New Jersey Foreclosure Laws

New Jersey foreclosure laws allow judicial or in-court foreclosures only, which means that all foreclosures in the state are administered through courts. Most foreclosures take approximately nine months.

Pre-Foreclosure

The lender starts the pre-foreclosure period by mailing a letter to the debtor, alerting the debtor that foreclosure may take place. This letter must be sent a month before the lender initiates the foreclosure. At this stage, the debtor can pay off the default in full and therefore prevent the foreclosure.

If the debtor does not pay the full default amount, the lender can record a lis pendens with the county clerk. This is a notice of a pending lawsuit that initiates the foreclosure process proper in New Jersey. The lender may choose to sue for the entire amount owing on the loan or only for the default amount. Once the lis pendens is filed, the debtor must be notified of the filing in person. If the debtor cannot be found, the notice of the filing can be published. Once the notice has been served to the debtor or published, the debtor has a minimum of 25 days to reply to the filing. If the court rules in favor of the lender, the lender can schedule an auction date.

Notice of Auction

Before the auction can take place, a notice of sale (also known as a notice of auction) must be posted in the local county office and on the property itself. The notice must also be printed in two local newspapers. One of these newspapers must be based in the county seat or in the county's largest municipality. At least ten days before the auction date, notice must be sent to the debtor or homeowner of the pending sale.

Foreclosure auctions in New Jersey are conducted by a sheriff or other county officer and the highest bidder is considered the winning bidder. Within ten days of the auction the ownership of the property is transferred to the winning bidder. A court must confirm the sale. During the ten days after the auction, the debtor can raise any concerns or contest the sale with the court. This ten day time frame is the only redemption period.