Legal Question in Real Estate Law in New Jersey

A mortgage is a contract. As such, it is a voluntary agreement between the parties. If the security for the loan was both of the properties, there can be two mortgages or, better as a matter of legal drafting, a single instrument representing two mortgages. If the loan was not accompanied by a mortgage document, the lender can do nothing by way of encumbering any property so long as the loan is not in default. That is to say that a lender cannot "put a mortgage on" any property without the prior consent of the borrower. If there is a default and the lender sues and obtains a judgment on the original loan note, the lender can then collect by any lawful means. If the judgment is a NJ judgment or docketed in NJ, it is possible for the judgment creditor to obtain a lien on all real property of the debtor within the State until the judgment has been satisfied. A lien is not a mortgage and cannot be foreclosed on in the same way as a mortgage.

See also: http://info.corbettlaw.net/lawguru.htm

No, a creditor cannot unilaterally place a mortgage on the property of of debtor. However, if the creditor obtains a judgment against the debtor through a lawsuit, then the creditor can docket the judgment and it becomes a lien on the property. It would be prudent to retain legal counsel when entering a significant transaction such as the one you mentioned.

�For every problem there is a solution that is simple, neat and wrong.� H.L. Mencken. Kindly note and remember that my response is merely a general comment on the law related to your question, and NOT legal advice or opinion. Also, your question and my response does NOT create an attorney-client relationship between us. You cannot rely upon what I have written, because I do not have all of the information that I need to advise you or render an opinion. Even simple facts you have not shared can completely change my answer. For me to give you legal advice or opinion, you would need to hire me to be your lawyer, and then we would need to discuss this in detail and go over the documents.

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I agree with the other authors that unless appropriate mortgage documents were signed by you as part of the loan transaction,a lender cannot unilaterally place a mortgage on the property.