Here in New Jersey, foreclosure proceedings can take nearly three years to complete on average. This means that homeowners may be kept in limbo for several years — from the day the lender’s notice of intention is filed through the completion of the sheriff’s sale. Legislators have decided to attempt to stop foreclosure actions from taking so long to complete.
The bill is not meant to replace the New Jersey Fair Foreclosure Act but to supplement it instead. If the proposed legislation becomes law, it will reduce the normal foreclosure process to approximately five months. In addition, if the homeowner does not contest the foreclosure, the home may go directly to auction.
It is hoped that a shorter foreclosure process will reduce the amount of homes left vacant for a significant amount of time. In areas with a high concentration of homes in various stages of foreclosure, the housing market is depressed, which is having an adverse effect on local economies. It is also believed that these conditions result in an increase in crime and a decrease in property values.
What was not discussed, however, is how this new law would affect homeowners who are unable to stop foreclosure proceedings and are facing the loss of their homes. Filing for bankruptcy could help distressed homeowners by giving them the time and space to decide whether the home is worth saving. Some people merely need the Bankruptcy Court’s help to reorganize their financial lives in order to maintain mortgage payments and keep their homes. Others, however, are to the point where it is in their financial interest to let the home go. In either case, other debts can also be dealt with at the same time, allowing the filer the opportunity to get a fresh start financially.
Source: dsnews.com, “Legislation in New Jersey, Ohio Aimed at Expediting Lengthy Foreclosure Process“, May 11, 2015