According to RealtyTrac, as of March 2019, New Jersey had the second-highest foreclosure rate—and one of the most protracted foreclosure timelines—in the United States. To help alleviate the ongoing foreclosure crisis in the state, on April 29, 2019, New Jersey Governor Phil Murphy signed a set of bills into law. These new laws are primarily designed to assist homeowners who’re facing foreclosure. (To learn which other states have lengthy foreclosures, read States With Long Foreclosure Timelines.)
Among other things, the new laws strengthen New Jersey's foreclosure mediation program, ensure homeowners get adequate notice before a foreclosure starts, and generally allow for a more transparent and fairer process for people who’ve defaulted on their mortgage loan.
Here’s a rundown of the new laws directly affecting homeowners who're facing foreclosure:
The borrower gets a notice of intention to foreclose at least 30 days, but not more than 180 days, before foreclosure (S-3411). S-3411 requires the lender to give the borrower a notice of intention to foreclose at least 30 days—but not more than 180 days—before starting a foreclosure. This law also requires the lender to appoint a receiver for some multi-family dwellings facing foreclosure and limits reinstatements of dismissed mortgage foreclosure actions. These changes take effect on the first day of the fourth month 15 next after enactment. (To learn more about foreclosure procedures in New Jersey in general, read New Jersey Foreclosure Procedures.)
New Jersey’s foreclosure mediation program becomes permanent (A-664). Effective November 1, 2019, A-664 creates a long-term, permanent foreclosure mediation program in New Jersey. The homeowner will receive written notice about the option to participate in the mediation program along with the notice of intention to foreclose, and again with the foreclosure complaint. (To read more about foreclosure mediation in New Jersey, see New Jersey’s Foreclosure Mediation Program.)
Revised foreclosure sale procedures (S-3464). This new law requires a sheriff to conduct a foreclosure sale within 150 days, instead of within 120 days, of the sheriff's receipt of a writ of execution. The law also provides that a sheriff or other officer conducting a foreclosure sale may make up to five adjournments, two at the request of the lender, two at the request of the debtor, and one if both the lender and debtor agree to an adjournment. This law takes effect on the 90th day following enactment. (See New Jersey Foreclosure Procedures for more information.)
Reduced statute of limitations for foreclosures (A-5001). Effective immediately, this new law reduces the statute of limitations for most residential mortgage foreclosure actions from 20 years to six years from the date the debtor defaulted. (To learn more about statutes of limitations, see The Statute of Limitations in Foreclosure Actions.)
Changes to fast-track foreclosure law for vacant properties (S-3413). S-3413, effective 30 days after enactment, amends New Jersey’s fast-track foreclosure process for residential properties if the property is vacant and abandoned. (To learn more about fast-track foreclosure procedures for vacant homes, read Faster Foreclosures for Abandoned Homes in New Jersey.)
Creditor must provide contact information regarding property maintenance (A-4999). A-4999 requires the creditor to file contact information along with the foreclosure complaint regarding who’s responsible for receiving complaints about property maintenance and code violations, as well as contact information for whoever is responsible for any care, maintenance, security, or upkeep of the exterior of the property. (Learn about the lender's right to maintain the property during a foreclosure.) This measure is designed to assist cities and towns in fighting, as well as help homeowners avoid the negative consequences of, so-called zombie foreclosures. This law takes effect on the 90th day following enactment and applies to residential mortgage foreclosure actions on or after that date.
The governor also signed the following bills, which change some of New Jersey's other foreclosure and lending laws:
Servicers must get a license (A-4997). This new law requires mortgage servicers to get a license from the commissioner of banking and insurance.
Some HOA liens get super-lien status (A-5002). A-5002 permits all common-interest community associations, like HOAs, to record a lien for unpaid assessments, and gives that lien priority over prior recorded mortgages and other liens for six months’ worth of unpaid customary assessments. (This kind of lien is called a “super lien.”)
Out-of-state lenders have to comply with the New Jersey Residential Mortgage Lending Act (A-3416). This law clarifies that out-of-state persons must comply with New Jersey law in residential mortgage lending activities.
If you want to find out on which date each of these other new laws goes into effect, search for each bill by number on the New Jersey bill tracking website and check the language of the bill.
Effective date: April 29, 2019