Mortgage foreclosure is a race, of sorts. A race against the clock. A foreclosure clock. Like most clocks, the foreclosure clock can run fast, as it does in Texas, a non judicial foreclosure state where the process may take three months, or slow(er), as in New Jersey, a judicial foreclosure state where the process can take a year or more from start to finish.

The race is finished when an auctioneer declares, "SOLD!" Unless, of course, there is a right of redemption, but that's another race. And another Blog. In fact, "ROR" is the topic of next Friday's FYI Blog.

Ok, we know how some races end. Badly. If our mortgage loan is seriously delinquent how do we know what triggers the foreclosure clock and starts the race? And how do we call time out?

Different laws. Different clocks. In judicial foreclosure states, including New Jersey, the lender cannot simply declare a loan in to be in default, then seize the home and eject the (former) homeowners. Well, OK, they can but not without strict compliance to the NJ Fair Foreclosure Act (FFA). Lenders are required to send a Notice of Intention to Foreclose to each mortgagor at least 30 days before it can initiate foreclosure proceedings. Some people refer to this as a 30 day Notice of Intent, or a 30 day NOI..

After the Homeowner misses a couple of payments,maybe three, and doesn't really know where this month's payment will come from, (please don't even think Atlantic City), the lender will send a formal letter, the NOI. to each borrower. The FFA requires this notice to include the following provisions:

1. A description of the obligation or real estate security interest;

2. The nature of the default;

3. The right of the debtor to reinstate the loan;

4. The amount of money needed to fully reinstate the loan;

5. The date the reinstatement must be tendered, and to whom the reinstatement should be sent;

6. What actions the lender will take, such as foreclosure, if the reinstatement does not occur;

7. The borrower's liability for the payment of all attorney fees and court costs if reinstatement

Occurs subsequent to the commencement of foreclosure;

8. The borrower's right, if any, to transfer the property subject to the security instrument;

9. The borrower's right to be represented by legal counsel, and who to contact in the event he is unable to afford legal counsel;

10. The possible availability of financial assistance from state, federal or non-profit groups, if any.

11. The name, address and telephone number of a lender representative who the borrower can contact if he disagrees with the mortgagee's assertations of the debt or defaulted amounts.

The Fair Foreclosure Act allows the borrowers to cure the default, subsequent to the expiration of the Notice of Intention to Foreclose, and prior to the entry of Final Judgment, once every 18 months. After entry of Final Judgment, the lender may accept reinstatement at its discretion.

If, after the thirty day window has closed, the borrowers haven't entered into an accepted reinstatement plan, the lender will file with the County Clerk a Lis pendens (formal notice to the world an action is pending which might impact title to the mortgaged property), then have the Sheriff's Department, or a private process provider serve upon the homeowner a Summons and Complaint of foreclosure.

Now the clock is running. If the homeowners don't do much in the way of slowing down the foreclosure, they could be out of their home inside a year. Even if the home is sold at Sheriffs's Sale... The former homeowners can still keep their home by exercising their Right of Redemption (ROR).  Now you can think Atlantic City.  Joking.

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