New Jersey — Financing & Foreclosure — New Jersey Real Estate — State Law Practice Test
12 questions in this topic · 12 drawn at random this round
A residential first mortgage on NJ real estate generally has what lien priority relative to later-recorded liens?
Session Progress
This New Jersey Real Estate — State Law New Jersey — Financing & Foreclosure practice set has 12 practice questions based on the official exam materials, each with an instant explanation.
Sample questions
Three questions from the New Jersey — Financing & Foreclosure bank with the correct answer and an explanation. The practice quiz above draws 12 questions at random from the same bank.
New Jersey is a lien-theory state. What does that mean for a mortgage on NJ real estate?
- The borrower keeps legal title; the lender holds only a lien as security — Correct answer
- The lender takes legal title until the loan is repaid
- A neutral trustee holds title for the lender
- Title is held by the county until payoff
Explanation: In a lien-theory state the borrower (mortgagor) KEEPS legal title and the lender (mortgagee) holds a LIEN as security; the lender does not get title and must foreclose to enforce the debt. Lien theory（留置权理论）: borrower keeps title, lender holds only a lien. Source: NJ mortgage law.
Handbook: New Jersey Financing — lien theory (borrower keeps title)
How is a residential mortgage foreclosed in New Jersey?
- By judicial foreclosure — a lawsuit in the Superior Court, Chancery Division, ending in a sheriff's sale — Correct answer
- By a non-judicial power-of-sale through a trustee
- By the lender simply repossessing without court action
- By the NJ Real Estate Commission ordering a sale
Explanation: NJ uses JUDICIAL foreclosure: the lender sues in the Superior Court, Chancery Division, and the property is sold at a sheriff's sale under a court judgment. NJ has no non-judicial power-of-sale for residential mortgages. Judicial foreclosure（司法止赎）: court-supervised foreclosure via the Chancery Division. Source: NJ Fair Foreclosure Act, N.J.S.A. §2A:50-53 et seq.
Handbook: New Jersey Financing — judicial foreclosure via Chancery Division (Fair Foreclosure Act)
Before filing a residential foreclosure, NJ's Fair Foreclosure Act generally requires the lender to send the borrower:
- A Notice of Intention to Foreclose (≥30 days), with the borrower's right to cure/reinstate — Correct answer
- A deed transferring the home to the lender immediately
- Nothing — NJ allows surprise foreclosure
- A federal eviction order
Explanation: The Fair Foreclosure Act requires a Notice of Intention to Foreclose at least 30 days before filing, telling the borrower the default, how to cure, and the right to reinstate. The borrower has a right to CURE (reinstate) by paying the arrears + costs up to a statutory point. Notice of Intention（止赎意向通知）: a required pre-foreclosure notice with a cure opportunity. Source: N.J.S.A. §2A:50-56.
Handbook: New Jersey Financing — Notice of Intention to Foreclose + right to cure (N.J.S.A. §2A:50-56)