Alert November 27, 2012

New Jersey Appellate Court Rejects Borrowers’ Delayed Foreclosure Challenge

Another New Jersey court has rejected a claim to vacate a final judgment of foreclosure where mortgagors delayed in asserting a defense to the foreclosure. Here, the mortgagors argued that the mortgagee lacked standing to bring a foreclosure action on the ground that an assignment of mortgage was not signed and recorded until 7 months after the foreclosure complaint was filed.

The Court determined that in the post-judgment context, the mortgagors’ delay of several years prior to asserting the defense precluded lack of standing from being a meritorious defense to the foreclosure complaint. The Court also noted that lack of standing would not render a judgment void because, in New Jersey, standing is not an element of jurisdiction. As a result, the Court affirmed the lower court’s holding that the mortgagors did not file their motion within a reasonable time after the final judgment of foreclosure. This ruling is one of many New Jersey court rulings demonstrating an unwillingness to allow borrowers to sit on their rights during foreclosure proceedings (see October 16, 2012 Alert).