Foreclosure is the legal process effected through the court system in which a mortgagee (lender—often a bank) terminates a mortgagor’s (borrower’s) interest in the real property in which the mortgagor gave the mortgagee a security interest (a lien) as collateral for the loan used to purchase the property.

Foreclosure generally occurs when a homeowner defaults and fails to make mortgage payments as required by the loan agreement (promissory note).

Foreclosure allows the lender to seize the property, remove the homeowner, and sell the home—all of which are legal remedies the mortgagor and mortgagee agreed to in the mortgage contract.

In New Jersey, foreclosure is a judicial process that begins when a homeowner defaults on their mortgage payments. The lender, typically a bank, must file a lawsuit in the New Jersey Superior Court to obtain a court order to foreclose on the property. The process starts with the lender sending a Notice of Intention to Foreclose to the borrower, providing at least 30 days to cure the default. If the borrower fails to do so, the lender can then file a complaint with the court. The homeowner has the right to contest the foreclosure by filing an answer within 35 days of receiving the complaint. If the court rules in favor of the lender, a final judgment of foreclosure is issued, and the property is sold at a sheriff's sale. New Jersey law also provides for mediation between the lender and borrower to potentially work out a settlement to avoid foreclosure. It's important for homeowners facing foreclosure in New Jersey to consult with an attorney to understand their rights and options under state law.