Nobody wants to fall behind on their mortgage payments, in New Jersey, or any other part of the country. Once you fall into arrears on your mortgage the next thought on your mind is when the bank might foreclose on your property, with the obvious fear being that you’ll become homeless in a matter of weeks.
The economic crisis of 2008 is now starting to resolve itself, and the number of foreclosures across the country is decreasing, but many families are still struggling to get by, leaving their homes at risk of foreclosure.
So, if you find yourself in a position where you know you’re going to default on your mortgage, it’s important to know the exact timelines involved in the bank foreclosure process.
Proposed Timeline
How the foreclosure process is meant to work in New Jersey is that once you’ve missed three payments on your mortgage the bank will send you a notification by mail that you are now in default on your mortgage. Your lender will then ask you to repay the full outstanding amount. Typically, the lender will not accept a partial payment.
If you don’t respond to your lender, they will then take the first step in the judicial foreclosure process by filing a complaint with the court. You will receive a copy of this same complaint, and be given 35 days to answer. Please understand that ignoring the complaint means that you’re admitting you’re defaulting on your mortgage.
Not entering a defense on your part will result in the court creating a judgment in favor of the bank, and they will then be permitted to advertise your home for sale. If, at this point, you do enter a defense your case will move to the General Equity judge in the county your home is in, extending the judicial foreclosure timeline.
When you default on your mortgage on a property in New Jersey what should happen is that the bank forecloses within 90 days, and your home is then sold shortly afterwards. That, however, is not an accurate representation of the facts.
The Actual Timeline
The housing crisis is still a very real issue for banks today in terms of the sheer volume of homes in the judicial foreclosure process. This backlog means that although your lender should be able to foreclose on your home in as little as 90 days, a more realistic timeline is anywhere from six months to three years before you lose possession of your home.
This timeline only applies to the judicial foreclosures though – a non-judicial foreclosure can be completed in a matter of a few weeks. Please also bear in mind that the backlog of defaulted mortgages should never be used as an excuse for simply not repaying your mortgage because you know it could take more than a year for your lender to take action against you.
Entering the foreclosure process isn’t the end of the world, and most lenders will be happy to work with you to come to a financial resolution which works for everyone involved.