New Jersey Supreme Court Clarifies Foreclosure Paperwork Requirements for Lenders

Foreclosures in New Jersey came to a screeching halt after scandal erupted in 2010. Many banks had engaged robosigning: the fraudulent submission of foreclosure paperwork to the courts. In response, New Jersey courts recently required foreclosure attorneys to certify that they had personally worked with the file before filing for foreclosure.

In addition to certification, the courts also came to a decision in the U.S. Bank v. Guillaume case. This landmark case involved homeowners from East Orange who accused their lender of not supplying enough information when it began foreclosure on their house in 2008. On the paperwork, only the name of the servicer that collected the monthly payments was listed.

As a result of the New Jersey Supreme Court decision and a subsequent judicial order, mortgage lenders are now required to list its own name and contact information in addition to that of the loan servicing company on the notice of intent to foreclose. Further, lenders are required to include contact information to discuss resolution options.

Remedies for Deficient Paperwork

Foreclosure filings that include only loan servicer information are considered deficient now under the notice requirements of the Fair Foreclosure Act. To move forward with foreclosure proceedings against homeowners, lenders must submit additional information and send updated paperwork to the homeowner. In addition, the Supreme Court offered other possibilities to remedy deficient notices of intent. These include reducing fees, legal and otherwise, owed to the bank and to its attorneys as well as dismissal of the case completely.

These court decisions now provide clearer direction for the information mortgage lenders must include on the notice of intent to foreclose. It also provides protection for homeowners facing foreclosure. However, even with the protections in place, it is important for homeowners facing foreclosure to protect their legal rights by consulting with an attorney.