Statute of limitations for foreclosures in N.J. becomes law | State | -- Your State. Your News.

Jul 03rd
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Statute of limitations for foreclosures in N.J. becomes law

forecloselogo_optLegislation that sets a time frame under which a lender can file a home foreclosure action against a borrower who in is default was signed into law Friday by Gov. Jon Corzine.

The law, A-3269, gives a mortgage lender 20 years from the date of a borrower's default to bring a specific foreclosure action. It ensures that decades-old defaults – which under previous law could still be acted against – do not remain as clouds on a property's title, something that can grind a sale to a halt.

"Given the current volatility in the housing market, there is no room for ambiguity," said Assemblyman John Wisniewski (D-Middlesex), a co-sponsor of the legislation. "A distinct path to a clear title can be the difference between allowing a property to be sold or requiring it to languish in legal purgatory."

"Past defaults, even if they never lead to a formal action of foreclosure, shouldn't be allowed to hang over a property in perpetuity," said Assemblyman Gary Schaer (D-Passaic), a co-sponsor. "This is an area of law that should have been settled decades – if not a century – ago."

The law provides the time limits between when a lender defaults on a loan and when the mortgage holder can bring an action of foreclosure:

  • Six years from the date of maturity on the mortgage, matching the statute of limitations in current contract law;
  • 36 years from the date of recording or execution of the mortgage, provided the mortgage itself does not provide for a period of repayment in excess of 30 years; or
  • 20 years from the date of default.

"As we look to jumpstart the housing market and give new homeowners the keys to their future, especially in cities hard-hit by the foreclosure crisis, creating this legal certainty is more import ant than ever," said Assemblywoman L. Grace Spencer (D-Essex).



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