How Long Do You Have to Answer the Foreclosure Complaint?
You have 35 days to file an Answer once you are served with a Foreclosure Complaint. New Jersey Court Rule 4:6 – Defenses and Objections. Those facing foreclosure frequently ask if they can get additional time to Answer, and while this is possible in some situations – the Court strictly enforces the Answer deadline and you do not want to risk being declared in default and losing your right to defend the case over a few additional days.
What Form Should the Answer to the Foreclosure Complaint Take?
Answer
Many homeowners wrongly assume that they can write a letter to the Court or explain their situation informally to the Judge. This is not the case. The New Jersey Court Rules have specific and formal requirements for the form and content of your Answer. New Jersey Court Rule 4:5-3. Answer; Defenses; Form of Denials.
The Answer must address the numbered paragraphs of the Foreclosure Complaint and “admit” or “deny” each allegation in the same order they were presented using direct language. However, you cannot simply provide general denials by using the single word “deny,” but are required to provide a short plain statement of the basis for your denial and any necessary detail.
You may also state that you “lack information and knowledge sufficient to form a belief as to the truth” of an allegation or instruct the court that the allegation in question “calls for a legal conclusion for which no response is required. Statements by the lender about assignments are probably items you “lack information and knowledge” about and general statements in the Complaint that the bank has a right to foreclose on the collateral are the kind of things that “call for a legal conclusion.”
Sections of the Foreclosure Answer
Your Answer has several sections:
- Answer w/ Paragraph-by-Paragraph Response to Complaint;
- Affirmative Defenses;
- Counterclaims;
- Discovery Requests.
Affirmative Defenses
Your Answer should include Affirmative Defenses, which are facts that would relieve you of liability even if the Plaintiff is able to prove their case. You can think of affirmative defenses as excuses or justifications that mitigate the consequences of a claim against you. These are all the things the bank has done wrong over the years, especially those that have interfered with your ownership rights and ability to bring the loan back into good standing. The bank will pay the most attention to bank activities that enrich the bank at your expense or which involve some kind of duplicity or fraudulent conduct.
The Court Rules list a number of the more common affirmative defenses: accord and satisfaction, arbitration and award, contributory negligence, discharge in bankruptcy, duress, estoppel, failure of consideration, fraud, frustration of purpose, illegality, impossibility of performance, injury by fellow servant, laches, license, payment, release, res judicata, statute of frauds, statute of limitations, and waiver. New Jersey Court Rule 4:5-4. Affirmative Defenses; Misdesignation of Defense and Counterclaim.
In New Jersey Foreclosure Cases some of the additional Affirmative Defenses that are commonly plead are: lack of standing, not the real party in interest, violations of the Fair Foreclosure Act, violations of the loss mitigation procedures in 12 C.F.R. 1024.41, failure of condition precedent under mortgage, unclean hands, unfair lending practices under the Truth in Lending Act (“TILA”), violations of the Fair Debt Collection Practices Act (“FDCPA”), violations of the Real Estate Settlement and Procedures Act (“RESPA”),
What Are Contesting and Non-Contesting Answers?
Contesting Answer to the Foreclosure Complaint
A Contesting Answer goes to the bank’s right to foreclose. The only question in a foreclosure case is whether the bank may look to the collateral to satisfy the unpaid debt.
Thus, the plaintiff has to show the validity of the mortgage, the amount of indebtedness, and the right of the mortgagee to foreclose on the mortgaged property. Great Falls Bank v. Pardo, 263 N.J. Super. 388, 394 (Ch. Div. 1993).
A Contesting Answer will generally attack the right of the mortgagee to foreclose based on standing defects, violations of the Fair Foreclosure Act, mortgage modification abuses, and other “bad faith” conduct sometimes referred to as “wrongful foreclosure”.
As a practice point, foreclosure defense attorneys will always attack standing even though few cases are ultimately won on this basis. Since the relevant proofs regarding whether the lender or servicer had a valid authenticated assignment or possession of the original Note prior to filing are usually not known or documented in the Complaint, this is a valid defense in most cases and absolutely requires the Office of Foreclosure to deem the case contesting and put the lender to its proofs.
Stated as simply as it can be, the lender or servicer has to provide the Court with the same proofs you would need to show a bank when cashing a check written out to someone else – a check being a negotiable instrument like a mortgage note. You could do this by presenting a contract giving you control over the debt or by showing that you were a valid holder with rights to collect on the debt. In both cases, unlike in a foreclosure, you’d probably have to get verification from the party the check was originally written out to.
So, first, you could show the teller at the bank that you have a valid contract assigning you the payments from the party the check was written out to. You can bet they are going to need something in writing verifying that the specific check at issue is covered, before they are going to negotiate that check to your account.
And, second, you could show the teller that the party the check was written out to endorsed the check over to you on the back, proving your possession of the check by presenting it to the teller. In this last case, unlike in court proceedings, you’d probably need some verification before the bank would be satisfied the endorsement was legitimate, but the bank would recognize this endorsement of the check to you as a valid means of negotiation.
Standing defenses are assumed in foreclosure litigation, but unless you have been negatively impacted by the bank assignments and convoluted chain of custody, you are going to need more to get the Court’s attention. This is where you have to search your individual circumstances for bank abuses, unjust enrichment, and bad faith – and while there are a few fact patterns we see all the time, every case is unique, and it is important to get into specific dates and write like a reported – who, what, when, where, how and why – giving the specific details in chronological order that make out your claims.
Non-Contesting Answer to the Foreclosure Complaint
Many homeowners who Answer the Foreclosure Complaint without an attorney will fail to contest the bank’s standing or provide a sufficient deficiency in the bank’s presumptive right to foreclose and seek possession of the mortgaged premises – and will find their Answer being immediately stricken and sent back to the Office of Foreclosure in Trenton. This is a tough blow if your rights have been violated and you were counting on getting some assistance from the Court with your case or getting time within which to get a modification reviewed and completed.
A foreclosure action will be deemed uncontested if the responsive pleadings “have been stricken” or do not “contest the validity or priority of the mortgage or lien being foreclosed or create an issue with respect to plaintiff’s right to foreclose.” R. 4:64-1(c)(2), (3).
Federal law requires that the Servicer wait until the loan is over 120 days delinquent before initiating foreclosure proceedings. 12 C.F.R. § 1024.41. The lender is then required to send you a Notice of Intent to Foreclose (“NOI”) providing you 30 days to cure the default. You will also receive notification of your right to participate in the New Jersey Foreclosure Mediation Program by submitting your application within 60-days of the date you were served. Once the bank send you the NOI, they can file the foreclosure in as little as 30 days or as much as 180 days. N.J. Stat. Ann. § 2A:50-56.
The Fair Foreclosure Act, N.J.S.A. § 2A:50-53, et seq. governs the foreclosure process in New Jersey and provides strict guidelines the bank must follow. The Legislature made part of the body of the statute the finding and declaration that it is “public policy of this State that homeowners should be given every opportunity to pay their home mortgages” and that mortgagees benefit when defaulted loans return to performing status. N.J.S.A. § 2A:50-54. One important provisions handed down during the financial crisis is N.J.S.A. § 2A:50-1, which prohibits the bank from seeking a deficiency judgment over and above what the bank receives in a sale of the mortgaged property.
