Greenspoon Marder LLP Financial Services Client Alert: State of New Jersey

Dec 2, 2020

Greenspoon Marder LLP Obtains Favorable Result on Statute of Limitations analysis in New Jersey

New Jersey Court determines a foreclosure is not time barred as the Office of Foreclosure’s application of the Statute of Limitations cannot be implemented retroactively.

Recently, the Office of Foreclosure denied a Motion for Final Judgment on the basis of the Statute of Limitations having elapsed. The mortgage was executed on September 24, 1981, with default in payment occurring on July 1, 2012. The Office of Foreclosure denied the Final Judgment, ruling “The mortgage in this matter was recorded on 9/30/1981. The borrowers defaulted on the loan on 7/01/2012. By then more than 36 years had passed since the recording of the mortgage, and more than 6 years had passed since the borrowers defaulted.”

This result was troubling because the Office of Foreclosure attempted to apply the Statute of Limitations to the loan retroactively, which is not the state of the law in New Jersey. This loan originated more than thirteen years prior to the enactment of the Fair Foreclosure Act, and more than twenty-seven years prior to the Statute of Limitations being codified in the Act. Furthermore, the most recent amendment to the Fair Foreclosure Act does not impose a six-years-from-default Statute of Limitation unless the loan was originated on or after April 29, 2019.

The loan at issue, therefore, was not subject to either the initial statute of limitations in the Fair Foreclosure Act or the newly enacted statute of limitations.

We filed a Motion to Deem Plaintiff’s Action Timely and Not Time-Barred by the Fair Foreclosure Act with the Presiding Judge of the County’s Chancery Division, and the Motion was Granted. We are now able proceed with Final Judgment in this matter.

Please contact to our office with any Statute of Limitations questions.

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Greenspoon Marder LLP Financial Services Client Alert: State of New Jersey

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