Recent Real Estate Law Changes in New Jersey

Recent changes in real estate law have focused primarily on addressing mortgages and foreclosures, specifically a recent bundle of real estate statutes signed into law of April 2019.  The stated purpose of the new laws is to help New Jersey residents struggling against foreclosure to provide assistance at no additional financial burden to borrowers.  In addition, creditors have received certain benefits from this bundle of laws as well.  

The two most significant real estate laws enacted into law include the New Jersey Foreclosure Mediation Act and the Mortgage Servicing Licensing Act. 

The New Jersey Foreclosure Mediation Act

The New Jersey Foreclosure Mediation Act is the New Jersey’s legislature’s response to an existing mediation program created by the New Jersey Judiciary.  This program allows homeowners and borrowers to request mediation if they receive a notice of intent to foreclose.  This optional mediation program is beneficial to homeowners.

Borrowers are not required to pay a fee to participate in the mediation program. However, they will be funded by a set percentage of the filing fee complaint, paid to the courts. 

The Fair Foreclosure Act

The Fair Foreclosure Act was amended to require residential mortgage lenders to re-issue a notice of intent to foreclose if 180 days have passed since a prior notice letter was sent. This increased notice requirement makes sure residential homeowners are aware of their deficient or delinquent payments. This notice requirement also makes sure no one is surprised by the commencement of a foreclosure action. 

The Mortgage Servicing Licensing Act

The Mortgage Servicing Licensing Act requires entities attempting to act as a mortgage servicer to obtain a license from New Jersey’s Commissioner of Banking and Insurance.  By requiring a license to operate as a mortgage servicer, New Jersey will have increased oversight and will minimize unfair or unethical practices.

In addition to this licensing requirement for those operating within the state, the New Jersey Residential Mortgage Act was explicitly made applicable to out-of-state mortgage lenders, brokers, and originators requiring them to be licensed as well. 

Other changes

Perhaps one of the most significant changes to real estate law to occur is the revision of one of the statutes of limitations calculations for residential foreclosures.  The statute of limitations for the commencement of a residential mortgage is now the earliest of six years from the original default date, six years from the last payment made or 36 years from the date of recording the mortgage.  In other words, whichever comes first ends the relevant statute of limitations for commencement of a foreclosure suit.

This new applicable calculation can assist homeowners and borrowers from being nervous about the prospect of foreclosure, bringing a sense of finality to the entire process.  Finally, certain procedures for sales and foreclosures were made more specific. Not only is the sale process for vacant and abandoned properties accelerated, but a sheriff must also conduct foreclosures sales within 150 days of the issuance of a writ of execution. 

Though many of the changes to real estate law in New Jersey seem overly technical and procedural-based, they protect relevant parties involved in the mortgage and foreclosure process.  In response to the foreclosure crisis still affecting many parts of New Jersey, legislators have responded by attempting to make the process more transparent and efficient. This attempt can help to bring a sense of finality for those involved and affected.  

Call (732) 449-0449 to schedule a consultation with Anthony J. Cafaro, P.C. in our Sea Girt office.

NOTE: This blog is for informational purposes only and does not constitute legal advice.

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