By David Chapman · September 24, 2026 · 6 min read
A Notice of Default is the lender's formal statement that your loan is in default and that foreclosure will follow if the default is not cured. It is frightening to open, and it is also the moment when you still have the most options. Here is what to do in the first two weeks.
1. Read the notice and note every date
In New Jersey the first formal step is the Notice of Intention to Foreclose, required by the Fair Foreclosure Act. It must be sent by certified mail at least 30 days before the lender can file a complaint, and it states how much you are behind, what you must pay to cure, and the deadline. If you receive a court complaint instead, you have 35 days to file an answer. Write down every date. Everything that follows is planned around them.
2. Do not ignore the servicer, but do not negotiate alone
Calling your servicer is fine; agreeing to anything on that call is not. Servicer representatives read from scripts, and a verbal "repayment plan" that you cannot afford will fail within months and leave you worse off. Tell them you are reviewing your options and ask them to send everything in writing.
3. Gather your documents
You will need these for any option, so gather them now:
- The last 12 months of mortgage statements
- Every notice or letter from the lender or servicer
- Two recent pay stubs or proof of income, and last year's tax return
- A simple list of monthly expenses
- Your original loan documents if you have them
4. Understand the four main paths
Almost every foreclosure case resolves through one of these:
- Reinstatement. Pay the arrears and fees in full and the loan continues as before. Fastest if you have the money.
- Loan modification. The lender changes the loan terms so the payment is affordable. Best when you want to keep the home and have income going forward. See loan modification vs. short sale.
- Short sale or deed in lieu. You leave the home on negotiated terms, usually with the remaining balance released.
- Litigation. If the lender made mistakes, those errors can stop or delay the foreclosure and create leverage.
5. Beware of foreclosure rescue offers
Once a default is public record, you will receive letters and calls from companies promising to save your home for an upfront fee, or asking you to sign the deed over "temporarily." Both are red flags. A licensed attorney is accountable to the state bar and can actually file in court on your behalf.
6. Ask for mediation
New Jersey's court-run Foreclosure Mediation Program is free for owner-occupants and must be requested within 60 days of being served with the complaint. It puts a housing counselor and a mediator between you and the lender and is often the fastest way to get a modification reviewed seriously. See our guide to the program.
7. Talk to an attorney early
The single biggest factor in foreclosure outcomes is how early the homeowner acts. Options that exist at the Notice of Default stage disappear once a sale date is set. A free consultation costs nothing and will tell you exactly where you stand.
Attorney Advertising. This article is general information, not legal advice. Laws vary by state and change over time; talk to an attorney about your situation.