In this video, you will discover foreclosure process in NJ, the timeline and what the New Jersey fair foreclosure act means in your chances to stop foreclosure successfully,
7 Stages Foreclosure Process in NJ (300 Days)
The number of days I will be sharing with you in this chapter can vary slightly or significantly depending on many factors…
…such as your local state, county, holidays, your mortgagee, bankruptcy laws, recession etc.
However, they are estimated number of days in between the foreclosure process stages in regular New Jersey Real Estate market condition.
In a regular market condition, it takes about 250 – 300 days from the day of default to actually lose a property to sheriff auction sale.
My goal as always is to refrain from using big legal words and languages.
I will use simple English to describe each stage. If you want, you can read more complicated languages at the state website.
Let me help you.
STAGE 1 of Foreclosure Process in NJ – Default – Day 0
This stage marks the first time you missed a due mortgage payment. It’s called a default.
The banks know that this will happen a lot more often than none. At this stage, there is typically no credit reporting.
It’s just a matter of you catching up with your mortgage payments.
At this stage, you should determine if the cause of the default is temporary or permanent.
However it can be confusing or cloudy.
Most people that get a hold of this book are well beyond this stage.
For example, if you lost your job or income where you are not sure how soon you can secure a new income source, you may find it hard to determine if it’s permanent or temporary.
In that case, keep a journal and write down your thoughts and a goal.
Try writing down a plan to get out of default if you can because that’s really what this is all about.
It’s all about the Benjamins.
It’s important to write things down because your emotions are definitely going to be engaged.
Writing your thoughts down will help suppress the negative effect of the emotions while creating a solution to exit the foreclosure process.
STAGE 2 – Notice of Intention (NOi – Lis Pendens) – 90 Days
At this stage in the foreclosure process, the attorney for your mortgage company (the mortgagee) files a lis pendens a.k.a pending lawsuit against you.
When a lis pendens is filed, you are now officially in pre-foreclosure.
Your emotions are a lot more engaged especially if you have not taken the time to create a plan to exit default of the lien.
You get this crazy legal letter from the court and you probably didn’t take the time to read it.
I know; it’s a scary thing.
It feels like trouble.
It feels like an eviction from the property is about to happen in 7 days.
Good news is that no eviction is going to happen for probably another 200 plus days and that’s only if you do not take action.
By the way, it’s now public record that you are facing foreclosure.
In fact, that’s probably why you gained access to this book.
But it’s not too late as of yet.
However, you need to do the same thing I suggested during default stage of the process to increase your chances to stop foreclosure effectively.
Continue the journal you created or create it if you haven’t. Write down your thoughts and a goal.
Example: “My goal is to catch up on my mortgage payment in _______ days.”
At this stage, you must create a plan; it’s no more an option.
By the time you receive the legal letter (lis pendens), you probably have less than 200 days to eviction from your property.
You cannot afford to drag creating a plan any more.
Write down 5 different ways to come up with the amount your need to bring your mortgage current.
The key here is to actually grab a pen and write it out.
Remember that writing your thoughts, goal and plan down will help suppress the negative effect of the emotions on handling the foreclosure.
STAGE 3 of Foreclosure Process in NJ- Foreclosure Complaint (Superior Court) – 120 Days
Another 30 days has evaporated into blank space.
Up until this stage, the courts and the county foreclosure unit were barely involved if at all.
Well, they are involved now and you will receive an official notification indicating the servicing of a summon and complaint from the court.
Typically, you still have 35 days to respond to this.
That 35 days will move at the speed of light seemingly.
Even though a full foreclosure process takes about 300 days, you never want to get to this stage.
Here is why.
Your spouse, tenants if any and other family members are now potentially exposed to this information due to letters and postcards coming into the mailbox.
It complicates things even further as you attract unwanted attention.
STAGE 4 – Notice of Entry of Default – 155 Days
At this point, you have not answered the court, you missed the deadline to do so and/or you have not brought your mortgage payment current which is the bottom line.
The foreclosure process simply advances to officially filing a default officially with the court.
The truth is that there are requests that you can file with the court to delay this process anytime you want.
However delaying the inevitable only makes matters worse.
The important thing to note here is money answereth all things. It’s all about the Benjamins.
At this stage, you need to decide to keep or sell from a very objective standpoint.
I will cover how to make that decision in the next chapter.
It’s even more important at this stage to write every thoughts and action down by the day.
STAGE 5 – Entry of Final Judgement/Writ of Execution – 200 Days
At this stage, you can still save your property and most importantly your credit but of course, it’s getting more difficult by the second.
The mortgagee will now request the court to enter a final judgement against all entities of interest including you.
Some folks will file bankruptcy here but the truth is that you have other choices.
You always have the right to consult with an attorney during any of these stages. That takes us to the next stage.
STEP 6 Foreclosure Process in NJ – Sheriff Sale/Writ of Execution – 260 Days
Between 250 and 300 days, you can expect a notification of the official date when your property would be auctioned of at a county sheriff sale.
The writ of execution, the actual authorization to sell the property at a sheriff auction sale, is issued.
In some counties, the writ of execution is actually issued during the last stage; the entry of the final judgement.
But again as always, it doesn’t matter.
This is all about the money and collecting the money you owe.
Once in a while, I speak to clients who did not pay enough attention and feel as though it’s unfair once at this stage.
I think the mortgagee and New Jersey foreclosure laws has been more than fair.
Think about it.
It’s been 250+ days since your last mortgage payment.
Fortunately or unfortunately, this is America and rent or some type of housing expenses will be incurred either you like it or not.
Essentially, you’ve been living rent free for 250 days plus.
If you were in the position of the mortgage bank and your customers have not made a single payment in 250+ days (almost one year), that doesn’t leave much room for profitability right?
So you and I can agree that this system is fair but more importantly, it really doesn’t matter.
Solution towards a better financial future is all that matters and all we should focus on at this stage.
Congratulations because we will be covering that in the next chapters.
STAGE 7 – Deed Transfer/Deficiency Judgements/Eviction – 300 Days
This is the last stage.
The auction has happened and quite a few things such as deed transfer, deficiency judgements, eviction and etc will happen behind the scenes.
If there is enough interest in the deal, your mortgage bank will actually buy the property over and attempt to extract all the value.
Gone are the days, when it’s all about any bid at the auction. Back then the bank may take as low money as possible, walk away and then file a judgement for the balance against you.
Gone are those days for real.
Never forget that this is about money and maximum revenue for the mortgage bank.
The big mortgage banks have created systems to work with local realtors.
These systems are turning properties at sheriff sales into real estate owned (R.E.O or bank owned).
Essentially, the bank buy the property from itself (don’t ask how…) and list it with a local real estate broker to collect the highest bid and fair market value while they work on kicking you and/or your tenants out with a legal eviction order simultaneously.
I’ve actually helped people stop foreclosure and save their credit from further doom at this stage before.
Was it luck?
I guess you can say that.
It’s very risky to wait as opposed to take action in early stages.
But there is also skills involved.
I’ll be sharing your options later in this book.
More importantly, I want you to know that there is a chance to stop foreclosure at any of these stages.
As always, it’s all about the money.
When there is money, there is a way. But I also want you to note this.
I didn’t say anything about the money needed necessarily having to be your money.
It doesn’t have to be your money in order to use it to stop foreclosure.
You do not need money.
You need a solution that fits your particular scenario.
In fact, you don’t have to come up with the solution.
That’s why this book was written.
You emotions are mightily engaged at this stage.
If you don’t suppress it with an objective outlook on the matter, more damages will follow.
It’s time to talk about your options now from a realistic stand point.
“You can avoid reality but you cannot avoid the consequences of avoiding reality.” ~ Ayn Rand.