Assemblywoman BONNIE WATSON COLEMAN
District 15 (Hunterdon and Mercer)
Assemblyman BENJIE E. WIMBERLY
District 35 (Bergen and Passaic)
Assemblyman ALBERT COUTINHO
District 29 (Essex)
Assemblywomen Caride and Spencer
Codifies the Judiciary's Foreclosure Mediation Program; dedicates monies from foreclosure filing fees and fines.
CURRENT VERSION OF TEXT
An Act concerning foreclosure mediation, amending N.J.S.22A:2-12, supplementing Title 2A of the New Jersey Statutes, and dedicating monies from foreclosure filing fees and fines.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. (New section) This act shall be known and may be cited as the “New Jersey Foreclosure Mediation Act.”
2. (New section) a. The Legislature finds and declares that the New Jersey Judiciary established a Foreclosure Mediation Program in 2009 in response to the increase in residential foreclosures. This act ensures the continuation of mediation services provided under that program to assist homeowners and lenders in pursuing a mutually agreeable alternative to mortgage foreclosure litigation and to avoid the harmful effects of residential property foreclosure on homeowners, families, and communities.
b. For the purposes of this act:
"Eligible property" means an owner-occupied one- to three-family residential property that is the homeowner-borrower’s primary residence.
"Foreclosure Mediation Program" or "mediation program" means the New Jersey Judiciary's Foreclosure Mediation Program as authorized by the Supreme Court of New Jersey.
"Homeowner-borrower" means the borrower on a mortgage loan for an eligible property that is subject to a foreclosure complaint filed by the lender or an assignee.
3. (New section) Upon the filing of a mortgage foreclosure complaint against an eligible property, the homeowner-borrower shall receive notice of the option to participate in the Foreclosure Mediation Program in accordance with the court rules, procedures, and guidelines adopted by the Supreme Court.
4. (New section) a. (1) A court may order mediation whenever a homeowner-borrower files an answer to a foreclosure complaint.
(2) Alternatively, the homeowner-borrower may initiate the process for scheduling mediation by submitting a mediation request to the court, along with any other documents required by the Supreme Court. The deadline for mediation request submission shall be determined by the court rules, procedures, and guidelines adopted by the Supreme Court.
b. After requesting mediation, the homeowner-borrower may seek to stay the sheriff’s sale in accordance with applicable court rules and procedures.
c. The homeowner-borrower shall not be required to pay any fees to participate in the mediation program.
5. (New section) a. Whenever a person submits a mediation request or is ordered to participate in the mediation program, that person may be responsible for submitting a certification document to the court, confirming that they meet the definition of a homeowner-borrower and that the property being foreclosed upon continues to be an eligible property pursuant to subsection b. of section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill).
b. Each party shall participate in foreclosure mediation in good faith. A good faith effort includes, but is not limited to, the mortgage lender or its servicer attending the mediation session in person or by telephone through a person with the authority to consider alternatives to foreclosure so that the parties may reach a mutually acceptable loan modification, loan workout, refinancing agreement, or other resolution. If any party or attorney for a party fails to attend a mediation session or to make a good faith effort to mediate, the court, in addition to any sanction the court deems appropriate, may sanction a party or attorney for a violation of this subsection with a civil penalty of up to $1,000 or allow a party to recover reasonable attorney’s fees or litigation expenses, or both. In determining the type of sanction to impose against a party, the court may consider whether the conduct was intentional and whether the party has engaged in a pattern of similar conduct with respect to the current complaint or any previous complaints.
6. (New section) There is created in the General Fund a dedicated, non-lapsing fund to be known as the “Foreclosure Mediation Fund,” to be held separate and apart from all other funds of the State. The fund shall be administered by the Administrative Office of the Courts. Receipts equaling $50 out of every fee associated with the filing of the first paper in each foreclosure action pursuant to N.J.S.22A:2-12, and all monies collected from each civil penalty imposed for violations of subsection b. of section 5 of P.L. , c. (C. ) (pending before the Legislature as this bill), shall be deposited in the fund and shall be appropriated annually by the Legislature to the Administrative Office of the Courts for the purposes of the operation of the Foreclosure Mediation Program and to enhance the integrity of the mortgage foreclosure review process. All interest or other income earned on monies deposited into the fund, and any monies that may be appropriated or otherwise become available for the purpose of the fund, shall be credited and deposited into the fund.
7. N.J.S.22A:2-12 is amended to read as follows:
22A:2-12. Payment of fees in Chancery Division of Superior Court upon filing of first paper. Upon the filing of the first paper in any action or proceeding in the Chancery Division of the Superior Court, there shall be paid to the clerk of the court, for the use of the State, the following fees, which, except as hereinafter provided, shall constitute the entire fees to be collected by the clerk for the use of the State, down to the final disposition of the cause:
Receivership and partition, $200.00.
All other actions and proceedings except in foreclosure actions, probate cases and actions and proceedings for divorce or dissolution of a civil union, $200.00.
All actions for foreclosure, $250.00, $50.00 of which shall be credited and deposited into the “Foreclosure Mediation Fund” as established by section 6 of P.L. , c. (C. ) (pending before the Legislature as this bill).
Actions and proceedings for divorce or dissolution of a civil union, $250.00, $25.00 of which shall be forwarded by the Clerk of the Superior Court as provided in section 2 of P.L.1993, c.188 (C.52:27D-43.24a).
Any person filing a motion in any action or proceeding shall pay to the clerk $30.00.
(cf: P.L.2006, c.103, s.85)
8. This act shall take effect immediately.
New Jersey’s Foreclosure Mediation Program was established in 2009 by the New Jersey Judiciary in response to an alarming increase in residential foreclosures. This act ensures the Foreclosure Mediation Program’s continuation by establishing it in statute, and strengthens the program to more effectively protect home ownership in New Jersey.
The bill authorizes eligible homeowners to submit a mediation request, thereby initiating the process of scheduling a mediation session with their lender. Along with the mediation request, the homeowner may be required to submit additional information that may be necessary for creating a loan modification, or other agreement, but will not have to pay any fees to participate in the program. The bill requires lenders to have a representative attend the mediation session, either in person or by telephone, who has authority to reach a mutually acceptable loan modification, loan workout, refinancing agreement, or other resolution. If either party fails to attend a mediation session or make a good faith effort to mediate, courts will have the authority to penalize the party through a fine of up to $1,000, through allowing the other party to recover reasonable attorney’s fees and litigation expenses, or through any other sanction the court deems appropriate.
The bill also creates a dedicated, non-lapsing fund within the General Fund to be known as the “Foreclosure Mediation Fund.” This fund would be comprised of receipts of $50 from every foreclosure complaint filing fee, set at $250 under the bill, and all fines imposed on lenders for noncompliance with obligations of the mediation program found in subsection b. of section 5 of P.L. , c. (C. ) (pending before the Legislature as this bill).