The Free House Defense in Foreclosure is Coming to New Jersey

May 2, 2019 | Bankruptcy, New Jersey Bankruptcy, New Jersey Foreclosure Defense

The Free House Defense is Coming to New Jersey

New Jersey Bill A5001 specifically addressing the statute of limitations and was passed on April 29, 2019. The act “shall take effect immediately and apply to residential mortgages executed on or after the effective date.”

This law drastically changes the statute of limitations in the State of New Jersey for foreclosure proceedings on residential mortgages. Prior to the passage of the law, banks could foreclose on a borrower from the earliest of:

  1. Six years from the date fixed for making of the last payment or maturity date set forth in the mortgage or the note, bond or other obligation secured by the mortgage;
  2. 36 years from the date of recording of the mortgage or, if the mortgage is not recorded, 36 years from the date of execution, so long as the mortgage itself does not provide for a period of repayment in excess of 30 years; or
  3. 20 years from the date on which the mortgagor defaulted on any of the obligations or covenants contained in the mortgage or in the note, bond or other obligation secured by the mortgage.

The law amends part 3 from above to replace 20 years to 6 years. This means that borrowers who default on their loan and do not cure, cannot be foreclosed on by the initiation of a foreclosure action after 6 years from that default. If the borrower makes a payment on the account then the 6-year timeline is restarted. This closely matches New Jersey’s neighbor New York who also sets a 6-year time bar on foreclosures from default pursuant to CPLR §213(4).

What does the Statute of Limitations mean to a New Jersey Homeowner?

If your foreclosure drags on for 6-years it is possible to get a free home if the case is dismissed and then the bank tries to restart the case.  However, this scenario is unlikely to happen.  Currently, the foreclosure timeline in New Jersey is 114 days. If you are in Bankruptcy, then the time stops, so the time that you are in bankruptcy doesn’t count towards the 6 years.

Other recent foreclosure laws in New Jersey related to mediation and registration of loan servicers.

The Law Offices of Patel, Soltis & Cardenas LLC offer services in foreclosure, bankruptcy, real estate, stopping sheriff sales, 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


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