On December 3, 2012, Governor Christie signed a new foreclosure law that becomes operative April 1, 2013. This New Jersey Act (P.L. 2012, c.70) permits lenders to foreclose mortgages using an expedited summary action if the encumbered residential property is deemed to be abandoned and vacant. Read the full law here >>>

Regarding underwriting guidelines, any title deriving through this new procedure must be submitted to my underwriters’ staff for approval.

Summary of new law: In order to be found to be “vacant and abandoned,” a court must find that the mortgaged property is not occupied by a mortgagor or tenant (which tenancy was created before the service of the notice of intention to foreclose); and that at least 2 of the following conditions exist:

(1) overgrown or neglected vegetation;

(2) the accumulation of newspapers, circulars, flyers or mail on the property;

(3) disconnected gas, electric, or water utility services to the property;

(4) the accumulation of hazardous, noxious, or unhealthy substances or materials on the property;

(5) the accumulation of junk, litter, trash or debris on the property;

(6) the absence of window treatments such as blinds, curtains or shutters;

(7) the absence of furnishings and personal items;

(8) statements of neighbors, delivery persons, or government employees indicating that the residence is vacant and abandoned;

(9) windows or entrances to the property that are boarded up or closed off or multiple window panes that are damaged, broken and unrepaired;

(10) doors to the property that are smashed through, broken off, unhinged, or continuously unlocked;

(11) a risk to the health, safety or welfare of the public, or any adjoining or adjacent property owners, exists due to acts of vandalism, loitering, criminal conduct, or the physical destruction or deterioration of the property;

(12) an uncorrected violation of a municipal building, housing, or similar code during the preceding year, or an order by municipal authorities declaring the property to be unfit for occupancy and to remain vacant and unoccupied;

(13) the mortgagee or other authorized party has secured or winterized the property due to the property being deemed vacant and unprotected or in danger of freezing;

(14) a written statement issued by any mortgagor expressing the clear intent of all mortgagors to abandon the property;

(15) any other reasonable indicia of abandonment.

A residential property shall not be considered “vacant and abandoned” if, on the property:

(1) there is an unoccupied building which is undergoing construction, renovation, or rehabilitation that is proceeding diligently to completion, and the building is in compliance with all applicable ordinances, codes, regulations, and statutes;

(2) there is a building occupied on a seasonal basis, but otherwise secure; or

(3) there is a building that is secure, but is the subject of a probate action, action to quiet title, or other ownership dispute.

Read the full law here >>>