NJ Foreclosure Freeze? What is the Governor's Executive Order Moratorium all about?
As everyone is well aware, the COVID-19 health crisis has taken an enormous toll on New Jersey. We all know of family or friends who have fallen ill or who have otherwise been hit hard by the virus and the widespread shutdowns and business closures that have occurred.
It has been widely reported that there has been a moratorium ordered stopping foreclosures in New Jersey. For example, a recent article is entitled "NJ freezes evictions and foreclosures during coronavirus crisis" (see: https://nj1015.com/nj-freezes-evictions-and-foreclosures-during-coronavirus-crisis/).
This often repeated headline is not entirely accurate. Yes it is true that, Governor Phil Murphy signed bill A-3859 into law, followed by Executive Order No. 106 which imposed a moratorium on removing individuals from their homes pursuant to an eviction or foreclosure proceeding.
Critically however, the present moratorium does NOT "freeze" or stop foreclosures. This is significantly different from the last time a moratorium was imposed in 2010 which did in fact freeze foreclosures entirely.
Sadly for those facing difficulties with paying their mortgage, the present moratorium specifically states that foreclosure actions may be "initiated or continued":
While eviction and foreclosure proceedings may be initiated or continued during the time this Order is in effect, enforcement of all judgments for possession, warrants of removal, and writs of possession shall be stayed while this Order is in effect, unless the court determines on its own motion or motion of the parties that enforcement is necessary in the interest of justice.
You can read the full text of the executive order here: https://nj.gov/infobank/eo/056murphy/pdf/EO-106.pdf
What does this mean for homeowners?
1- If you were in imminent danger of a foreclosure, the bank can still initiate a foreclosure case.
2- If you have an existing foreclosure case, the case may still proceed. The bank can file motions for summary judgment, apply for final judgment, and push the case forward right up to the final stage.
3-Our office has seen foreclosure cases be initiated this past month, therefore, a homeowner should not expect a bank to voluntarily stop a foreclosure.
If you are facing foreclosure at this time, contact our office for information on how we can help you.