Prepared by Kathleen Magoon, Supervising Foreclosure Attorney and Christopher DeNardo, Managing Partner, Shapiro & DeNardo, LLC, serving PA + NJ
2019 was a busy year in New Jersey, with nine new statutes enacted that impact mortgage foreclosure. In addition to these statutes, the Legislature and the Courts are heavily promoting borrowers’ entry into the Court’s sponsored Mediation Program.
Further, the Courts and the Office of Foreclosure introduced a new wrinkle in the Mediation Program in that once a borrower accepts a trial loan modification, the Court will close the case. In a measured effort to remove matters from the Docket, the Court takes the position the case will be considered “settled” upon the borrower’s acceptance of an offer of a trial loan modification.
While the Court understands that acceptance of a trial plan is only a first step to the actual modification of the loan, it will now treat the case as closed upon this first step and allow it to be reactivated if the borrower defaults on the loan modification while in the trial plan period. To reactivate, Lenders’ counsel must file a certification with the Court within 60 days of the borrower’s default. This certification will advise the Court the date the loan modification was offered, the date the offer was accepted, the date of the borrower’s default, and details as to what triggered the default. If Lenders’ counsel fails to file a certification within 60 days from the borrower’s default, a motion to reinstate the case to active status must then be filed with the Court to proceed with the foreclosure.
It is imperative for lenders and servicers to notify their counsel immediately when a borrower defaults under a trial plan. Doing so will allow plaintiff’s counsel to prepare and file the certification within the 60-day period from borrower’s default, permitting plaintiff to move with a certification to reactivate the foreclosure action. Otherwise, plaintiff will have to file a motion to reinstate the foreclosure to active status, adding to further delay the foreclosure.
To learn more about this new requirement, or any of the nine statutes enacted in 2019, contact Attorney Magoon at firstname.lastname@example.org or (856) 793-3080, ext. 3437 for additional information or questions.
This blog post is provided for educational and informational purposes only and is not intended and should not be construed as legal advice or used as a substitute for competent legal advice. By using this information, you understand that there is no attorney-client relationships between you and the author of this post.