Having missed mortgage payments is not something most people expect to have happen when they first buy their home. In fact, nobody ever signs up for a mortgage thinking they’ll ever miss a payment. But even more worrying is the fact that you might be facing foreclosure on your home in the near future because of lapsed payments. This can lead to a lot of sleepless nights and worry about finding somewhere new to live, while also dealing with the embarrassment of losing your home. So the question we need to tackle here is exactly how fast can a bank or lender foreclose on your home in the state of New Jersey?
State Foreclosure Data
What you might not realize is that New Jersey actually leads the nation in terms of the number of foreclosures, with 70,000 properties going through the process in 2017 alone.
Something else you might not be aware of is that this process takes longer in New Jersey than any other state in the country. There are a number of checks and balances in place to ensure that foreclosure is the very last option available to a lender, and not their first option.
This fact might have a hidden benefit for you, which we’ll explain shortly
The Foreclosure Timeline
If you miss three mortgage payments, you will receive a “Notice of Default” 30 days after you miss your fourth payment.
This is the first step in the foreclosure process. What happens in most states is that the bank will then attempt to create a new repayment arrangement with you, but failing that they’ll begin the process of selling your home to recoup their losses.
During this time you could also try to negotiate a short sale or alternative payment plan to prevent the blot that a foreclosure will leave on your credit history
Typically an uncontested foreclosure (one where you don’t try to come to an alternative arrangement) can take up to 8 months to complete, or in excess of 250 days
As it stands right now, however, a foreclosure in New Jersey is likely to take over 1,200 days to complete. The main reason for this lengthy timeframe is all foreclosures in the state are judicial in nature.
What this means is that your lender needs to file a lawsuit against you (the borrower). The borrower must then be given time to either remedy the situation through an alternative repayment plan, before finally accepting that their home must be sold to repay the debt they owe to the bank.
Under normal circumstances this entire process would only take between 6 and 8 months to complete, but the judicial foreclosure process slows things down so much that it creates a state-wide backlog of cases.
And this is why, even if you’ve missed several mortgage payments and entered the foreclosure process, that it could take almost 4 years before you’re required to vacate your home.
The Redemption Period
New Jersey state law also provides for something called a “Redemption Period”. This is the amount of time allowed between when your foreclosure is complete, and when you are required to vacate your home.
You can also attempt to buy back your home from the lender at the foreclosure price during the redemption period. The only issue here is that New Jersey only offers a redemption period of 10 days, which leaves you with a very narrow window of opportunity.
So, in summary, a bank in New Jersey should be able to foreclose on your home within 250 days, but it normally takes in excess of 1,000 days to complete the process.