Residential Evictions: What Homeowners Need to Know - October 2021

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As of October 7, 2021

REMOVALS

Can I be removed from my home as a result of a foreclosure proceeding during the COVID-19 emergency?

No. On March 19, 2020, New Jersey Governor Philip Murphy issued Executive Order 106. Under this order, no homeowner may be removed from his or her home as a result of a foreclosure proceeding at this time. You cannot be removed even if a final judgment of foreclosure has been entered and a sheriff’s sale of your property has taken place. The eviction moratorium does not affect court proceedings; instead, it prevents removals. More information on court proceedings is below.

How long will the eviction moratorium last?

The state eviction moratorium will end for homeowners on November 15, 2021. (See Executive Order 249, which modifies Executive Order 106.)

Do I still need to pay my mortgage?

Yes. You will have to make your mortgage payments sooner or later. If you need extra time, however, help is available for some.

If you have a mortgage insured by the Federal Housing Administration (FHA) and you live in the mortgaged property as your primary residence, you have several options, including these:

  • If you can resume making current mortgage payments but you have missed payments in the past, your servicer can place your mortgage arrears in a “zero-interest subordinate lien” that is repaid when the mortgage terminates, usually when you refinance or sell your home. This means that you won’t have to pay your accumulated mortgage arrears until that time.
  • If you cannot resume making current mortgage payments, then you servicer can extend your mortgage for 360 months at a fixed rate and reduce your monthly payments.

The purpose of these options is to make sure you have sustainable monthly payments. Call your servicer to learn more.

Homeowners who hold single-family mortgages from Fannie Mae or Freddie Mac and who entered into forbearance plans by February 28, 2021, may be eligible for a three-month extension of their mortgage forbearance. Property owners who hold multifamily mortgages from Fannie Mae or Freddie Mac may apply for forbearance indefinitely, until the government announces otherwise. Multifamily borrowers must agree to certain tenant protections in order to obtain mortgage forbearance. For more information on mortgage forbearance, go to the help page of the Consumer Finance Protection Bureau.

In addition, in 2020, Governor Murphy negotiated some important relief for homeowners with mortgages, including those that are not backed by the federal government. If you contact your mortgage servicer, you may be eligible for: (1) a grace period for mortgage payments; (2) assurance that your servicer will not report late or missed payments during this grace period to credit agencies; (3) a delay in your servicer’s initiation of foreclosure sales or evictions; and (4) relief from certain fees and charges for some period. For more information, check the FAQs issued by the state. You can also check the website of New Jersey Housing and Mortgage Finance Agency for updates on available help and to access a list of counselors by county.

If you need advice on the financial assistance available to homeowners, you can contact Housing Help NJ.

Is there a national moratorium on evictions?

No. The moratorium that had protected some homeowners from eviction as a result of foreclosure expired on September 30, 2021.

COURT HEARINGS

Can lenders still begin foreclosure proceedings during this period?

Yes. The Superior Court Office of Foreclosure is accepting new cases and electronic filings in existing cases.

The Department of Housing and Urban Development (HUD), Department of Veterans Affairs (VA), Department of Agriculture (USDA), and Federal Housing Finance Agency (FHFA) were prevented from filing foreclosure proceedings against single-family mortgage holders through July 31, 2021. That foreclosure moratorium has now expired.

Will the Foreclosure Office process cases during this period?

Yes. The Foreclosure Office administers parts of most foreclosure cases and manages most of the process when a foreclosure is “uncontested,” meaning that the homeowner did not file an answer to the complaint. Under a June 25, 2020 order issued and repeatedly extended by the New Jersey Supreme Court, the Office of Foreclosure is processing cases as it normally does. If you have questions about an uncontested foreclosure case that is pending, you can try contacting the Office of Foreclosure at 609-421-6100 or Scco.Mailbox@njcourts.gov.

Will the courts hear foreclosure cases during this period?

Yes. There is no order suspending court hearings in contested foreclosure cases (in which the homeowner answered the complaint). Please note, however, that under a March 23, 2021 order, operations continue to be “primarily remote with some in-person options.” Thus, most hearings, conferences, and arguments will be held by video or telephone. Please check with the court where the case is pending if you have questions. Please also check the New Jersey Courts website for updates on how and when proceedings will take place.

ELECTRICITY, GAS, WATER

Can my utilities, water, phone, and internet be shut off during the COVID-19 crisis?

In general, not until January 1, 2022. Executive Order 229, which suspended residential utility and water shutoffs, ended on June 30, 2021, but in Executive Order 246, the Governor announced a state-ordered “grace period” through December 31, 2021. During this grace period:

  • Utilities are not allowed to shut off gas, water, or electricity.
  • Telecommunications providers are not allowed to shut off residential internet service currently being used by school-aged children for educational purposes.

After the grace period ends on December 31, 2021, a gas, electric, water, internet, or voice service provider must offer to enroll a customer in specified payment plans before shutting off service, and may not shut off service if the customer makes the required payments. Moreover, the end of the grace period will fall during the state’s annual winter utility service shutoff ban, which protects certain vulnerable families from utility shutoffs from November 15 to March 15 each year.

Do I still have to pay for utilities and water?

Yes. You still have to pay whatever electric, gas, water, phone, or internet bills you normally pay. If you cannot pay now, you will have to pay later. Assistance with utility bills is available through the same application process DCA uses to administer rental assistance: https://njdca.onlinepha.com/. In addition, DCA offers low-income tenants assistance with some utility bills through other programs. You can also call the customer service number on your utility bill, or look up the number here, to try to work out a payment plan; or you can check the website of the Board of Public Utilities for a list of agencies that offer assistance.

This document is for informational purposes only, is not intended as legal advice, and does not substitute for consulting with a lawyer about specific facts and circumstances. This document does not constitute a solicitation, and your use of this document does not create any attorney-client relationship between you and Lowenstein Sandler. Low-income homeowners should contact their legal services offices for assistance, as Lowenstein Sandler accepts pro bono matters only through referrals from our legal services partners. The firm does not otherwise represent individual homeowners in residential foreclosure matters.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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