If your house in New Jersey has been foreclosed on, you may reclaim it by redeeming (repurchasing).
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Question
I bought a home in Princeton, New Jersey, few years ago. I lost my work last year and have struggled to make my home payments since then. I fell behind on my payments, and the bank began foreclosure proceedings. I just obtained employment, however it is not as well paid as my previous one. I do not want to lose my home. Can I purchase it back from the bank after the foreclosure if I can find the money?
Answer
Yes, New Jersey law allows you to buy or “redeem” your house after it has been foreclosed. Following the foreclosure sale, you will have at least one, if not two, chances to reclaim your home.
When Can You Redeem Your New Jersey Foreclosed Home?
In New Jersey, foreclosures are “judicial,” which means the bank files a case in court to foreclose. The New Jersey Court Rules offer a 10-day deadline after the foreclosure sale for the homeowner to submit a motion opposing to the sale. 4:65-5 (New Jersey Court Rule). After the 10-day period, the court must confirm the transaction in order for it to be finalized.
According to the New Jersey Supreme Court, foreclosed homeowners have the right to redeem:
If objections are brought under the rule, they must be filed within 10 days after the sale and up until the court makes an order confirming the sale (See Hardyston Nat. Bank v. Tartamella, 56 N.J. 508 (1970)).
Redeeming Following a Deficiency Judgment
In addition, homeowners in New Jersey have the opportunity to redeem if the bank receives a deficiency judgment after the foreclosure.
If the bank receives a deficiency judgment and you wish to redeem, you must file a redemption action within six months of the judgment being entered. 2A:50-4 of the New Jersey Statutes. You lose your right to redeem if you submit a response to the deficiency judgment litigation disputing the size of the deficiency. 2A:50-5 (N.J. Stat. Ann.).
How Much Will You Have to Pay to Redeem Your House?
To redeem, you must pay the entire amount of the judgment, plus interest, charges, and other reasonable expenditures paid by the purchaser after the sale for taxes, assessments, other previous liens, and required repairs. 2A:50-4 of the New Jersey Statutes.
You may subtract any income the buyer got from the property, such as rent, from this sum.
Other Ways to Reclaim Your Home Before the Sale
Instead of relying on redemption, you might make up on past-due payments before the sale to restart the loan. According to New Jersey law, you may reinstate by curing the default at any time up to the entry of a final judgment, and the judgment can be postponed to provide you more time to reinstate. If you wish to retain your home, you might look into different options to foreclosure. You may be able to negotiate a mortgage modification, forbearance agreement, or repayment plan, for example.
You might also redeem the house prior to the sale by paying down the whole mortgage obligation. The “equitable right of redemption” occurs when you redeem prior to the sale.
Discovering New Jersey’s Redemption Statute
Go to Title 2A of the New Jersey Statutes to find the legislation that covers your ability to redeem your house following a foreclosure sale in New Jersey. Statutes change, so double-checking is usually a good idea. The way courts and other organizations interpret and implement the law might also shift. Some restrictions may even differ across states. These are just a few of the reasons why you should visit an attorney if you are facing foreclosure.