At the meeting, the parties discuss the borrower's financial situation and try to work out 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:

  • loan modification
  • payment arrangement
  • forbearance agreement
  • short sale, or
  • deed in lieu of foreclosure.

(To get more information about foreclosure mediation, see How to Stop a Foreclosure With Mediation.)

New Jersey Foreclosure Mediation

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.)

Eligibility for Foreclosure Mediation

New Jersey homeowners in foreclosure are eligible for mediation if:

  • the property is residential
  • a financial institution (not some other party, like a homeowners' association or condominium owners' association) started the foreclosure
  • the property is the homeowners' primary residence
  • the borrowers want to stay in the home
  • a court has not entered a final judgment, and
  • the borrowers are not in bankruptcy.

All borrowers have to agree to participate in mediation.

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, to participate in mediation, you'll have to file a motion with the court and a judge will decide whether you may participate in the mediation program.

How the Mediation Program Works

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.

Mediation's Effect on the Foreclosure

A mediation request does not stop the foreclosure action. Despite participating in mediation, the lender can go ahead with the foreclosure action.

Cost to Participate in Mediation

There is no fee to participate in New Jersey’s foreclosure mediation program.

How to Sign Up for New Jersey’s Mediation Program

Go to the New Jersey Courts website to find links to the forms you'll need to request mediation.

Once your case is accepted into the program, you'll have to complete some forms, like a Foreclosure Mediation Checklist and a Foreclosure Mediation Financial Worksheet. You can find these forms at the New Jersey Courts website. (If you need help with any of these forms, talk to an attorney or a HUD-approved housing counselor.)

Should You Participate in the Foreclosure Mediation Program?

Even though participating in New Jersey’s foreclosure mediation program doesn't guarantee that a foreclosure will be avoided, it doesn't hurt to participate in the program. The lender might 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.

Getting Help

If you want representation during the mediation process or you need information about the foreclosure process in New Jersey, including whether you have any potential defenses to the foreclosure, consider talking to a foreclosure attorney.

If you want to learn more about different loss mitigation options, contact a HUD-approved housing counselor. A housing counselor can help you by reviewing your financial information, preparing your documentation for mediation, and evaluating possible options to help you keep your home.

To get more information about foreclosure mediation in New Jersey, go to the NJ Judiciary Foreclosure Mediation Program website. Also, keep in mind that you might qualify for help from New Jersey's Hardest Hit Program. This program provides up to $50,000 to eligible homeowners so they can avoid foreclosure.

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