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New Jersey S2545/A3793: Concerns Expedited Process for Foreclosing Vacant and Abandoned Residential Properties in Uncontested Actions

On June 8, NJ S2545/A3793 had a second reading and is under consideration in the State House.  If enacted, the bill would amend P.L.2012, c.70 (Senate Bill 2156).

New Jersey Senate Bill 2545, originally introduced October 27, 2014, and subsequently substituted by Senate Committee on June 8, 2015, proposes an expedited process for foreclosing vacant and abandoned residential properties in uncontested actions.

It amends P.L.2012, c.70 (Senate Bill 2156).  P.L.2012, c.70 authorizes lenders to bring summary actions to foreclose mortgages on vacant and abandoned residential properties, and grants state courts the authority to enter a final residential mortgage foreclosure judgment if it finds, by clear and convincing evidence, that the residential property is “vacant and abandoned,” proper summary judgment procedures are followed, and no answer, written objection, or appearance asserting a defense or proper cause would preclude a judgment.  See “Summary NJ SB 2156” for further explanation of P.L.2012, c.70 (Senate Bill 2156).

New Jersey Senate Bill 2545 modifies New Jersey law (P.L.2012, c.70) as follows:

  • It adds another condition that may be used to help indicate that the mortgaged real estate is “vacant and abandoned”: certification from the board of a planned real estate development in which the residential property is located, as defined under section 1 of P.L.1990, c.55 (C.2A:42-103), stating with specificity that the property has been observed to be abandoned.
  • It requires that the residential mortgage lender’s action to foreclose be uncontested.  As defined pursuant to R.4:64-1(c) of the Rules Governing the Courts of the State of New Jersey, an action is uncontested if, as to all defendants:
  1. a default has been entered as the result of failure to plead or otherwise defend; or
  2. none of the pleadings responsive to the complaint either contest the validity or priority of the mortgage or lien being foreclosed or create an issue with respect to plaintiff’s right to foreclose it; or
  3. all the contesting pleadings have been stricken or otherwise rendered noncontesting.
  • It requires that the mortgagor, or any other defendant, include an affidavit when filing an answer, written objection, or appearance asserting a defense or proper cause to preclude a judgment  stating that the defense is not made solely for the purpose of delaying the relief requested pursuant to the summary action.  Also, the defense or objection must be presented within 30 days of the filing of the service of the application to proceed summarily.
  • It requires that the lender pay a $1,000 fee for the expedited process.
  • It adds two entirely new sections:
  1. The first section allows the board of the planned real estate development to take action when a lender is entitled to pursue a summary action but fails to do so and the mortgage lien of the lender is superior to the lien of a planned real estate development.  The board may file a motion to compel expedited judgment and sale, or in the alternative, payment of association fees outstanding, along with ongoing fees, until occupied by a new resident.  If filed and served correctly, then the Superior Court shall (1) compel the lender to either file within 30 days or pay association expenses; or (2) approve an application for an Order Appointing a Fiscal Agent.
  2. The second section allows the board to apply to the Superior Court of New Jersey for an Order Appointing a Fiscal Agent over an abandoned or unoccupied unit.  The fiscal agent shall be authorized to:  (1) manage the unit; (2) license the use of the unit; (3) keep the unit insured against loss, damage by fire, or public liability; (4) repair and otherwise do anything necessary for the care and management of the unit; (5) demand, collect and receive from any licensee of the unit or any portion of the unit, or any person liable for the unit, any payment due from any licensee of the unit; (6) institute all legal proceedings necessary for the protection of the unit, or to recover possession of the unit or any part of the unit, and to institute actions for the collection of payments due, and to institute summary proceedings for the removal of any licensee; and (7) retain legal counsel to render legal advice and to provide legal services as may be necessary in the performance of its duties.  Neither the title owner of a unit, nor its agent, employee, heir or devisee shall be entitled to receive or collect any payment due pursuant to any license agreement issued by the fiscal agent.

Please click here to view the full text of NJ S2545/A3793 online.

Please click here to view a summary of NJ SB 2156 [pdf].

About Safeguard 
Safeguard Properties is the mortgage field services industry leader, preserving vacant and foreclosed properties across the U.S., Puerto Rico, Virgin Islands and Guam. Founded in 1990 by Robert Klein and headquartered in Cleveland, Ohio, Safeguard provides the highest quality service to our clients by leveraging innovative technologies and proactively developing industry best practices and quality control procedures. Consistent with Safeguard’s values and mission, we are an active supporter of hundreds of charitable efforts across the country. Annually, Safeguard gives back to communities in partnership with our employees, vendors and clients. We also are dedicated to working with community leaders and officials to eliminate blight and stabilize neighborhoods. Safeguard is dedicated to preserving today and protecting tomorrow.  Website: www.safeguardproperties.com.

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CEO

Alan Jaffa

Alan Jaffa is the Chief Executive Officer for Safeguard Properties, steering the company as the mortgage field services industry leader. He also serves on the board of advisors for SCG Partners, a middle-market private equity fund focused on diversifying and expanding Safeguard Properties’ business model into complimentary markets.

Alan joined Safeguard in 1995, learning the business from the ground up. He was promoted to Chief Operating Officer in 2002, and was named CEO in May 2010. His hands-on experience has given him unique insights as a leader to innovate, improve and strengthen Safeguard’s processes to assure that the company adheres to the highest standards of quality and customer service.

Under Alan’s leadership, Safeguard has grown significantly with strategies that have included new and expanded services, technology investments that deliver higher quality and greater efficiency to clients, and strategic acquisitions. He takes a team approach to process improvement, involving staff at all levels of the organization to address issues, brainstorm solutions, and identify new and better ways to serve clients.

In 2008, Alan was recognized by Crain’s Cleveland Business in its annual “40-Under-40” profile of young leaders. He also was named a NEO Ernst & Young Entrepreneur Of The Year® Award finalist in 2013.

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Esq., General Counsel and EVP

Linda Erkkila

Linda Erkkila is the General Counsel and Executive Vice President for Safeguard Properties, with oversight of legal, human resources, training, and compliance. Linda’s broad scope of oversight covers regulatory issues that impact Safeguard’s operations, risk mitigation, strategic planning, human resources and training initiatives, compliance, insurance, litigation and claims management, and counsel related to mergers, acquisition and joint ventures.

Linda assures that Safeguard’s strategic initiatives align with its resources, leverage opportunities across the company, and contemplate compliance mandates. She has practiced law for 25 years and her experience, both as outside and in-house counsel, covers a wide range of corporate matters, including regulatory disclosure, corporate governance compliance, risk assessment, compensation and benefits, litigation management, and mergers and acquisitions.

Linda earned her JD at Cleveland-Marshall College of Law. She holds a degree in economics from Miami University and an MBA. Linda was previously named as both a “Woman of Influence” by HousingWire and as a “Leading Lady” by MReport.

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COO

Michael Greenbaum

Michael Greenbaum is the Chief Operating Officer of Safeguard Properties, where he has played a pivotal role since joining the company in July 2010. Initially brought on as Vice President of REO, Mike’s exceptional leadership and strategic vision quickly propelled him to Vice President of Operations in 2013, and ultimately to COO in 2015. Over his 14-year tenure at Safeguard, Mike has been instrumental in driving change and fostering innovation within the Property Preservation sector, consistently delivering excellence and becoming a trusted partner to clients and investors.

A distinguished graduate of the United States Military Academy at West Point, Mike earned a degree in Quantitative Economics. Following his graduation, he served in the U.S. Army’s Ordnance Branch, where he specialized in supply chain management. Before his tenure at Safeguard, Mike honed his expertise by managing global supply chains for 13 years, leveraging his military and civilian experience to lead with precision and efficacy.

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CFO

Joe Iafigliola

Joe Iafigliola is the Chief Financial Officer for Safeguard Properties. Joe is responsible for the Control, Quality Assurance, Business Development, Marketing, Accounting, and Information Security departments. At the core of his responsibilities is the drive to ensure that Safeguard’s focus remains rooted in Customer Service = Resolution. Through his executive leadership role, he actively supports SGPNOW.com, an on-demand service geared towards real estate and property management professionals as well as individual home owners in need of inspection and property preservation services. Joe is also an integral force behind Compliance Connections, a branch of Safeguard Properties that allows code enforcement professionals to report violations at properties that can then be addressed by the Safeguard vendor network. Compliance Connections also researches and shares vacant property ordinance information with Safeguard clients.

Joe has an MBA from The Weatherhead School of Management at Case Western Reserve University, is a Certified Management Accountant (CMA), and holds a bachelor’s degree from The Ohio State University’s Honors Accounting program.

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Business Development

Carrie Tackett

Business Development Safeguard Properties