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Fleet Real Estate Funding Corp v. Turner

A-403-96T1 (N.J. Super. App. Div. 1997) (Unpublished)

FORECLOSURE—A lender finds out what it should have done to recover costs incurred between obtaining the foreclosure judgment and the sheriff’s sale.

A first mortgagee appealed an order denying its claim to surplus funds generated from a sheriff’s sale. The mortgagee expended money for property taxes and insurance costs incurred after entry of a judgment of foreclosure but prior to the sheriff’s sale. The mortgagee sought a court order that it was entitled to reimbursement of these expenses. The Appellate Division affirmed the dismissal of the mortgagee’s claim on the rationale that a mortgage merges into the judgment of foreclosure, and that a first mortgagee may not recoup expenses paid after a judgment of foreclosure unless that judgment is amended prior to the sheriff’s sale. To avoid this problem in the future, the Court suggested that a provision be inserted into an original judgment of foreclosure to the effect that expenses continue to be incurred and that the foreclosing mortgagee reserves the right to seek reimbursement from any surplus which might be generated from the sale of the property. However, this suggestion did not affect the mortgagee’s appeal, and, since there was no amended judgment, the Court found no basis for overturning the order.


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