On October 16, 2008, as part of a larger economic recovery package, Governor Corzine announced that mediation would now be mandatory in certain foreclosure proceedings. The new mandatory foreclosure program is part of a statewide effort, which includes the Save New Jersey Homes Act of 2008, to attempt to reduce the number of foreclosures in New Jersey, which has skyrocketed 46 percent in the previous 12 months; September 2008 alone saw a 285% increase from September 2006.On October 16, 2008, as part of a larger economic recovery package, Governor Corzine announced that mediation would now be mandatory in certain foreclosure proceedings. The new mandatory foreclosure program is part of a statewide effort, which includes the Save New Jersey Homes Act of 2008, to attempt to reduce the number of foreclosures in New Jersey, which has skyrocketed 46 percent in the previous 12 months; September 2008 alone saw a 285% increase from September 2006.
The new program will be an expansion of the pilot program already in place in Middlesex County. Under the pilot program in Middlesex county, volunteers from the Middlesex County Bar Association are providing free mediation services for homeowners facing foreclosure. The Judiciary will expand the Middlesex program throughout the state, rolling it into Essex, Union, Ocean, Camden, Bergen and Hudson counties (the counties with the most foreclosures) by the middle of November, and completing the roll-out to the remaining counties by the middle of December.
Under the program, mediation will be required in all cases where homeowners contest owner-occupied foreclosure actions. In uncontested foreclosure cases (i.e., where the homeowner has failed to respond to a foreclosure complaint), courts will notify the unresponsive homeowner of the mediation process and encourage participating. Even after a default judgment is entered, mediation will remain an option for homeowners at any time before a sheriff's sale.
New Jersey Supreme Court Chief Justice Stuart Rabner is encouraged by the program and hopeful that it will lead to mutually beneficial arrangements for borrowers and lenders, while pointing out that the courts must and will remain neutral in all foreclosure matters. Middlesex Vicinage Assignment Judge Travis L. Francis, an early force behind the Middlesex program, added that the "[t]he worst thing a homeowner facing foreclosure can do is nothing."
