Foreclosure Process and Laws in New Jersey

If you default on your mortgage payments in New Jersey, the servicer (on behalf of the loan owner, called the "lender" in this article) will eventually begin a foreclosure. In New Jersey, the lender files a lawsuit in court to foreclose.

New Jersey foreclosure law specifies how the judicial foreclosure process works, and both federal and state laws give you rights and protections throughout the process.

What Are My Foreclosure Rights in New Jersey?

Both federal and state laws govern foreclosure procedures in New Jersey, and your mortgage contract gives you rights during the process.

Your Mortgage Rights in New Jersey

When you get a loan to buy residential real estate in New Jersey, you'll likely sign two documents: a promissory note and a mortgage.

• Promissory note. The promissory note is the document that contains your promise to repay the loan along with the repayment terms.
• Mortgage. The mortgage is the document that gives the lender a security interest in the property. If you fail to make the payments, the mortgage gives the lender the right to foreclose and sell the home auction so it can recover the money it loaned you.

You also get rights under the promissory note and mortgage. For example, if you're late making your monthly payment, most promissory notes provide a grace period of ten to fifteen days before you'll incur late charges. To find out the grace period in your situation and the amount of the late fee, check the promissory note.

If you default on payments, most mortgages require the lender to send you a breach letter (a preforeclosure notice) before officially starting a foreclosure. This notice tells you that the loan is in default. If you don't cure the default, the lender can accelerate the loan (call it due) and proceed with the foreclosure.

Your Rights Under Federal Foreclosure Laws

In most cases, federal mortgage servicing laws require the servicer to contact you (or attempt to contact you) by phone to discuss foreclosure alternatives, called "loss mitigation" options, no later than 36 days after a missed payment and again within 36 days after each following missed payment. (12 C.F.R. § 1024.39 (2025).)

No more than 45 days after a missed payment, the servicer must let you know in writing about loss mitigation options that could be available and assign personnel to help you. There are a couple of exceptions to these requirements, like if you file for bankruptcy or tell the servicer not to contact you under the Fair Debt Collection Practices Act. (12 C.F.R. § 1024.39) (2025).)

Federal law also generally requires the servicer to wait until the loan is over 120 days delinquent before officially starting a foreclosure. But in a few situations, like if you violate a due-on-sale clause or if the servicer is joining the foreclosure action of a superior or subordinate lienholder, the foreclosure can begin sooner. (12 C.F.R. § 1024.41 (2025).)

Protections If You're in the Military

If you're in the military, the federal Servicemembers Civil Relief Act provides certain legal protections against foreclosure.

Additional Foreclosure Rights in New Jersey

In addition, you have the right to:

• get a preforeclosure notice under state law
• not be dual-tracked (where the lender pursues foreclosure while also evaluating you for a foreclosure alternative)
• participate in foreclosure mediation
• receive notice of the foreclosure and the opportunity to respond
• get current on the loan to prevent a foreclosure sale
• pay off the loan to prevent a sale
• buy your home through the sheriff's sale process for the "upset price" (see below)
• redeem the home after the foreclosure sale, and
• get any extra proceeds ("surplus funds") after a foreclosure sale

Once you understand the New Jersey foreclosure process, you can make the most of your situation and protect your rights.

Is New Jersey a Judicial Foreclosure State?

Yes. In New Jersey, foreclosures go through court.

What Are the Steps in the New Jersey Foreclosure Process?

Again, in New Jersey, foreclosures go through court. The New Jersey Fair Foreclosure Act (N.J. Stat. § 2A:50-53 and following) and other state laws provide the rules lenders must follow before and during the New Jersey foreclosure process.

Here’s how the New Jersey foreclosure process works.

Preforeclosure Notice: What It Means for New Jersey Homeowners

The New Jersey Fair Foreclosure Act requires the lender to complete certain steps before filing a foreclosure complaint (lawsuit) against you. For example, before starting the foreclosure, the lender must send you (the borrower) a notice of intention to foreclose that provides at least 30 days to cure the default (get caught up in payments). You'll get information about the option to participate in the foreclosure mediation program when you receive a notice of intention to foreclose. (N.J. Stat. § 2A:50-56 (2025).)

The lender must mail you the notice a minimum of 30 days—but not more than 180—before foreclosure starts. (N.J. Stat. § 2A:50-56 (2025).)

How Foreclosure Starts in New Jersey

The lender gives notice of the suit by serving you a summons and complaint. You get 35 days to file an answer. (New Jersey Court Rule 4:6-1 (2025).)

Foreclosure Mediation in New Jersey

Along with the complaint and summons, you’ll again get a notice about foreclosure mediation. (N.J. Stat. § 2A:50-76 (2025).) A law passed in 2019, effective as of November 1, 2019, made New Jersey's foreclosure mediation program permanent.

A court may order mediation if you file an answer to the foreclosure complaint. Alternatively, the homeowner-borrower may initiate mediation in accordance with court rules. The court must provide you no less than 60 days following receipt of the foreclosure complaint and summons to initiate mediation. You don't have to pay any fees to participate in mediation. If you fail to request mediation within 60 days, you won't be allowed to participate unless there are exceptional circumstances. The mediation program doesn't automatically stop the foreclosure process from going forward. (N.J. Stat. § 2A:50-77 (2025).)

What Happens If You Do—or Don’t—File an Answer

If you don’t respond to the foreclosure suit, the lender may apply for an entry of foreclosure judgment. The lender must mail you a notice 14 days before applying for the final judgment, giving you one final chance to cure the default. If you respond to the notice within ten days, saying you intend to cure the default, the lender has to provide you with an additional 45 days to do that before it seeks an entry of final judgment. (N.J. Stat. § 2A:50-58 (2025).)

If you oppose the foreclosure in an answer and raise valid defenses to the action, your case will be transferred to the superior court in the county where the property is located and assigned to a judge. Then, a trial date is scheduled.

At the trial, the lender will try to prove to the court that it has the legal right to foreclose. You’ll attempt to convince the court that the lender shouldn’t be allowed to foreclose based on the reasons you set out in your answer.

Notice Requirements for Foreclosure Sales

If the court determines the foreclosure is proper, the lender must mail a notice of the sale to every party who has appeared in the action and the property owner at least ten days before the sale. The sheriff (the party that conducts the sale) posts a notice of sale at the property and in the sheriff’s office. (New Jersey Court Rule 4:65-2 (2025).)

The notice is also mailed to the primary address of the foreclosed-upon defendant and to the address of the foreclosed-upon residential property. Notice of the sale has to be mailed in an envelope that plainly states on its exterior that the envelope is a notice for the sale of the foreclosed-upon residential property. The notice is also published in two newspapers. (N.J. Stat. § 2A:50-64 (2025).)

Foreclosure Sales in New Jersey

At the sale, the lender usually makes a bid on the property using a "credit bid" rather than bidding cash. With a credit bid, the lender gets a credit up to the amount of the borrower’s debt. Sometimes, the lender bids the full amount of the debt; sometimes, it bids less. The highest bidder at the sale becomes the new owner of the property.

If a third party is the highest bidder and the foreclosure sale price is more than what you owe, the sale results in excess proceeds. If the excess proceeds are more than what's required to settle all the liens on your property, you're entitled to receive that surplus amount.

New Jersey's Community Wealth Preservation Program

New Jersey law allows certain parties, including foreclosed-upon defendants, their next of kin, tenants, other prospective owner-occupants, and nonprofit community development corporations ("preferred purchasers") a first and second right of refusal to purchase the property for an "upset price" via the sheriff’s sale. (“Upset price” means the minimum amount that a foreclosed-upon property will be sold for in a sheriff's sale as determined by the foreclosing plaintiff.) (N.J. Stat. § 2A:50-64 (2025).) Preferred purchasers don't have to compete in the open bid process with other interested parties (investors) who want to bid on the property. If a preferred purchaser doesn't exercise their right to purchase the home, the sheriff will conduct an auction for the property.

The lender must provide the upset price (an estimate, which can't increase by more than 3%) at least four weeks prior to the sheriff's sale and the price must be posted on the sheriff's office website and on any other medium used to provide notice of the sheriff's sale. So, if you want to know the upset price, you must look at the county sheriff ’s website. (N.J. Stat. § 2A:50-64 (2025).)

The requirements of purchasing your home this way are complicated. You'll have to provide a 3.5% deposit in the form of a cashier’s check, money order, or wire transfer before the opening bid at the foreclosure sale, with the rest of the balance due in 90 business days. If you intend to finance the purchase, you must provide documentation that you have been preapproved by a financial institution for financing the property. (N.J. Stat. § 2A:50-64 (2025).) Talk to a foreclosure lawyer if you need assistance.

Eviction Process in New Jersey After Foreclosure

If you don’t vacate the home following the foreclosure sale, the new owner, which is typically the lender, applies for a writ of possession from the court. The sheriff then executes the writ.

What Options Are Available to Borrowers During or After Foreclosure?

You might be able to prevent a foreclosure sale by participating in foreclosure mediation, reinstating the loan, redeeming the property before or after the sale, filing for bankruptcy, or working out a loss mitigation option, like a loan modification, short sale, or deed in lieu of foreclosure.

Reinstating the Mortgage Before the Foreclosure Sale in New Jersey

“Reinstating” is when the borrower brings the loan current by paying the missed payments of principal and interest, plus fees and costs. Completing a reinstatement will stop the foreclosure.

In New Jersey, you can cure a default (reinstate) at any time up until the entry of a final judgment. But there’s an advantage to acting quickly: If you cure the default before the deadline given in the notice of intention to foreclose, and then down the line, you default again, you'll get a chance to cure the default again. If you cure the default after the deadline in the notice has expired, you'll stave off foreclosure, but if you fall behind again during the next 18 months, you don't get the right to cure the default in the second foreclosure proceeding. (N.J. Stat. § 2A:50-57 (2025).)

Can You Get Your Home Back After Foreclosure in New Jersey?

Some states have a law that gives a foreclosed homeowner time after the foreclosure sale to redeem the property. (All states permit borrowers to redeem before a foreclosure sale.)

In New Jersey, the defaulting borrower can redeem the home after a foreclosure sale under the following circumstances.

Right to Redeem During the 10-day Period Following the Sale

The homeowner gets a 10-day period after the sale to file a motion objecting to the sale. (New Jersey Court Rule 4:65-5). After ten days, assuming no objection is filed, the court confirms the sale to finalize it. The New Jersey Supreme Court has determined that foreclosed homeowners get the right to redeem within the ten days after the sale and up until the court issues an order confirming the sale if objections are filed under the rule. (See Hardyston Nat. Bank v. Tartamella, 56 N.J. 508 (1970)).

What Is the Redemption Period If the Lender Gets a Deficiency Judgment?

Also, the foreclosed borrower gets a separate right to redeem if the lender gets a deficiency judgment. To redeem, you’ll have to file an action for redemption within six months of the entry of a deficiency judgment. (N.J. Stat. § 2A:50-4 (2025).)

But if you file an answer to the deficiency judgment lawsuit to dispute the amount of the deficiency (see below), you lose this right to redeem. (N.J. Stat. § 2A:50-5 (2025).)

Deficiency Judgment Following a Foreclosure Sale in New Jersey

Sometimes, a foreclosure sale doesn’t bring in enough money to pay off the full amount owed on the loan. The difference between the sale price and the total debt is called a "deficiency balance." Many states, including New Jersey, allow the lender to get a personal judgment, called a "deficiency judgment," for this amount against the borrower.

Statute of Limitations for a Deficiency Judgment

Under New Jersey law, the bank has to file a separate lawsuit within three months after the foreclosure sale or, if confirmation of the sale is required, from the date of the confirmation of the sale, to get a deficiency judgment. (N.J. Stat. §§ 2A:50-2, 2A:50-2.1 (2025).)

Defense to a Deficiency Judgment: The Property's Fair Market Value

You may contest the amount of deficiency owed by answering the deficiency suit and introducing evidence regarding the property’s fair market value. The court will then determine the deficiency amount by subtracting the home’s fair market value from the outstanding debt. (N.J. Stat. § 2A:50-3 (2025).)

But if you challenge the deficiency amount, you'll lose your right to redeem, as mentioned above. (N.J. Stat. § 2A:50-5 (2025).)

Getting Help from a New Jersey Foreclosure Lawyer

Foreclosure laws are complicated. Servicers and lenders sometimes make errors or forget steps. If you think your servicer or lender failed to complete a required step, made a mistake, or violated state or federal foreclosure laws, you might have a defense that could force a restart to the foreclosure, or you might have leverage to work out an alternative.

Consider talking to a local foreclosure attorney or legal aid office to learn about your rights. A lawyer can also tell you about different ways to avoid foreclosure.

Likewise, a HUD-approved housing counselor can provide helpful information (at no cost) about various alternatives to foreclosure.