How Long Are Foreclosures Taking in NJ in 2022?

The average foreclosure in New Jersey completed this year took a total of 1,984 days according to ATTOM Data Solutions Midyear 2022 U.S. Foreclosure Market Report.  That means the average foreclosure that concluded in a sale in Q2 of 2022 had been going on for a full 65 months or 5 years and 5 months.  Home foreclosure is a long process in New Jersey.  But, these timeframes are not typical. A more reasonable estimate for how long foreclosures are taking in New Jersey in 2022 is about 3 years, with uncontested cases moving as quickly as 12-18 months.

Recently Concluded Foreclosures Have Been Delayed Due to the Moratorium

The above statistic can be a bit misleading since many of the foreclosure cases concluding in 2022 were artificially stalled due to the Covid-19 Residential Mortgage Foreclosure Moratorium that expired on November 15, 2021.  It has recently been reported that NOLO pegged the average foreclosure case in New Jersey as taking a total of 1,161 days (38 months) from the first foreclosure notice.  By comparison, a 2016 report by ATTOM Data Solutions found that foreclosure cases were taking a total of 1,262 days or 3 ½ years at the time.

These estimates are closer to reality for the timeframes that can be expected for those beginning the foreclosure process today.

The Fastest Possible Foreclosure Timeline is About 12 Months

If you look at the process from beginning to end, assuming the fastest possible timeline, it looks something like this: You miss a payment, the bank has to wait 120 days to initiate foreclosure proceedings.  They must send you a Notice of Intent to Foreclose providing 30 days to cure the arrears.  Then they must file and serve the Complaint and provide you 35 days to Answer.  If you fail to Answer they must move for Default and have the case returned to the Office of Foreclosure.  Then, they must wait 14 days to Move for Entry of Final Judgment.  It takes at least 30 days for Final Judgment to be entered.  It takes another 30 days for a writ to be issued and filed and another 30 days for the Sheriff to schedule a foreclosure sale.  The homeowner has 60 days of statutory adjournments as of right.  Thus, the fastest a non-contested case can move to sale is about 349 days from a missed payment, but realistically, you can add 4 months to that and safely assume 469 days.

What is the Fastest Possible Timeline if a Contesting Answer is Filed?

A Contesting Answer will buy an additional 6-18 months.  If the Contesting Answer w/ Counterclaim is filed there are 35 days the bank has to Answer the Counterclaim, about 30 days later a Case Management Conference will be held, then about 90 days is added for discovery, and about 60 days is added for a Summary Judgment Motion.  You can add an additional 45 days by responding to the Cure Notice, and you can assume an additional 90 days will be added by contesting Final Judgment with the Office of Foreclosure.  These extensions add up to another 350 days or almost an additional year on average.

In addition to all this time, under 12 CFR 1024.41 the bank cannot initiate foreclosure or move to final judgment or schedule a sheriff sale if a loss mitigation application is under review or on appeal during any of these milestones in the foreclosure process.  Thus, an additional 60-90 days can be gained at 3 distinct points along the foreclosure timeline for a total of an additional 6 months or 180 days.

Adding up these timeframes sums out to 999 days, almost 3 full years.  Thus, by simply filing a Contesting Answer and defending the case properly with an attorney, a homeowner can safely assume that they will extend the timeline by around 500 days (16 months) or close to 1 ½ years.  Shockingly, only 6% of homeowners facing foreclosure fight back and utilize all of the time afforded to them to save their home.

Why Is It So Important to Answer the Foreclosure Complaint?

 

• 94% of Homeowners Never File an Answer to the Foreclosure Complaint

Ninety-four (94%) percent of New Jersey foreclosures in a typical year are not contested.[i]  This statistic was cited in a 2014 article by Seton Hall Professor Linda E. Fisher.  Linda E. Fisher, Shadowed by the Shadow Inventory: A Newark, New Jersey, Case Study of Stalled Foreclosures and Their Consequences, 4 U.C. Irvine L. Rev. 1265 (2014) (available at: https://scholarship.law.uci.edu/ucilr/vol4/iss4/7).

This means that the vast majority of all delinquent homeowners facing foreclosure are giving up about 18 months in which to modify their mortgage loans, re-finance out of their current loan, offer the bank a short payoff, leave gracefully on their own timeline by conducting a short sale, or avoiding a Sheriff Sale by working out a cash-for-keys or deed-in-lieu walkaway on advantageous terms.

• Filing an Answer Provides Time for a Loan Modification and Helps Stop Foreclosure

Paramount considerations when facing the stress and anxiety of a looming foreclosure and eviction are peace of mind and control over the process.  Thus, it is important to pursue all of your options for you and for your family, and to maintain control of your destiny by fully participating and fighting the bank’s efforts to sell your house out from under you in a Sheriff Sale.

[i] Interview with Kevin M. Wolfe, Assistant Dir. of the Civil Practice Div., N.J. Admin. Office of the Courts, Trenton, N.J. ( July, 2010); see also 13B JOHN A. CELENTANO, JR. ET AL., NEW JERSEY PRACTICE SERIES, REAL ESTATE LAW AND PRACTICE §§ 41, 41.1 (2d ed. 2002).