Foreclosure Bill Package Signed Into Law

Trenton – A bill package sponsored by Senate Community and Urban Affairs Committee Chair Troy Singleton, Senator Dawn Marie Addiego, Senator Ronald Rice and Senator Steve Oroho, which will tackle the surge in foreclosures and streamline pending cases, was signed into law by Governor Phil Murphy today.

The impetus for these new laws stems from the May 2017 report released by Chief Justice Stuart Rabner and the Special Committee on Residential Foreclosures.  This report was the culmination of work from key stakeholders in the process such as the Administrative Office of the Courts (AOC).

“We are all aware that the surge in foreclosed properties is a significant factor that hinders more sustained economic growth in our state,” said Senator Singleton (D-Burlington). “Solving the foreclosure issue by preventing homeowners from initially falling into this process will help to increase property values and stabilize our communities, while improving our state’s overall economic outlook.”

“This issue is not new. However, the comprehensive approach outlined in these bipartisan laws is unprecedented in our state. They will build upon the continued reduction in pending foreclosure cases and shorten the timeline to adjudicate these cases. This is a reflection of the work undertaken by every branch of our state government,” continued Singleton.

“Numerous foreclosed homes create negative impacts that are felt throughout the community. They drive down the number of families interested in moving to our communities, creating a domino effect which stifles economic growth throughout the state,” said Senator Addiego (D-Burlington/Atlantic/Camden). “These new laws will help us solve this problem with newly reformed procedures to make the foreclosure process more modernized.”

“In 2017, New Jersey led the country with nearly 70,00 foreclosures. This can no longer happen on our watch, and I am glad we are finally doing something about it,” said Senator Rice (D-Essex). “These new laws will strengthen the mediation program in New Jersey by promoting remedy options for those homeowners in the initial stages of the foreclosure process.”

“Foreclosures are tragic situations for New Jersey families that can also create public safety as well as quality of life issues for surrounding communities,” said Oroho. “Doing our part to reduce the foreclosure rate statewide will protect families, make neighborhoods safer, and provide children the stability they need both at home and at school. I am proud Governor Murphy signed our bipartisan bill package into law. Stable homes will lead to happier households and better neighborhoods throughout our state.”

The following laws were sponsored by Senator Singleton, Senator Addiego, Senator Rice, and Senator Oroho:

The first law will require that a notice, with the intention to foreclose, will not be sent more than 180 days in advance of taking that action. Previously, a notice would have to be sent at least 30 days in advance of a residential mortgage lender initiating a foreclosure or other legal action to take possession of a residential property.

The second law will make changes to the summary action foreclosure process under the “Fair Foreclosure Act” by clarifying the method by which foreclosed properties can be sold on an expedited timeline.

The third law will permit all common interest community associations to record a lien for unpaid assessments, and provide limited priority over prior recorded mortgages and other liens for nine months-worth of unpaid customary assessments.

The fourth law will require the filing of certain contact information of creditors with a residential mortgage foreclosure complaint and pending legal action.

The fifth law will clarify that the provisions of the “New Jersey Residential Mortgage Lending Act,” also apply to certain out-of-state persons and entities involved in residential mortgage lending in the State. Debtors would be provided with a notice that the lender is licensed in accordance with the Act.

The sixth law, entitled the “Mortgage Servicers Licensing Act,” will require any person acting as a mortgage servicer to obtain a license from the Commissioner of Banking and Insurance for each main office and each branch office where business is conducted. The commissioner will also issue a mortgage servicer license to an applicant if the commissioner makes certain findings, including that the applicant has met certain financial and character and fitness requirements.

The seventh law will revise the statute of limitations in residential mortgage foreclosure actions from 20 years to six years from the date on which the debtor defaulted, and in situations in which the date of default is used as the method to determine when the statute of limitations has expired.

The eighth law will revise certain procedures under the “Fair Foreclosure Act” to expedite residential mortgage foreclosure proceedings. It will also require the county sheriff to conduct a foreclosure sale within 120 days of the sheriff's receipt of a writ of execution.

The last law will codify the Judiciary’s Foreclosure Mediation Program, and will dedicate funds from foreclosure filing fees and fines.