Foreclosure Reinstatement Rights in New Jersey: A Homeowner’s Guide
In New Jersey, “Reinstatement” is your legal right to stop a foreclosure by catching up on missed payments. It is often the fastest way to save your home—but there is a strict “Point of No Return.”
Facing foreclosure is a race against time. One of the most powerful tools in a homeowner’s arsenal is the legal right to **reinstate** the mortgage. Under the New Jersey Fair Foreclosure Act, homeowners have the right to cure their default and “de-accelerate” the loan. This effectively puts the mortgage back in good standing as if the foreclosure never happened. To do this, you must pay the total amount of arrears, including missed principal, interest, late fees, and the bank’s legal costs.
At Friscia & Associates, we help clients determine the exact “cure amount” and coordinate with lenders to ensure the foreclosure process is halted immediately upon payment.
The Legal Deadline for Reinstatement
The right to reinstate is not indefinite. In New Jersey, you have the absolute right to reinstate your mortgage at any time up until the Entry of Final Judgment. Once a judge signs the Final Judgment, your right to cure the default by paying only the arrears typically expires, and the bank can demand the full payoff of the entire loan balance to stop the sale.
Because the bank’s goal is to reach Final Judgment as quickly as possible, early intervention is critical. If you are served with a Summons and Complaint, you must act fast to protect your ability to reinstate. Learn more about why hiring a foreclosure attorney early is essential to managing these deadlines.
Notice Requirements: The 14-Day Rule
The law requires lenders to be transparent about your right to cure. At least **14 days before** applying for a Final Judgment, the lender must send you a written notice via certified and regular mail. This notice must detail:
- The exact amount needed to cure the default.
- Where and to whom the payment must be sent.
- A deadline by which the payment must be received to stop the judgment.
The “Good Faith” Extension: If you receive this notice and believe you can raise the funds, you can provide the lender with a written notice within 10 days stating that you have a “reasonable likelihood” of paying the cure amount within 45 days. If you do this, the lender is legally barred from seeking Final Judgment during that 45-day window.
Reinstatement vs. Redemption (Payoff)
It is important to distinguish between these two terms, as they are often confused:
- Reinstatement: Paying only the “back pay” (arrears) to bring the loan current. This is only available before Final Judgment.
- Redemption: Paying the *entire* remaining mortgage balance (e.g., $300,000) plus all costs. You have the right to “redeem” the property up until 10 days after a Sheriff Sale has occurred.
Restrictions on Reinstatement Rights
While the right to reinstate is a powerful protection, the law prevents homeowners from abusing it. In New Jersey, you can only exercise this statutory right to cure a default once every 18 months. If you reinstate your loan today and fall behind again next month, the lender may not be required to let you reinstate a second time until that 18-month window has passed.
Using Chapter 13 Bankruptcy to Force Reinstatement
What happens if you have the money to reinstate, but the lender has already obtained a Final Judgment and refuses to accept anything less than a full payoff? Or what if you can’t pay the arrears in one lump sum?
In these cases, filing for Chapter 13 Bankruptcy becomes the primary solution. Chapter 13 allows you to “reinstate” the mortgage by catching up on the arrears over a 3-to-5-year repayment plan. Federal law allows you to do this even after a Final Judgment has been entered, as long as the Sheriff Sale hasn’t been finalized.
Protect Your Home and Your Rights
Don’t let a lender’s aggressive timeline pressure you into losing your home. At Friscia & Associates, we review your loan history to ensure the lender’s reinstatement figures are accurate and that you are given the full protection of the New Jersey Fair Foreclosure Act.
Stop the foreclosure clock today.
Call us at (973) 500-8024 or (212) 960-8308.
Related Foreclosure Resources
- Foreclosure Defense Services Overview
- How Does the Foreclosure Process Work in NJ?
- Will a Loan Modification Stop Foreclosure?
- Does Filing Bankruptcy Stop Foreclosure?
- What Is a Sheriff’s Sale?
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