NJ Law Establishes New Short Sale Process for Residential Mortgage Foreclosures
While a short sale can help underwater homeowners avoid foreclosure, the process isn’t always as “short” as buyers would like. In response, New Jersey recently enacted a new law that establishes a process for the consideration of offers from short sale buyers during residential mortgage foreclosures.
In a short sale, the lender or servicer agrees to release the lien that is secured by a residential mortgage on the property upon receipt of a lesser amount than is owed on the mortgage. For lenders, a short sale is often preferable to foreclosure because it allows the bank to avoid the time and expense of a foreclosure suit, as well the burdens associated with owning a hard-to-sell property.
Assembly Bill 2060 specifically amends and supplements New Jersey’s “Fair Foreclosure Act” to require residential mortgage loan servicers to engage in consultations on short sales with prospective buyers and to respond to short sale offers from buyers within certain timeframes. Under the bill, “servicer” is defined as the “person, corporation or other entity responsible for servicing a residential mortgage loan, including a residential mortgage lender who makes or holds a loan if the lender also services the loan.”
The new short sale legislation specifically requires a mortgage loan servicer to respond to a good faith offer from a seller, seller’s agent, or authorized third party to purchase the property through a short sale within 60 days of the date of the offer. A response would include an approval, a denial, or a request for further information. If the servicer decides not to approve a short sale, or fails to respond to the seller’s, seller’s agent’s, or authorized third party’s offer within 60 days, any deposit made by the buyer in connection with the purchase of the property shall be refunded in its entirety and the potential purchaser shall have no further obligation with respect to the sale or other disposition of the property.
Assembly Bill 2060 specifically states that its provisions do not constrain a servicer and debtor from participating in the New Jersey Judiciary’s Foreclosure Mediation Program or any other form of mediation or settlement discussion or enter into a settlement agreement. The legislation takes effect on September 19, 2017.
Do you have any questions? Would you like to discuss the matter further? If so, please contact me, Matt Kane, at 201-806-3364.
Section 363 Sales in Bankruptcy: What Businesses, Lenders, and Buyers Need to Know
When a company enters Chapter 11 bankruptcy, many assume the process will culminate in a lengthy reorganization plan. However, distressed businesses are increasingly being sold through a different mechanism — a sale under Section 363 of the United States Bankruptcy Code. A Section 363 sale allows a company, as a debtor-in-possession in bankruptcy, to sell […]
Zoning Laws Explained: What You Need to Know Before Buying Property
Before buying property, it is critical to determine whether local zoning laws may affect your plans. If you plan to redevelop the property, you will want to confirm that local zoning regulations permit development as intended. If acquiring property that is already developed, you must verify that the use is permitted in the underlying zoning […]
Special Needs Trusts in New Jersey: Planning for Your Loved One’s Future
For parents of a child with a disability, estate planning raises concerns that go well beyond deciding who will inherit their assets. Parents may spend years making sure their child has the right care, services, and support. Eventually, they must also confront a difficult question: Who will take over when they can no longer do […]
What Every Real Estate Investor Should Know Before Buying a Rental Property
Before buying a New Jersey rental property, an investor should verify realistic operating numbers, the property’s legal and regulatory status, lead-based paint and flood compliance, the existing leases and tenant protections, and the right ownership structure. A rental property is more than a piece of real estate; it is an operating business subject to legal, […]
Can You Change an Irrevocable Trust in New Jersey?
In New Jersey, an irrevocable trust can sometimes be modified even though its name suggests otherwise, and one of the primary tools for doing so is a process called decanting. Whether decanting is available depends on the specific terms of the trust and the discretion given to the trustee. Key takeaways: New Jersey has no […]
How Intellectual Property Valuation Will Impact Business Transactions
Intellectual property valuation determines the monetary value of a business’s IP assets, and it drives outcomes in licensing deals, joint ventures, mergers and acquisitions, financing, and ownership disputes. The most valuable assets of a business are often the things that cannot be seen or touched: a proprietary process, a copyrighted work, brand recognition, or the […]
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!
