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New Jersey Supreme Court clarifies information in notice of intent

Over the last several years, foreclosure actions have ground to a virtual halt in New Jersey because of issues with the paperwork presented by lenders as they sought to repossess homes. But now, efforts to stop foreclosure may ramp up after a decision was handed down by the state Supreme Court in a 5-0 ruling on Feb. 27.

At issue was the precise information required by lenders in their notice of intent to foreclose under the New Jersey Fair Foreclosure Act. The issue arose because it was not always easy to determine who actually owned a mortgage that had been repackaged as part of a group and resold to investors. Lenders had taken to inserting only the name of the servicing company, a practice that was challenged in the pending court case.

Indeed, the Supreme Court has ruled that the name and contact information for both the mortgage holder and the servicer must be provided in the notice of intent. But in the same decision, the court also reversed a separate appellate court ruling that had determined that a foreclosure that had an improper notice of intent should be dismissed. Rather, the new ruling dictates that the trial court can exercise discretion by ordering that a corrected notice be served, that other appropriate action be taken or by dismissing the lawsuit outright. Some estimate that the number of unprocessed foreclosure matters in New Jersey may be as high as 100,000.

Now that the court has decreed what information in a notice of intent complies with the Fair Foreclosure Act, observers expect the unprocessed matters to now make their way through the court system. As such, homeowners in financial trouble who have been hoping for a resolution to their mortgage problems will now need to step up their efforts to stop foreclosure. Some may benefit by seeking the protection of the bankruptcy court through Chapter 7 liquidation or a Chapter 13 reorganization of debt. Each option has its advantages in helping those victimized by the economic crisis to devise a strategy for achieving a fresh financial beginning.

Source:, "State Supreme Court decision could unlock foreclosure floodgates in New Jersey," Sarah Portlock, Feb. 28, 2012

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