How Long Does It Take in New Jersey to process a residential foreclosure action from start to finish?
The foreclosure time line in New Jersey has a number of variables depending on how the borrower reacts to each step along the way. New Jersey’s Fair Foreclosure Act specifies, albeit indirectly, the minimum time frames necessary to process a residential foreclosure action in New Jersey. At minimum, a un-contested residential foreclosure action can take as little as 169 days or, at maximum, as long as 200 days. This assumes the borrower is not working with an attorney and either did not file an Answer to the Complaint or filed what would be deemed a “non-contesting” Answer.
There are a number of basic steps to processing a foreclosure action in New Jersey.
Step One: Assuming default has occurred, the lender or its attorney must first notify the borrower that it is in default and that it has a right to cure that default 30 days prior to filing a Complaint in Court.
Step Two: File a Complaint with the Court, serve the Complaint on the borrower along with a Summons notifying the borrower that it has 35 days to file an Answer.
Step Three: assuming no Answer is not filed, the lender will ask the Court to enter a Default Judgment. This usually takes about 30 days.
Step Four: Notice to the borrower that it intends to file for entry of final judgment providing the borrower with 14 days to notify the lender that it has a good faith ability to cure within 45 days.
Step Five: Lender files it proofs to enter Final Judgment. This usually take 30 days.
Step Six: Final Judgment is entered and a Sheriff Sale is scheduled, borrower notified and the sale date is advertised in the official newspapers for four consecutive weeks. 28 days.
Step Seven: Sheriff Sale is completed.
Step Eight: Right to redeem expires and deed is transferred to buyer. 14 days
Total 181 days. This is the minimum.
If your case proceeds as an un-contested action, 181 days is the shortest amount of time to fully process a residential foreclosure action in New Jersey but often it takes longer than this 181 days.
Bank Delays In Hopes of an Improved Real Estate Market.
Banks, particularly in a situation where the value of the property may not be as much as the amount of the loan, will delay a foreclosure in the hopes that the value of the property will increase over time. In the meantime, they don’t aggressively process the case after the default judgment is obtained. There is a risk on the part of the lender, if either the Court or the borrower believes the lender is not in good faith processing the case, that the case might be dismissed for lack of prosecution.
Backlogs Can Add More Time.
Both lender attorneys and courts have been very backlogged with the large number of cases in process since the financial and housing crisis of 2008. It has been typical for foreclosure cases to take as long as 1000 days to process through the courts simply because of the large number of cases that have to be processed.
Optional steps that can prolong the process.
There are a couple of instances in the above steps where the borrower can add some time.
Optional Step One: In Step Three above, file an Answer within the 35 days provide for in the Summons. Although the Court may deem your Answer as “non-contesting” without a hearing, it may allow your case to proceed as “contested” if you file an Answer that raises certain facts about the loan. In such a situation a case management hearing will be held and the case will be schedule for a trial. It is very typical in this situation, though, that the lender will file a Motion For Summary Judgment challenging your Answer and have it deemed “non-contesting” and send it back to the foreclosure division for processing in the normal course. This entire process could however add a minimum of 30 days to the process and often longer.
Optional Step Two: In Step Four above, the borrower could notify the lender that it has the ability to cure. This could add 31 days to the process.
Optional Step Three: A borrower is entitled to two 2-week adjournment of the Sheriff sale for any or no reason. This could add an additional 30 days to the process.
Optional Step Four: Even though the property may have been sold at a Sheriff sale and you the borrower and homeowner have been ordered to vacate the property. If you don’t, the new owner will have to evict you as if you are a tenant at the property. This could add at minimum 14 days to the process but often adds 30 to 90 days if the judge believes you really need time to find a new home to move to.
Litigation As An Option.
Everything discussed above assumes you have not hired an attorney and do not have a valid defense to the foreclosure action. After consulting with an attorney, you may determine that it is to your benefit to contest the foreclosure action and fight back. This changes everything above. The time frames for a contest action are subject to much variation but more than likely would be much longer than the time frames set forth above.
Practically Speaking What Are the Time Frames I Can Expect?
Generally in New Jersey, we have been seeing cases take 18 to 36 months and sometime much longer than that if the lender simply does not process the case. However, backlogs have been reduced quite a bit as of this date in mid-2015 and I just saw a case yesterday that went from Complaint to Sheriff sale in less than 12 months.
Every case is different.