As outlined by the Consumer Financial Protection Bureau, federal law prohibits mortgage lenders from initiating a foreclosure unless you failed to make a payment for at least 120 days. As noted by the National Consumer Law Center, however, new and possibly short-term emergency procedures may extend the pre-foreclosure period for certain borrowers until the end of 2021.
Prior to the 2021 temporary emergency procedures and as reported by NJ.com, the average completed foreclosure process that ended in a lender seizing property in New Jersey took more than 1,000 days. For Monmouth County homeowners, the completed process averaged 1,322 days in 2016.
When may a lender start the foreclosure process?
Your mortgage agreement generally outlines when a lender may consider your property in default and begin the foreclosure process. As noted by Realtor.com, some lenders may send an initial Notice of Default when a homeowner has not made a mortgage payment in 30 days. The notice in this case, however, may only serve as a simple reminder to send in a payment.
If temporary financial issues cause you to fall behind in payments, you may consider contacting your mortgage servicer to request an alternative arrangement. The lender may allow an additional 90 days to catch up on late payments.
How much advance notice must a lender provide before beginning a foreclosure?
New Jersey law requires residential lenders to provide homeowners with at least 30 days’ notice before initiating a court action to foreclose on a property. Lenders must provide notice by both certified and regular mail before starting the legal process to retrieve a borrower’s home.
Because it may normally take some time to foreclose on a home in New Jersey, borrowers usually have time to consider a defense. In addition to filing for bankruptcy, options to avoid foreclosure may include a loan modification, short sale or forbearance request.