Legally you still own the home until a sheriff's deed is delivered, so renting it out is generally possible, but your mortgage documents and New Jersey's strong tenant protections both complicate it.
Most mortgages contain an assignment-of-rents clause letting the lender claim rental income after default, and collecting rent while not paying the mortgage can be raised against you in court. On the other side, any tenant you place acquires real rights: New Jersey law protects tenants through and beyond a foreclosure, so the lease you sign does not simply dissolve at the sheriff sale, which can affect the price an investor buyer will pay and your own flexibility.
Where it can make sense: income that funds a Chapter 13 plan or a reinstatement, on a properly disclosed month-to-month basis, ideally with advice from an attorney. Where it goes wrong: collecting a year of rent in advance from a tenant who will be living in a foreclosure, which courts and the Attorney General treat harshly. If the plan is to sell, an empty house sells faster and for more than a tenanted one.
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Educational information, not legal advice. Your own court documents control your deadlines; a licensed New Jersey attorney can confirm what applies to your case.