Despite employing a number of practices in response to the mortgage crisis in 2008, New Jersey has had one of the highest foreclosure rates among all states since 2015. In a continued effort to address this issue, New Jersey Chief Justice Stuart Rabner established a Special Committee on Residential Foreclosures in 2017 to review current practices, policies, court rules and legislation and develop suggestions for reform. Last year, the Committee released its report, which summarizes the history and current state of foreclosure in New Jersey and includes recommendations for reform. Towards the end of their report, the Committee notes that not only do unresolved foreclosures lead to thousands of cases remaining on court dockets, but they also depress property values, burden municipalities and reduce tax revenues.
Building on the recommendations from the Committee, the New Jersey legislature is currently considering a ten-bill package that would reform the residential mortgage foreclosure process. Introduced at the end of January, this package of ten bills seeks to expedite the foreclosure process, decrease the amount of time foreclosed properties remain on the market, and make the foreclosure mediation program permanent. The following chart summaries each bill being considered.
|Recommends revising the Fair Foreclosure Act (“FFA”) to require that notices of intention to foreclose are filed at least 30 days (but no more than 180 days) before foreclosure commences. Additionally, the bill also requires that these notices also include a notice to homeowners that they are entitled to housing counseling through the Foreclosure Mediation Program.|
|Requires the Department of Community Affairs to create a database with an interactive map that details the foreclosed properties in the state. To fund this database, this bill also establishes a $30 fee that would be collected when deeds are recorded.|
|Modifies the foreclosure process to expand the definition of what constitutes a vacant and abandoned property and requires that sales of foreclosed properties occur within 60 days of a foreclosure judgment.|
|Allows all common interest community associations to record liens for unpaid assessments.|
|Requires creditors and their in-state agents to file their contact information with the Superior Court.|
|Clarifies that the New Jersey Residential Mortgage Lending Act also applies to any out-of-state person involved in residential mortgage lending in the state.|
|Requires anyone acting as a mortgage servicer to obtain a license from the state Department of Baking and Insurance.|
|Reduces the statute of limitations for residential mortgage foreclosure actions under the FFA from 20 years to six years from the date on which the homeowner defaulted.|
|Focuses on expediting residential mortgage foreclosure proceedings. Under this bill, sheriffs would be required to conduct foreclosure sales within 120 days of receiving orders to foreclose.|
|Codifies the Foreclosure Mediation Program and makes several adjustments to the program. These changes include notifying homeowners about the program when they receive their intent to foreclose and again when a mortgage foreclosure complaint has been filed against a property. The bill also requires that these written notices must be available in both English and Spanish.|
Although these bills have several more hurdles to pass before becoming law, their introduction indicates cooperation among the executive, legislative and judicial branches during the state’s foreclosure reformation.