What should a lender do if a borrower defaults on a mortgage under New Jersey law?

When a borrower defaults on a mortgage, the lender is required to adhere to the lawful foreclosure process established by New Jersey law. This legal framework ensures that the rights of both parties are protected and that the lender follows a structured approach to recover the owed amount. The foreclosure process typically involves providing the borrower with notice of the default, allowing them an opportunity to remedy the situation, and, if resolution is not achieved, moving forward with the foreclosure proceedings in accordance with state regulations.

This approach emphasizes transparency and legality, ensuring that borrowers have a chance to address their default before the lender can take possession of the property. By following the established foreclosure process, lenders also maintain compliance with legal standards, which can help avoid litigation and potential penalties that result from unlawful practices.

In contrast, reinstating the loan with additional fees may not be a viable option unless both parties agree, refinancing the loan immediately may not be feasible depending on the borrower’s financial situation, and denying the borrower further assistance would not align with the legal obligations and expectations of responsible lending practices in New Jersey.