New Jersey’s Fair Foreclosure Act [“the FFA”] gives homeowners various protections and rights in the event of foreclosure. These include the right to a 30 day “Notice of Intent to Foreclose” so that they can bring the loan current before a foreclosure is started. Also included is the right to notice and a further opportunity to cure the arrears before the lender applies for a judgment by default. The FFA’s procedures provide not only multiple opportunities to avoid foreclosure, but substantially lengthen the time from the start of the process to foreclosure sale. The FFA applies, by its terms only to “residential mortgages” which are defined as those where the property is a house, real property or condominium located in New Jersey, which is occupied, or is to be occupied, the an individual borrower or or a member of the [his/her] immediate family, as that person’s residence. The property can contain up to 4 dwelling units as long as the borrower or a family member lives in one of them. The final requirement is that the property “is or is planned to be, occupied by the [borrower] or a member of the [borrower’s] immediate family as [that person’s] residence at the time the loan is originated.
In a recently reported case in Cape May County, (Sturdy Savings Bank v Roberts) Judge William Todd held that these protections are lost when the borrower or family members move out before a foreclosure is started with no intention to return. This is admittedly contrary to a strict reading of the statute, but Judge Todd looked instead to the purpose of the law, to protect those who currently occupy a mortgaged residence. Since the Roberts’ had moved out long before the foreclosure, he held they were not entitled to the protections intended to help those in residency.
Certain other requirements contained in the court rules, intended to counter abuses such as “robo-signing”, still apply, Judge Todd ruled
For a variety of reasons, we have long encouraged those facing foreclosure not to move out sooner than they have to, unless there is good cause to do so. This decision simply underscores and confirms that advice. Proper advice and planning, from a qualified attorney, is always wise and worthwhile.