Do Anti-Deficiency Laws in New Jersey Cover Second Mortgages?
Full Question:
Answer:
Under New Jersey law, a judgment for deficiency may not be brought in the same action to foreclosure the residential mortgage (a separate action must be brought); this preclusion also includes claims on any personal guarantees. Foreclosure deficiency actions can be brought only once the mortgage is foreclosed; must be brought within three (3) months from the date of the sale and can not be brought against any party who was not a party to the foreclosure action. The deficiency balance sought must be the difference between the foreclosure judgment amount and the fair market value of the property at the time of the sale.
New Jersey’s deficiency statutes do not protect business or commercial loans, one to four family residential dwellings owner occupied at the time the deficiency action is commenced where the mortgage is not the primary security for the debt or where there is a second mortgage lender and the mortgage is subject to a prior lien(s) not held by the same lender.
