There are two types of foreclosure laws in the United States. About two thirds of the states allow for a procedure known as "foreclosure by power of sale." Under this method, a mortgage holder can sell property subject to foreclosure without needing to resort to court supervision. About two-thirds of states allow for the use of foreclosure by power of sale, which allows for faster and less formal home foreclosure sales. New Jersey, however, is not one of them.
In the minority of states foreclosure by judicial sale is the only route through which a home subject to foreclosure may be sold. In New Jersey, this involves two layers of Superior Court involvement in order to affect a foreclosure sale: the Office of Foreclosure and Superior Court General Equity judges. In addition, state law requires all foreclosure pleadings to be filed in Trenton with the Foreclosure Processing Services subunit of the office of the Superior Court Clerk.
The purpose of judicial involvement and centralization of filings is to promote uniformity and efficiency in foreclosure proceedings statewide. Thus, for example, all foreclosure complaints in the state, and answers to those complaints, are subject to review by the Office of Foreclosure to ensure that the filed documentation meets the proper legal requirements for validity.
Any disputes are sent for resolution to the General Equityjudge in the county where the foreclosure is taking place, and once any dispute is resolved it is then returned to the Office of Foreclosure.
Although foreclosure by judicial sale has the advantage of preventing possible abuses by mortgage holders who would otherwise be able to force foreclosure sales with no court oversight, the trade-off is that foreclosures in New Jersey tend to take longer than in states that allow for foreclosure by power of sale. Another consideration to keep in mind is that the particular filing requirements for the mortgage holder and for the homeowner make it important to have a clear understanding of how the state's foreclosure laws work.
This post provides only an overview of the subject of foreclosures in New Jersey. It is not meant to be specific offered or relied upon as legal advice. If you have questions about how foreclosures are undertaken in New Jersey, you should seek legal advice from an attorney's office experienced with foreclosure cases.