Judicial vs Non Judicial Foreclosure States

7953227784_d71b2d2c8a_zEvery state has different rules when it comes to foreclosures. Some states require that all foreclosures proceed through the court system, while others have foreclosure procedures to be followed outside of the court.

For those people who live in a nonjudicial state, lenders are not required to file anything with the court before they begin the foreclosure process. This type of foreclosure moves a lot faster than if proceeding through a court system, as you can imagine.

It’s important to know if you live in a nonjudicial state, because you may have very little time to save your home before it’s too late. In fact, many homeowners who live in nonjudicial states discover they are being foreclosed on when they receive a notice of the sale of their home. In some states, it doesn’t even have to be delivered to you, and you may find out by reading the newspaper.

If you signed a promissory note and a deed of trust when you purchased your home, you most likely reside in a nonjudicial state. Find out more about nonjudicial foreclosures and which states allow them here.

New Jersey is a judicial foreclosure state. This means that the entire foreclosure process is required to take place through the NJ court system. In recent years, New Jersey has experienced a high number of foreclosures, causing a court system back up. Even when the court system isn’t back logged, a judicial foreclosure will take longer than a nonjudicial foreclosure due to all of the legal steps lenders are required to follow.

New Jersey homeowners who start missing mortgage payments should be aware that lenders can begin the foreclosure process after just one single missed payment. Most lenders won’t begin the process until several (or many) payments go unpaid.

In judicial states, lenders have to send delinquent borrowers a warning letter of sorts, called “Notice of Intent to Foreclose.” At this point in the process, it is still very possible to stop the process before it even really begins by catching up on any payments you missed.

If, however, you fail to get current on your payments, your lender will proceed to court to open a case against you for failure to pay your mortgage. After they file an initial complaint, you will be served with (sent or delivered) a copy of the complaint along with a summons.

A summons essentially alerts you to the fact that there is a case against you, and also gives you time to respond to the complaint. Your choices are to either:

  1. Not respond, which will push the foreclosure through and your home will be sold at auction, meaning you will be evicted; or
  2. Respond, if you feel you are able to (and want to) keep your home. At this point in the process, a foreclosure defense attorney is key.

By working with an experienced foreclosure defense lawyer in New Jersey, your foreclosure can be slowed down significantly or even stopped altogether, if your defense is strong.

At the end of the judicial foreclosure process, the judge in charge of your case will decide either in your favor or in favor of the lender. If you “win,” you will still need to figure out how you’re going to pay your mortgage bill every month to get back on track, or you will end up back in foreclosure very quickly.

If the judge decides against you, your lender will notify you of their intent to sell your home. If you are unable to redeem your home, it will be sold at auction. Until the sale date, you can remain in the home. Your lender will send you a letter of eviction letting you know when you officially must find a new place to live.

Image credit: Stock Monkeys

4 Responses to Judicial vs Non Judicial Foreclosure States

  1. Pingback: Foreclosure in New Jersey: How Long Does it REALLY Take? | Veitengruber Law

  2. Pingback: NJ Foreclosure and the Order to Show Cause | Veitengruber Law

  3. Pingback: Cleaning Up Abandoned Homes in New Jersey | Veitengruber Law

  4. Pingback: Top Reasons Foreclosed Homes in New Jersey Won’t Sell | Veitengruber Law

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