After seven years of slogging through record numbers of foreclosures, there may be a light at the end of the tunnel for the New Jersey court system—and for struggling homeowners. New Jersey court officials are making strides unclogging a backlog of foreclosure cases and sorting through all of the twists and turns in cases that may involve foreclosure fraud and “robo-signing.” 

New Jersey has long been ranked second in the country in the percentage of homes in foreclosure or mortgages with payments over 90 days past due. Court officials note that several complex factors led to the backup of cases in the system. One, of course, is the record number of foreclosure proceedings being filed. Another is that most defendants do not contest the foreclosures filed against them. In fact, in New Jersey just a little over 5 percent actually fight back.

Last year about 83,500 foreclosure cases were dismissed in New Jersey as a new automated tracking system kicked into gear. The program hunts down foreclosure cases that have languished for a year or more. If the plaintiff bank or mortgage lender holding the loan doesn’t respond to a court notice in a timely manner, the case is dismissed. According to a news report, open cases dating back to the 1990s have finally been closed.

While these changes may be a step in the right direction, a few problems still exist in the system for homeowners. One is that when a foreclosure action is dismissed, the system only notifies attorneys who are listed as representing someone in the case, so an unrepresented homeowner may not know that their case has been dismissed.

The foreclosure process is very long and complicated in New Jersey. Homeowners are often wise to seek legal counsel as soon as they begin to fear losing their homes. In many cases, it is possible for homeowners to successfully stop foreclosure, protect their homes, and regain solid financial footing. In some cases, this is done by filing for bankruptcy and in others it is possible to negotiate work-outs.

Source: NJSpotlight.com, “New Jersey breaks foreclosure logjam, yields flood of dismissals,” Joe Tyrrell, March 3, 2014