New Jersey Passes New Foreclosure Mediation Bill along with Eight other Foreclosure Bills
New Jersey Bill A664 specifically addressing mediation through the foreclosure process was passed on April 29, 2019. The act “shall take effect immediately on the first day of the seventh month next following enactment.”
Currently, lenders are required to provide a foreclosure medication package upon the service of the foreclosure complaint. This act requires the service of mediation documents to be served twice when the notice of intent to foreclose is served and at the service of the complaint. It must be available in both English and Spanish.
What does Mediation mean to an NJ Homeowner
A major overhaul of the program in benefit to borrowers is the requirement of “good faith” participation from the lender and borrower. This is similar to the laws of New York (CPLR 3408), requiring “good faith” participation in foreclosure settlement conferences. With the addition of this requirement, borrowers can hold lenders liable for civil penalties up to $1000 or allow them to recover reasonable attorney fees.
The bill further adds an additional requirement to the notice of intent to foreclosure originally set out under N.J.S.A. 2A:50-56(c). The additional requirement makes it mandatory for the lender to notify the borrower that the debtor has the option to participate in the foreclosure mediation program. If you do not want to face the mediation process by yourself reach out to a Foreclosure Defense Mediation Attorney.
Is Mediation Right for You?
The mediation program can be a double-edged sword for borrowers if not approached properly. For instance, individuals who do not qualify for a loan modification because of a loss of income may be better suited to delay the negotiation process with the lender until a change of circumstances can be shown proving additional revenue to the household.
On the other hand, mediation can be useful if the borrower has sufficient income to modify their loan. Now that the courts have the authority to hold the lender liable for not participating in good faith through the process, borrowers have an extra tool in their toolbox to hold lenders liable for damages. On many occasions, lenders will state that they didn’t receive paperwork, or a request for mortgage assistance package was not submitted. With fax confirmations proving the same, borrowers will have more leverage to get banks to work with them.
However, this is not a guarantee that banks will extend a loan modification. A full consultation with the options of bankruptcy and foreclosure defense should be taken by any borrower in foreclosure to understands how the new and current laws impact their rights in New Jersey.
The Law Offices of Patel, Soltis & Cardenas LLC offer services in foreclosure, bankruptcy, real estate, the statute of limitation defense, and estate work. We have offices in Hackensack, Freehold, Jersey City, Brooklyn, and Manhattan. This breakdown means to serve as an interpretation of the new laws approved by Governor Murphy on April 29, 2019. You should not rely on this interpretation without seeking legal advice from competent counsel. Call us at 973-200-1111 or email us at [email protected].