Saving Your Home After a Sheriff’s Sale

Contrary to popular belief, a sheriff’s sale of your home is not the end of the road for you to retain ownership of your real estate. There are a few techniques you can use in saving your home after a sheriff’s sale.

NJ Right of Redemption Foreclosure Law

Under the New Jersey Rules of Court, a homeowner has a right of redemption during the ten (10) day period after the sheriff’s sale. This right of redemption requires you to pay the full amount due on the foreclosure judgment, plus the costs of sale before the ten (10) day period expires.

You also have the option to file, with the court, written objections to the sheriff’s sale during this ten (10) day period or any time thereafter before the delivery of the deed to the property to the new purchaser.

You must have a valid ground for objection which include fraud, accident, surprise or an irregularity in the sheriff’s sale (e.g. the property was sold for much less than fair market value).

If you file a bankruptcy petition within the ten (10) day redemption period mentioned above, the Bankruptcy Code provides you with an additional sixty (60) days from the date the petition was filed to cure the default of the mortgage on your property.

Reopening a Foreclosure/Sale and Redeeming Your Property

Also, if, after the sheriff’s sale, a mortgage creditor obtains a deficiency judgment against you for payment of the difference between what was owed on the mortgage and what the home was sold for at sheriff’s sale, the foreclosure and sale of the premises is reopened.

This reopening permits you to redeem the property by filing an application for redemption with the court within six months after the entry of the deficiency judgment against you.

To redeem the property during this time period, you must pay the full amount due in the foreclosure judgment, with interest from the date of the judgment, all costs of the action for the deficiency judgment and all reasonable expenses of the purchaser, including taxes, assessments, any prior liens, necessary repairs and interest on the same.

Surplus Equity Rights After a Sheriff’s Sale

In addition to redemption rights, homeowners may also have a claim to surplus equity following a sheriff’s sale. Under the recent Supreme Court decision in Tyler vs. Hennepin County, when a foreclosing entity retains proceeds that exceed the amount owed on the debt, fees, and costs, the excess equity may belong to the homeowner. Though this decision was made in the context of a tax-related foreclosure, the outcome of this case has called into question the handling of surplus equity rights in general foreclosure proceedings. As such, homeowners who have undergone a foreclosure sale may have a potential right to equity, depending on the case circumstances and in accordance with New Jersey law.

To discuss these options to save your home, please schedule a free consultation with one of our experienced Real Estate attorneys at Gruber, Colabella, Thompson, Hiben & Montella.