What is it? When you purchase a house with a mortgage, the lender has an ownership interest in the property until the mortgage is paid off. If the mortgage is not paid, the bank has the right to take title and full ownership in the property. The legal process by which this is done is foreclosure.
How long does it take? Given our very clogged courts in New Jersey in general, and Ocean County in particular, the time from when the Complaint is served to the Sheriff locking the front door is up to two years.
What can I expect to happen? The lender is legally required to take certain steps in a foreclosure. A homeowner will be served first (via certified mail or personal service) a Notice of Intent to Foreclose. It will be clearly labeled as the intention to foreclose and will give the homeowner a certain number of days to bring their mortgage current. The lender can take no further foreclosure action until the period stated in the Notice of Intent to Foreclose has expired. If the homeowner takes no action, a Complaint is filed with the Foreclosure Unit of the Superior Court in Trenton. The homeowner is offered the option to enter into mediation (which this office highly recommends) and is given 35 days in which to respond in writing to the Complaint.
Then what? Sadly, there are very few defenses homeowners can use against a foreclosure if they have not and cannot pay the mortgage. A judgment is entered against the homeowner, and the matter is scheduled for Sheriff’s sale.
When will the Sheriff’s sale be? The homeowner will be notified of the date of sale. Because of the number of sales, the original date of the sale is frequently adjourned to a later date. All homeowners are entitled to two adjournments of the sale on request, for two weeks each adjournment.
What happens once the sale has taken place? The Sheriff will sign a deed giving title to the bank. Once the sale takes place, the homeowner has a 10 day period in which they can redeem the property by paying the outstanding amount of the mortgage. If the homeowner cannot pay, the Sheriff secures the property for the lender at the end of the 10 days.