With a 46% increase in residential foreclosure filings over the last 12 months, as well as an increase in the mortgage default rate, the New Jersey Court system unveiled a new mandatory mediation program in all foreclosure matters.
The Chief Justice of the New Jersey Supreme Court, Stuart Rabner, announced the roll-out of a statewide Judiciary program to assist homeowners in foreclosure actions. The program will provide mediators to help homeowners and lenders negotiate with one another and try to work out agreements to avoid foreclosures. According to the court, this program does not apply to foreclosure actions instituted by condominium and homeowner associations for non-payment of HOA fees, monthly maintenance fees, special assessments, and other condo fees. The program is specifically for owner-occupied residential default mortgage foreclosures.
Under the program, the courts will require mediation in all cases in which homeowners contest owner-occupied foreclosure actions. Volunteer mediators will meet with eligible homeowners and their lenders in an effort to resolve the foreclosure action and renegotiate the terms of mortgage agreements.
In uncontested actions, where the homeowner with a mortgage default has failed to respond to a foreclosure complaint, the courts will notify the homeowner of the mediation program and encourage participation. If the homeowner fails to respond and a default judgment is entered, mediation will remain an option before the matter proceeds to a sheriff’s sale.
The program began in the Middlesex County vicinage and over the next few months will be expanded throughout the state. In the next 30 days, the program is to be expanded to Essex, Union, Ocean, Camden, Bergen, and Hudson counties, which had the highest number of recent foreclosure filings. Within 60 days, the project will be in place in all 21 counties.