Preforeclosure

• In New Jersey, the pre-foreclosure period begins when the lender notifies the borrower that they are prepared to begin the foreclosure process. This must occur 30 days before the lender can file an official notice with the court system. The borrower is entitled to initiate foreclosure if the borrowers fail to adhere to the terms of the loan agreement. Often, the lender will send the notice if the borrowers are two to three months behind on payments.
  
  

Filing Suit

• Once the borrowers are notified, they have the option to contact the lender to reach an agreement or repay the default amount. If the borrowers do not do this within 30 days of receiving the notice, the lender must file a formal complaint known as a lis pendens with the court. Once the lis pendens has been accepted by the court, the borrowers have 35 days to respond. If they fail to respond or remit the payment requested by the lender, the court can rule in favor of the lender. From here, a foreclosure sale date can be scheduled.
  
  

Foreclosure Sale

• In New Jersey, the county sheriff oversees foreclosure sales. The borrowers must be notified at least 10 days before the sale date of the pending sale. The sheriff also must advertise the sale information in a public newspaper. The foreclosure sale occurs in auction format, and the highest bidder wins the property. The sheriff signs a deed granting ownership to the winner. However, in New Jersey the borrowers have a 10-day redemption period to contest the sale to the court.
  
  

Options

• When facing foreclosure, borrowers have a few options in New Jersey. Borrowers can choose to file for Chapter 13 bankruptcy. This is a voluntary process that allows for borrowers in debt to renegotiate payment terms with their creditors. Once the bankruptcy is approved, the creditors cannot soliciate the borrowers for payments or report negative remarks to the credit bureaus. Another option is to negotiate a short sale or deed in lieu of foreclosure with the lender. Both of these options avoid foreclosure, but the borrowers will loose the house. The state of New Jersey also offers a foreclosure mediation program for borrowers in fear of foreclosure. This program provides free legal advice and the aid of attorneys to borrowers.