The New Jersey State Foreclosure Mediation Program has become a helpful tool for many homeowners facing foreclosure.   It has allowed homeowners the benefit of skilled attorneys and housing counselors to help them navigate the maze of rules and regulations which meant the difference between securing a modification on a mortgage in default and losing their home.   Both legal counsel and the housing counselors were available free of charge as they were paid through State programs.  The money for these programs has run out.  Homeowners in need of these services will have to retain private counsel and housing counselors for services previously provided at no cost.   This will prove to be a large burden for homeowners who are unable to make payments on their mortgages.

Mediators, who were also paid under the New Jersey State Foreclosure Mediation Program, with a few exceptions, will no longer be paid.  

In addition, unlike previous liberal guidelines where homeowners could get into the mediation program until there was a Sheriff’s sale, commencing April 1, 2013, residential homeowners that are being foreclosed upon will only be eligible to participate in the foreclosure mediation program if they request mediation within 60 days of service of the complaint.  For existing cases already older than 60 days from the service of the complaint the homeowner must have requested mediation before April 1, 2013. 

As of March 1, 2013, due to loss of funding, housing counselors are no longer accepting new clients exclusively for mediation.  However, there are still some agencies that are continuing to offer services to homeowners under other programs.  What was already a confusing process for many to navigate, will become even more confusing.

One program known as the "Homekeeper Program" allows homeowners who may qualify to apply directly and have a housing counselor assigned to them.  The application for the HomeKeeper Program is available here 

With the rules continuing to change, those that are in threat of foreclosure must act quickly and diligently if they want to receive the benefit of the State Court sponsored mediation program.

Lewis J. Pepperman is Co-Managing Director of Stark & Stark and the Chair of the Litigation Group in Stark & Stark’s Lawrenceville, New Jersey office. For questions, or additional information, please contact Mr. Pepperman.