A New Jersey homeowner defaults on her mortgage and the lender begins foreclosure proceedings. The homeowner's attorney argues that the lender must obtain a court judgment before the property can be sold. Which of the following best explains why this argument is legally correct in New Jersey?
Correct Answer
B) New Jersey is a judicial foreclosure state, so all foreclosures must proceed through the courts and result in a court-ordered sheriff's sale
New Jersey is a strictly judicial foreclosure state. Regardless of the mortgage amount, the lien position, or whether the borrower contests the foreclosure, the lender must file a complaint in the Superior Court, obtain a judgment of foreclosure, and proceed to a court-ordered sheriff's sale. There is no non-judicial foreclosure option in New Jersey.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Foreclosure is the legal process by which a lender takes possession of a property when a borrower fails to make mortgage payments. It allows the lender to sell the property to recover the outstanding debt.
The loan-to-value ratio (LTV) is the percentage of a property's appraised value or purchase price (whichever is lower) that is being financed through a mortgage. LTV = Loan Amount / Property Value.
A comparison of the major mortgage loan types—conventional, FHA, VA, and USDA—covering their eligibility requirements, down payment amounts, mortgage insurance rules, and best use cases.
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