We Buy Houses In New Jersey. We are homebuyers in NJ and we offer cash for houses in NJ. Understanding the foreclosure process in New Jersey is an important part of navigating your own home foreclosure. Before we dive in…
Understanding The Foreclosure Process In New Jersey
What Is Foreclosure Anyway In NJ?
Foreclosure is the legal process that lenders use to take back property securing a loan, generally, after the borrower stops making payments.
Foreclosure is no fun. But just know that it’s not the end of the world.
When you know how foreclosure in New Jersey works, it arms you with the knowledge to make sure you navigate it well and come out the other end as well as possible like staying in your home.
The Basic Stages Of A Foreclosure In New Jersey
There are a few stages that are important to any foreclosure process.
Foreclosure works differently in different states around the country.
In either scenario, foreclosure typically doesn’t go to court until 3-6 months of missed payments have elapsed. Usually (but not always), a lender will send out many notices that you are in arrears – overdue or behind in your payment.
Under Judicial Foreclosure In NJ:
- Your mortgage lender must file suit in the court system.
- You’ll get a letter from the court demanding payment.
- Assuming the loan is valid, you’ll have 30 days to bring payment to court to avoid foreclosure (and sometimes that can be extended).
- If you don’t pay during the payment period, a judgment will be entered and the lender can request the sale of your property – usually through an auction.
- Once the property is sold, the sheriff serves an eviction notice and forces you to immediately vacate the property.
Under Power Of Sale (Or Non-Judicial Foreclosure) In NJ:
- The mortgage lender serves you with papers demanding payment, and the courts are not required – although the process may be subject to judicial review.
- After the established waiting period has elapsed, a deed of trust is drawn up and control of your property is transferred to a trustee.
- The trustee can then sell your property to the lender at a public auction (notice must be given).
Anyone who has an interest in the property must be notified during either type of foreclosure.
For example, any contractors or banks with liens against a foreclosed property are entitled to collect from the proceedings of an auction.
What Happens After A Foreclosure Auction In New Jersey?
After a foreclosure is complete, the loan amount is paid off with the sale proceeds.
Sometimes, if the sale of the property at auction isn’t enough to pay off the loan, a deficiency judgment can be issued against the borrower.
A deficiency judgment is where the bank gets a judgment against you, the borrower, for the remaining funds owed to the bank on the loan amount after the foreclosure sale.
Some states limit the amount owed in a deficiency judgment to the fair value of the property at the time of sale, while other states will allow the full loan amount to be assessed against the borrower.
Here’s a great resource that lists the state by state deficiency judgment laws, since every state is different.
Generally, it’s best to avoid a foreclosure auction. Instead, call up the bank, or work with a reputable real estate firm like us at DNT Home Buyers to help you negotiate discounts off the amount owed to avoid having to carry out a foreclosure.
Experienced investors can help you by negotiating directly with banks to lower the amount you owe in a sale – or even eliminate it, even if your home is worth less than you owe.
Sell My House In New Jersey
If you need to sell your house in NJ, we can help you. We purchase homes in New Jersey like yours from people who need to sell fast. We’re New Jersey home buyers and at DNT Home Buyers, we believe in a 100% no-hassle and no-obligation process. Give us a try!
Fill out the short form on this site or give us a call anytime at (732) 352-9065. We’ll get some basic information about your house and within 24 hours we will send you a formal written offer. If the offer works for you, we’ll work with a local neutral 3rd party title company to put the sale paperwork together and set a closing date that fits your schedule.
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Another Foreclosure Resource For New Jersey Home Owners: Resources On Avoiding Foreclosure from the U.S. Government >>