New Jersey Revises RMLA and Various Foreclosure Acts

On April 29, 2019, the New Jersey governor signed a number of bills amending the New Jersey mortgage foreclosure process.  The amendments affect foreclosure-related and certain other provisions under the New Jersey Residential Mortgage Lending Act (RMLA), the New Jersey Foreclosure Mediation Act (FMA), the Mortgage Stabilization and Relief Act (MSRA), the Fair Foreclosure Act (FFA), and the New Jersey Foreclosure Fairness Act (NJFFA).

Specifically, the new legislation includes the following:

• Senate Bill 3416 which adds a requirement to include, in the notice of intent to foreclose, information advising the debtor that the lender is licensed in accordance with the RMLA.  The bill also clarifies that the RMLA will now also apply to “residential mortgage lenders, residential mortgage brokers, mortgage loan originators, and other persons that are located out-of-State, provided they are otherwise required to be licensed pursuant to the provisions of the act in the State.”  The bill takes effect immediately.
  
  
• Senate Bill 664 which revises the FMA to codify the Judiciary’s Foreclosure Mediation Program and raises the foreclosure filing fee to $155, of which $60 will be deposited into the Foreclosure Mediation Fund and $95 will be used to reimburse trained foreclosure prevention and default mitigation counselors for their services.  The effective date of the bill is November 1, 2019.
  
  
• Assembly Bill 4999 which revises the MSRA to require a creditor serving a summons and complaint in an action to foreclose to notify the mayor or other chief executive officer, along with the municipal clerk, that the action to foreclose has been filed and include in the notice the full name, address, and telephone number for any creditor or representative of the creditor who is responsible for receiving complaints of property maintenance and code violations.  The bill also requires the notice to include the full name and contact information for any person or entity retained by the creditor or representative of the creditor to be responsible for any care, maintenance, security or upkeep of the property.  If the creditor is located out-of-state, the creditor must appoint an in-state representative or agent who will be responsible for the care, maintenance, security, and upkeep of the property if it becomes vacant and abandoned.  The effective date of the bill is July 28, 2019 and it applies to residential mortgage foreclosure actions commenced on or after that date.

• Assembly Bill 5001 which revises the FFA to decrease the statute of limitations for residential mortgage foreclosures, in situations in which the date of default is used as a method to determine when the statute of limitations expired, from 20 years to six years from the date on which the debtor defaulted.  The bill is effective immediately and applies to residential mortgages executed on or after April 29, 2019.
  
  
• Senate Bill 3411 which revises the FFA to require a receivership appointment prior to foreclosure on a two to five unit dwelling where one unit is occupied by the debtor or a member of the debtor’s immediate family as the debtor’s or member’s residence at the time the loan is originated, and is not properly maintained and meets the necessary conditions for receivership eligibility under the Multifamily Housing Preservation and Receivership Act.  The bill also revises the FFA to: (1) require a residential mortgage lender to give the residential mortgage debtor notice, not more than 180 days in advance, of an intent to foreclose which includes a notice of the right to cure the default; (2) entitle a debtor to housing counseling, at no cost to the debtor, through the Judiciary’s Foreclosure Mediation Program; and (3) exempt a reinstatement of a foreclosure action which is granted following a dismissal without prejudice that resulted from the plaintiff’s compliance with federal law or regulation from counting toward the limit of three reinstatements. The effective date of the bill is August 1, 2019.
  
  
• Senate Bill 3464 which revises the FFA to allow the Office of Foreclosure within the Administrative Office of the Courts to issue an order that increases the Special Master’s ability to hold a foreclosure sale from one property to multiple properties within the same vicinage.  The bill also requires the plaintiff’s attorney to prepare the deed that is used by the sheriff’s office.  Additionally, the bill increases the amount of sheriff sale adjournments to five; two at the request of the lender, two at the request of the debtor, and one if both the lender and debtor agree to an adjournment. The effective date of the bill is July 28, 2019.
  
  
• Senate Bill 3413 which revises the NJFFA to allow a court to use, as one of the indicating conditions that a property is vacant and abandoned, statements from representatives of a common interest community association. The bill also revises the NJFFA to allow a sheriff to sell a foreclosed property within 90 days of the sheriff’s receipt of any writ of execution issued by the court if the court makes a finding in the foreclosure judgement that the property is vacant and abandoned or the court issues an order directing the sheriff to sell the property within 90 days.  Moreover, following an issuance of a foreclosure judgement where the court did not find that the subject property was vacant or abandoned, the foreclosing plaintiff may make an application to the court that the property be sold by the sheriff within 90 days of the application if the plaintiff certifies that the mortgaged real estate is in fact vacant and abandoned. The effective date of the bill is May 29, 2019.