What Can Be Expected in a New Jersey House Foreclosure Mediation?

If you own a home in New Jersey and are facing foreclosure, you can use the New Jersey Superior Court's Foreclosure Mediation Program to find a solution and stop the foreclosure. The purpose of the program is to encourage your lender to identify alternatives to foreclosure and provide you with an opportunity to work with professionals knowledgeable about modifying home loans in a way that may work for you. When you choose to participate in the program, you can expect to disclose your financial information and attend a mediation session at the courthouse with your lender and court-appointed mediator.

Foreclosure Basics

New Jersey is a judicial foreclosure state. This means that a lender wanting to foreclosure on a mortgage must file a lawsuit in the New Jersey Superior Court. As with any lawsuit, you must be served with a copy of the summons and complaint. Under New Jersey law, you have 35 days after being served to file an answer with the court contesting the foreclosure. Under normal circumstances, a foreclosure lawsuit in New Jersey takes four to six months to complete, after which the lender obtains a judgment of foreclosure. About a month later, a foreclosure sale is conducted by the sheriff.

Requesting Foreclosure Mediation

When you're served the summons and complaint starting the foreclosure lawsuit, you should also be served with a notice informing you of the court's mediation program. The program is voluntary, and you must submit a written request to the court to enroll in the program within 60 days after being served. The court provides a form for the request that must be used. Along with the request form, you must also complete and file a financial worksheet provided by the court. The worksheet requires you to disclose your assets, income and monthly expenses with supporting documentation attached to the worksheet, such as pay stubs and bank statements. The court will forward copies of these forms and documents to the attorney representing your lender in the foreclosure lawsuit.

Foreclosure Mediation Session

Approximately 45 days after receiving your request for mediation and financial worksheet, the court will notify you of the date for your mediation session. You must attend the session along with the mediator and the lender's attorney. A representative for your lender who has authority to resolve the case may also be present, but must at least be available by phone. The mediator organizes and controls the session, such as deciding when to meet separately with each side to discuss how the case can be resolved other than by foreclosure. If the mediator is successful in facilitating an agreement between you and your lender, a document will be prepared setting forth the agreement to be signed by all parties and the mediator.

Mediation Results

The mediator cannot force any party to settle or limit the discussions to a particular type of settlement. In foreclosure cases generally, settlements are based on various scenarios such as keeping you in the home with a modification of your loan or a repayment plan for the delinquent mortgage payments. You may also decide to relinquish the property through a short sale or deed-in-lieu of foreclosure that also extinguishes your payment obligations to your lender. However, if the mediation does not result in a resolution of the case, you can expect the lender to proceed with the foreclosure lawsuit and eventual sheriff's sale.