State Law Update: New Jersey Creates Summary Foreclosure Process for Vacant and Abandoned Properties

Foreclosure

On December 3, New Jersey Governor Chris Christie signed SB 2156, which authorizes lenders to bring summary actions to foreclose mortgages on vacant and abandoned residential properties, and grants state courts the authority to enter a final residential mortgage foreclosure judgment if it finds, by clear and convincing evidence, that the residential property is “vacant and abandoned.” Vacant and abandoned means: (i) the property is not occupied by a mortgagor or by a tenant who entered into a lease agreement before the mortgagee served notice of intention to commence foreclosure, and (ii) there exist at least two of 15 enumerated conditions that indicate vacancy and abandonment. If the court makes a finding in the foreclosure judgment that the property is vacant and abandoned, the sheriff will be required to sell the property within 60 days of the sheriff’s receipt of any writ of execution issued by the court. The law took effect immediately, but does not become operative until April 1, 2013.