New Jersey Foreclosure Law & Practice

Standing Order with Automatic Update Service

Scott T. Tross, Esq.

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Since this book was originally published in 2001, New Jersey has experienced record numbers of foreclosures. The large volume of foreclosures has, in turn, led to significant revisions of the Court Rules applicable to foreclosures, as well as legislative reform. In addition, the courts have rendered countless decisions refining and, in some cases, changing existing law.

Recent developments include new pleading requirements, electronic filing, additional defenses, mediation, extended redemption, non-recourse, carve-out provisions, changes in municipal tax lien procedure, and revisions to the Bankruptcy Code. 

"Tross' book is a valuable research tool.  It is well organized, so that it is easy to find the topic you seek." - Lawrence J. Fineberg, NJ Regional Counsel, Chicago Title Insurance Co., Author of NJ Title Practice

"Excellent resource. I use it regularly." - Eric Salant, Esq., Holmdel

"Well written and comprehensive; a must read for any real estate practitioner." - Christopher J. LaMonica, Brick Township

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  • Availability: Available
  • Brand: New Jersey Law Journal
  • Product Type: Books
  • Edition: 2019
  • Page Count: 658
  • ISBN: 978-1-62881-559-7
  • Pub#/SKU#: JFORE19
  • Pub Date: 12/28/2018
  • Volume(s): 1
  • Frequency: Annually
  • CDs: 1

Author Image
  • Scott T. Tross, Esq.

Scott T. Tross, a partner in the Newark office of Herrick, Feinstein LLP, represents money center and regional banks, insurance companies, investment banks, mortgage companies, servicers of securitized portfolios and investors in distressed debt.  He represented the lender in MetLife Capital Financial Corp. v. Washington Avenue Associates, L.P., 159 N.J. 484 (1999), which reversed the Appellate Division by enforcing default rate interest and late charges.  He is a graduate of Yale University, summa cum laude, Phil Beta Kappa, and Harvard Law School.

Chapter 1: Introduction
1-1 Historical Background
1-2 Mortgage Documents
1-3 Execution and Delivery of the Documents
1-4 Priority of Mortgages
1-5 Rights and Duties Prior to Default
1-6 Rights and Duties Subsequent to Default
1-7 Non-Judicial Sales
1-8 Judicial Foreclosure

Chapter 2: The Fair Foreclosure Act
2-1 Introduction
2-2 Applicability of the Act
2-3 Notice of Intention to Accelerate and Foreclose
2-4 Requirements and Procedures for Notice
2-5 The Right to Cure
2-6 How Cure is Effected
2-7 Consequences of the Right to Cure
2-8 Application for Final Judgment
2-9 The Optional Foreclosure Procedure
2-10 Selecting the Optional Foreclosure Procedure
2-10:1 Abandonment of the Mortgaged Property
2-10:2 Deed in Lieu of Foreclosure
2-10:3 No Equity in the Mortgaged Property
2-11 Uniform Procedures for Public Sales
2-12 Tacit Waivers Via Partial Payment
2-13 Procedures for Service on Judgment Creditors and Appearances by Attorneys General

Chapter 3: The Fair Debt Collection Practices Act
3-1 Introduction
3-2 What Constitutes a “Debt”
3-3 What Constitutes a “Consumer”
3-4 What Constitutes a “Debt Collector”
3-4:1 Creditors Generally Not “Debt Collectors”
3-4:2 Other Persons Not “Debt Collectors”
3-4:3 Attorneys as “Debt Collectors”
3-5 Restrictions on Acquiring Location Information
3-6 Restrictions on Communications
3-7 Initial Contact and Beyond: Disclosure Requirements
3-8 The Validation Notice
3-9 Verification of the Debt
3-10 Harassment and Abuse
3-11 False, Deceptive or Misleading Means
3-12 Unfair Practices
3-13 Deceptive Forms
3-14 Multiple Debts
3-15 Liability
3-16 Statutory Defenses
3-16:1 One-Year Limitations Period
3-16:2 Lack of Intent
3-16:3 Reliance on FTC Advisory Opinions
3-17 Venue for Actions by Debt Collectors

Chapter 4: Default and Acceleration
4-1 Defaults In General
4-1:1 Right to Foreclose
4-1:2 Right to Possession; Assignment of Rents
4-1:3 Notice of Default—General
4-1:4 Demand—General
4-1:5 Premature Foreclosure
4-2 Types of Defaults
4-2:1 Payment Default
4-2:2 Other Common Defaults
4-2:3 Instances of No Default
4-2:4 Defaults Affecting Collateral Value
4-2:5 Defaults Caused by Mortgagee’s Conduct
4-3 Notice of Default
4-3:1 Notice Generally Not Necessary
4-3:2 Presentment and Demand
4-3:3 Manner in Which Notice or Demand Is Given
4-4 The Right to Cure
4-4:1 Grace Periods
4-4:2 The Opportunity to Cure Payment Defaults
4-4:3 The Opportunity to Cure a Default in Taxes or Insurance
4- 5 Acceleration in General
4-5:1 “Credit on Condition” Clause, Not a Forfeiture Clause
4-5:2 Acceleration Is a Right, Not an Obligation
4-5:3 Acceleration Permitted
4-5:4 Acceleration Not Permitted
4-5:5 Impact of an Acceleration Clause on the Holder of the Mortgage Note
4-6 Waiver of Default
4-6:1 The Role of Consideration
4-6:2 Acceptance of Payment
4-7 Estoppel
4-7:1 Mortgagee’s Conduct
4-8 Other Circumstances Excusing Default
4-8:1 Mistake
4-8:2 Mailing, Futility and Extension
4-8:3 Real Estate Taxes and Insurance Premiums
4-9 Circumstances Not Excusing Default

Chapter 5: Parties in a Foreclosure Action
5-1 Parties Plaintiff
5-1:1 Introduction
5-1:2 Mortgagees and Authorized Representatives
5-1:3 Co-Mortgagees
5-1:4 Assignee of Mortgage
5-1:5 Trustees
5-1:6 Partnerships
5-2 Parties Defendant
5-2:1 Introduction
5-2:2 Mortgagor
5-2:3 Record Owner
5-2:4 Spouses
5-2:5 Heirs
5-2:6 Junior Encumbrancers
5-2:7 Trustees
5-2:8 Receivers
5-2:9 Trustee in Bankruptcy
5-2:10 Tenants
5-2:11 Prior Encumbrancers
5-2:12 State of New Jersey
5-2:13 United States
5-2:14 Persons Sought to Be Held Liable for Deficiency
5-2:15 Persons Who Refuse to Join as Plaintiffs
5-2:16 Armed Forces Personnel
5-2:17 Minors and Mentally Incapacitated Persons

Chapter 6: The Foreclosure Complaint
6-1 Drafting the Foreclosure Complaint
6-1:1 Jurisdiction and Venue
6-1:2 Parties; Foreclosure Search
6-1:3 Pleading Requirements Generally
6-1:4 Pleading Requirements for Married Persons
6-1:5 Notice of Default; Acceleration; Assignment
6-1:6 No Need to Plead: Consideration, Precise Interests
6-1:7 Multiple Counts
6-1:8 Non-Germane Claims
6-1:9 Joinder of Several Mortgages in One Complaint
6-2 Filing of the Foreclosure Complaint; Certificate of Regularity
6-3 Amendment of the Foreclosure Complaint
6-3:1 Amendment in General
6-3:2 The Need to Amend: Common Instances
6-3:3 Disallowance of Amendments
6-4 Supplementation of the Foreclosure Complaint
6-4:1 Supplementation in General
6-4:2 Supplemental Complaints: Instances When Permitted
6-5 Issuance of the Summonses
6-6 By Whom Served
6-7 Service Within the State
6-7:1 Personal Service
6-7:2 Substituted Service
6-7:3 Service by Publication
6-7:4 Corporations; the United States
6-7:5 Optional Mailed Service
6-8 Service Without the State
6-8:1 Diligent Inquiry
6-8:2 Absent Defendants: Strict Adherence
6-9 General Appearance; Acknowledgment of Service
6-10 Return of Service

Chapter 7: The Notice of Pendency
7-1 Written Notice of Pendency
7-1:1 The Common Law and the Statutory Change
7-1:2 Contents of the Notice
7-1:3 When the Notice Should Be Filed
7-1:4 Validity of the Lis Pendens Statute
7-2 The Effect of Filing a Notice of Pendency
7-2:1 Examples of the Effect
7-2:2 The Consequences of Not Filing
7-2:3 Prospective Effect of the Notice
7-3 Duration of the Notice of Pendency
7-3:1 Expiration and the Preservation of Rights
7-4 Amendment of the Notice of Pendency
7-5 Discharge of the Notice of Pendency: Three Methods

Chapter 8: Receiverships in Foreclosure
8-1 Introduction
8-1:1 The Need for a Receiver
8-1:2 The Application for a Receiver
8-1:3 Powers and Duties in General
8-1:4 Discharge in General
8-1:5 Alternatives to a Receiver
8-2 Who May Apply
8-2:1 Foreclosing Mortgagee
8-2:2 Junior Mortgagee
8-2:3 Other Interested Parties
8-3 Whether to Apply for a Rent Receivership
8-3:1 The Nature of the Property
8-3:2 The Need to Collect Income
8-3:3 Negative Consequences of Failing to Take Action
8-3:4 Likelihood of Success
8-3:5 Beyond Rents: Other Reasons for Receivers
8-4 Criteria for Judging Receivership Applications
8-4:1 “Precarious or Uncertain Security”
8-4:2 “Appointment upon Default” Clause
8-4:3 Courts’ Reluctance in Certain Situations
8-5 Procedure for Appointment of a Rent Receiver
8-5:1 The Motion for Appointment
8-5:2 Opposition to the Motion for Appointment
8-5:3 The Hearing
8-5:4 The Order of Appointment
8-6 Challenging a Receivership Order
8-7 Qualification of the Receiver
8-7:1 The Bond
8-7:2 Commencement of Duties
8-8 The Powers and Duties of the Rent Receiver
8-8:1 Powers and Duties Contained in the Order of Appointment
8-8:2 Rents Accruing Prior to and Subsequent to Appointment
8-8:3 Property Expenses
8-8:4 Rental and Sale
8-9 Actions Against the Rent Receiver
8-9:1 Permission to Sue
8-9:2 Potential Liabilities
8-10 Discharging the Receiver; Approval of the Accounting
8-10:1 Discharge
8-10:2 The Accounting
8-11 Compensation of the Receiver
8-12 Distribution of the Funds Held by the Receiver
8-12:1 Rights of Senior Mortgagees
8-12:2 Creditors’ Claims

Chapter 9: Responses to the Foreclosure Complaint
9-1 Contesting Answer
9-1:1 Time for Filing
9-1:2 Contents of the Contesting Answer
9-1:3 Sham or Frivolous Pleadings
9-2 Non-Contesting Answer
9-3 Counterclaims
9-3:1 Germane Counterclaims
9-3:2 Non-Germane Counterclaims
9-4 Cross-Claims
9-5 Pre-Answer Motions
9-6 Amended and Supplemental Pleadings
9-6:1 Amended Pleadings
9-6:2 Supplemental Pleadings
9-7 Notice of Appearance
9-8 Default
9-8:1 Entry of Default
9-8:2 Default Judgments
9-9 Setting Aside Defaults
9-9:1 Setting Aside an Entry of Default
9-9:2 Setting Aside a Default Judgment

Chapter 10: Typical Borrower Defenses
10-1 Introduction
10-2 Absence of Default
10-3 Oral Modification
10-3:1 The Parol Evidence Rule
10-3:2 The Statute of Frauds
10-3:3 The D’Oench, Duhme Doctrine
10-4 Failure of Consideration
10-5 Lender Liability
10-5:1 Breach of Fiduciary Duties
10-5:2 Tortious Interference with Contractual or Business Relations
10-5:3 Economic Duress
10-5:4 Duty to Lend
10-5:5 Lender Liability as a Counterclaim
10-6 Fraud
10-7 Duress
10-8 Illegality
10-9 Capacity
10-10 Usury
10-11 Unclean Hands
10-12 Forgery
10-13 Lack of Delivery
10-14 Discharge of Mortgage
10-15 Statute of Limitations
10-16 Laches
10-17 Mortgage as a Fraudulent Conveyance
10-18 Presumption of Payment
10-19 Fair Foreclosure Act Defenses
10-21 Miscellaneous Additional Defenses
10-21:1 Failure to Locate Original Instruments of Indebtedness
10-21:2 Tender of Evidence That the Mortgage Was to be Discharged
10-21:3 Wrongful Acceleration of the Mortgage Loan
10-21:4 Obligation to Foreclose First
10-21:5 Lack of Authority to Execute Loan Documents
10-21:6 Waiver of Default
10-21:7 Mortgagee’s Purchase of Tax Sale Certificates
10-21:8 Failure to Join Obligor or Guarantor in Foreclosure Action
10-21:9 Junior Encumbrancer’s Right to Insist upon Marshaling of Assets
10-21:10 Impairment of Collateral
10-21:11 Procedural Defect at Time Mortgage Was Given
10-21:12 Apportionment of Mortgage Debt
10-21:13 Failure to Comply with HUD Regulations
10-21:14 Violation of Ethical Obligations
10-21:15 Contract of Adhesion
10-21:16 Truth In Lending Act
10-21:17 Home Ownership Security Act
10-21:18 Violation of Affordable Housing Regulations
10-21:19 Possession of the Mortgage Note
10-22 Special Defenses to Purchase Money Mortgages
10-23 Insufficient Defenses
10-23:1 Purchaser’s Challenge to the Validity of Prior Existing Mortgages
10-23:2 Second Mortgagee’s Purchase and Foreclosure of First Mortgage
10-23:3 Borrower’s Intention to Bring the Loan Current
10-23:4 Improper Motives of Foreclosing Mortgagee
10-23:5 Failure to Make Demand Before Commencing Foreclosure Action
10-23:6 Insufficient Event of Default
10-23:7 Speculation That Property Values Will Rise
10-23:8 Discharge in Bankruptcy
10-23:9 Obligors Did Not Derive a Benefit from the Loan
10-23:10  Failure to Name Guarantors
10-23:11  Inaccurate Property Description
10-23:12  Failure to Read or Understand Loan Documents
10-23:13  Satisfaction of Mortgage Containing Future Advances Clause
10-23:14  Entire Controversy Doctrine
10-23:15  Written Assignments
10-23:16  Successive Actions
10-23:17 Licensing
10-23:18 Home Affordable Modification Program
10-23:19 Pooling and Servicing Agreements

Chapter 11: Disposition of the Foreclosure Action
11-1 Types of Actions
11-1:1 Uncontested Actions
11-1:2 Contested Actions
11-2 Motions for Summary Judgment
11-2:1 The Timeframe for Summary Judgment
11-2:2 Motion by Foreclosing Mortgagee
11-2:3 Mortgagor’s Burden upon Motion by Mortgagee
11-2:4 Deciding the Summary Judgment Motion
11-2:5 Impact of Summary Judgment: Return to the Office of Foreclosure
11-3 Discovery in Foreclosure Actions
11-3:1 Requests for the Production of Documents
11-3:2 Written Interrogatories
11-3:3 Requests for Admissions
11-3:4 Depositions
11-3:5 Sanctions
11-4 Pretrial Conference
11-4:1 The Pretrial Order
11-5 Plaintiff’s Proof
11-5:1 Proving Execution of the Mortgage
11-5:2 Proving Delivery of the Mortgage
11-5:3 Proving Nonpayment of the Mortgage
11-5:4 Lost Documents: Secondary Evidence
11-6 Defendants’ Proof
11-6:1 Shifting Burden
11-6:2 Disproving Execution and Delivery
11-6:3 Disproving Nonpayment: Affirmative Defenses
11-6:4 Other Defense Burdens
11-7 Impact of the Parol Evidence Rule
11-7:1 Exceptions to the Parol Evidence Rule
11-8 Conduct of the Trial
11-9 Settlement of the Foreclosure Action
11-9:1 Reinstatement
11-9:2 The Forbearance Agreement
11-9:3 Deed in Lieu of Foreclosure
11-9:4 Discounted Payoff
11-9:5 Mediation
11-10 Dismissal of the Foreclosure Action
11-10:1 Dismissals
11-10:2 The Abandonment Rule: Encumbrancers
11-11 Sale of the Mortgaged Property ­ Pendente Lite

Chapter 12: Judgment of Foreclosure and Sale
12-1 Procedure for Obtaining Judgment
12-1:1 Actions Not Governed by the Fair Foreclosure Act
12-1:2 Actions Governed by the Fair Foreclosure Act
12-1:3 Proofs to be Submitted for Final Judgment
12-1:4 The Final Judgment Package
12-2 Certificate of Regularity
12-3 Contents of the Final Judgment
12-3:1 Amount Due
12-3:2 Subsequent Encumbrancers
12-3:3 Manner of Sale
12-4 Operation and Effect of the Judgment
12-4:1 Introduction
12-4:2 Effect on Unrecorded Instruments
12-4:3 Merger
12-5 Service of the Judgment
12-6 Amending or Correcting the Judgment
12-7 Vacating the Judgment
12-8 Assignment of the Judgment
12-9 Appealing the Judgment
12-10 Satisfaction of the Judgment

Chapter 13: The Foreclosure Sale
13-1 Introduction
13-1:1 Overview
13-1:2 The Bidding Process
13-1:3 The Foreclosure Sale: A First Look
13-2 The Writ of Execution
13-3 The Notice of Sale
13-3:1 Contents of the Notice
13-3:2 Service of the Notice
13-3:3 The Need for Advertising
13-4 Adjournments and Stays
13-4:1 The Sheriff’s Power
13-4:2 The Role of the Court
13-5 Conduct of the Sale
13-5:1 Who Conducts the Sale
13-5:2 Uniform Sale Procedures
13-5:3 Local Conditions of Sale
13-5:4 Property Descriptions
13-5:5 Disclosure of Encumbrances
13-5:6 Who May Bid at the Sale
13-5:7 Sale of the Mortgaged Property as a Whole or in Parcels
13-6 Payment of the Successful Bid
13-6:1 The Redemption Period
13-6:2 Terms of Payment
13-7 Enforcement of the Successful Bidder’s Obligations
13-7:1 Resale of the Mortgaged Property
13-8 Relief from a Successful Bid
13-8:1 Clouds on Title
13-8:2 Other Grounds
13-9 Report and Confirmation of the Sale
13-9:1 Report of the Sale
13-9:2 Confirmation of the Sale
13-9:3 Objections to a Sale or Confirmation
13-10 Vacating or Setting Aside a Sale
13-10:1 Who May Apply to Set Aside a Sale
13-10:2 Grounds for Vacating or Setting Aside a Sale
13-10:3 Procedure for Vacating or Setting Aside a Sale
13-10:4 Liability for Sale Vacated or Set Aside
13-11 Delivery of the Deed
13-12 Rights Upon Delivery of the Deed
13-13 The Selling Officer’s Fees

Chapter 14: Redemption
14-1 Introduction
14-2 Who Can Redeem
14-3 Duration of the Right to Redeem
14-3:1 Termination by Foreclosure Action
14-3:2 Termination Under the Statute of Limitations
14-3:3 Release or Surrender of the Right
14-4 Amount Required to Redeem
14-4:1 The Principal Amount of the Mortgage Debt
14-4:2 Interest
14-4:3 Amounts Paid to Preserve and Protect the Property: Upkeep, Repairs, Taxes, Assessments and Other Government Liens
14-4:4 Counsel Fees and Costs
14-5 Redemption Within 10 Days After the Sale
14-6 Omitted Parties
14-7 Redemption by the United States After Sale
14-8 Redemption After Deficiency Judgment
14-9 Actions to Redeem

Chapter 15: Deficiency Actions
15-1 Introduction
15-2 Applicability of the Deficiency Action Statute
15-3 Necessity of a Separate Action
15-4 The Foreclosure First Requirement
15-5 Limitations Period for Bringing a Deficiency Action
15-6 Notice of the Proposed Deficiency Action
15-7 The Fair Market Value Credit
15-8 Revival of the Right of Redemption
15-9 Procedure Where the Mortgage Has Been Extinguished by Foreclosure of a Prior Mortgage
15-10 Assuming Grantees and Guarantors
15-11 Fair Market Value Credit in Non-Statutory Deficiency Actions
15-12 Limitations Period in Non-Statutory Deficiency Actions
15-13 Non-Recourse Carve-Out Provisions

Chapter 16: Surplus Money Proceedings
16-1 Introduction
16-2 Procedures
16-3 Junior Encumbrancers
16-4 Senior Encumbrancers
16-5 Additional Sums Paid by the Foreclosing Mortgagee
16-6 Owner of the Equity of Redemption

Chapter 17: Strict Foreclosure; Reforeclosure
17-1 Strict Foreclosure
17-1:1 Introduction
17-1:2 Complaint in Strict Foreclosure
17-1:3 Order for Redemption
17-1:4 Final Judgment; Reconveyance
17-2 Reforeclosure

Chapter 18: Municipal Tax Liens
18-1 Introduction
18-2 Municipal Tax Sales
18-3 Tax Sale Certificates
18-4 Sale or Assignment of Municipal Certificates
18-5 In Personam Actions to Foreclose
18-6 In Rem Actions to Foreclose
18-7 Redemption
18-8 Lands Transferred to the State or County
18-9 Joint Municipal Lien Pools

Chapter 19: Condominium and Homeowners Association Liens
19-1 Condominium Association Liens
19-1:1 Introduction
19-1:2 Lien for Common Expenses
19-1:3 Priority of the Lien
19-1:4 Liability for Common Expenses Following Conveyance
19-1:5 Foreclosure of Lien
19-1:6 Applicability of the Fair Debt Collection Practices Act
19-1:7 Attorneys’ Fees
19-2 Homeowners Association Liens

Chapter 20: Appeals
20-1 Appeals to the Appellate Division
20-1:1 Appealable Determinations
20-1:2 Who May Appeal
20-1:3 Time to Appeal
20-1:4 Procedure for Appeal
20-1:5 Stays Pending Appeal
20-1:6 Standard of Review
20-1:7 Determination of the Appeal
20-2 Appeals to the New Jersey Supreme Court

Chapter 21: Bankruptcy
21-1 Introduction
21-2 General Overview
21-2:1 Applicable Law and Rules
21-2:2 Different Types of Bankruptcy Cases
21-2:3 The Debtor’s Estate
21-2:4 The 341 Meeting
21-3 The Automatic Stay
21-4 Use of Cash Collateral
21-4:1 Introduction
21-4:2 Adequate Protection
21-4:3 Cash Collateral Stipulations
21-4:4 Procedural Issues Related to the Use of Cash Collateral
21- 5 Impact of an Assignment of Rents
21-6 Relief from the Automatic Stay
21-6:1 Lack of Equity in Property Not Necessary for an Effective Reorganization
21-6:2 For Cause, Including Lack of Adequate Protection
21-6:3 “Single Asset Real Estate” as Defined in § 101(51B)
21-6:4 Burden of Proof and Procedure
21-7 Pre-Petition Waivers of the Automatic Stay
21-8 Effect of Bankruptcy on a Pre-Petition Receiver
21-9 Chapter 11 Plan Confirmation and Cram Down
21-9:1 The Impaired Accepting Class
21-9:2 The Feasibility Requirement
21-9:3 The Absolute Priority Rule and the New Value Exception
21-9:4 Unfair Discrimination and Fair and Equitable Treatment
21- 10 Chapter 13 Plan Confirmation Issues
21-10:1 The Antimodification Provision of § 1322(b)(2)
21-10:2 Additional Chapter 13 Plan Issues
21-10:3 Strip Off of Wholly Undersecured Debt
21-10:4 Homeowner’s Ability to Cure a Mortgage Default Following a Foreclosure Sale
21-11 Foreclosures as Fraudulent Transfers
21-12 Attorneys’ Fees

Appendix: New Jersey Foreclosure Law Forms
Table of Cases