Aiming to give homeowners a fair chance to get back on track with their mortgage payments, a bill sponsored by Assembly Democrats Angela McKnight, Paul Moriarty and Benjie Wimberly to require lenders to send a notice of intent to foreclose no more than 180 days before action was signed into law Monday by Governor Phil Murphy.
“Homeowners deserve to be given adequate notice when the foreclosure process begins,” said McKnight (D-Hudson). “In that time, they will have an opportunity to reinstate their mortgage and being making regular payments again, or explore other housing options. It’s only fair to give them that chance.”
The new law (formerly A-5003) revises the Fair Foreclosure Act to require that a notice of intention to foreclose not be sent more than 180 days in advance. This includes a notice of the right to cure the default, which currently must be sent at least 30 days, but not more than 180 days, in advance of a residential mortgage lender beginning foreclosure or other legal action to take possession of a residential property.
Under the law, if more than 180 days had elapsed since the date of the notice of intent was sent, and any foreclosure or legal action had not begun, a new notice will be sent at least 30 days, but not more than 180, in advance.
“Unfortunately, New Jersey leads the nation in foreclosures, with 70,000 properties going through the process in 2017,” said Moriarty (D-Camden, Gloucester). “We must do all we can to get that number down and keep families in their homes. This law will give homeowners the time and notice they need to take action.”
“There are multiple procedural steps in the foreclosure process that are meant to protect homeowners. A notice of intent to foreclose is that first step,” said Wimberly (D-Bergen, Passaic). “If homeowners are given enough notice, they may be able to avoid foreclosure altogether.”
The new law provides that if a plaintiff’s action to foreclose a residential mortgage has been dismissed without prejudice pursuant to the Rules Governing the Courts of New Jersey of the State of New Jersey, reinstatement of the plaintiff’s action could be permitted only on motion for good cause shown and reinstatements will be limited to three for any action.
Additionally, the law now provides that the amounts paid by plaintiffs for reinstating a mortgage would be aggregated and divided equally on an annual basis, with one-half dedicated to the New Jersey Housing and Mortgage Finance Agency for funding for counseling provided by the agency for the New Jersey Judiciary’s Foreclosure Mediation Program, and one-half dedicated to the Administrative Office of the Courts for the general operations provided by the office for the New Jersey Judiciary’s Foreclosure Mediation Program.
It will take effect in four months.