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Mortgage Electronic Registration Systems, Inc. v. Han

BER-F-10404-03 (N.J. Super. Ch. Div. 2004) (Unpublished)

FORECLOSURE; ADJOURNMENTS—Equity considerations permit a court to adjourn a foreclosure sale where the mortgagor can show that it would be able to sell the property for a great deal more that what would be received in a forced sale, but a court should not give more time that would be reasonable under the circumstances.

A homeowner, after having exhausted two statutory stays of a sheriff’s foreclosure sale, applied to the Court for a further adjournment. The property was encumbered by $4.3 million in liens. A bona fide contract of sale, since terminated, showed a price of $5.5 million. The homeowner presented appraisals of $5.5 million and $6.2 million. The foreclosing lender argued that the property had a value of between $3.6 million and $4.5 million.

The Court pointed out that “[f]oreclosure is a discretionary remedy.” It cited case law to the effect that: “[t]he court also relies upon general equitable principles which apply to the remedy of foreclosure. Foreclosure is a harsh remedy and equity abhors a forfeiture. A court of equity may invoke its inherent equitable powers to avoid a foreclosure and deny the remedy of foreclosure.” New Jersey statutes gives a court of competent jurisdiction the authority to adjourn Sheriff’s sales “for cause.” Here, the homeowner was asking for time in which to market the property so as to avoid forfeiture of what it claimed to be substantial equity. The Court, relying primarily on the value of the property as set in the terminated contract of sale, granted an adjournment for forty-five days within which time the homeowner would be permitted to execute a contract of sale. It required the homeowner to pay the carrying charges on the mortgage, principal, interest, and taxes at the interest rate set forth in the note, not at the post-judgment interest rate. It warned the homeowner, however, that it was unlikely that it would grant a further adjournment if there was no bona fide contract of sale in place within the forty-five day period.

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