A deficiency claim is possible in New Jersey but requires a separate lawsuit filed within a strict time limit, is subject to a fair-market-value credit for the home, and in practice many residential deficiencies are never pursued.
The deficiency is the gap between what you owed and what the sale brought. New Jersey law makes pursuing it genuinely burdensome: it needs its own action on the note, brought within three months of the sale (or of its confirmation where confirmation is required), and you are entitled to have the home's fair market value, not just the auction price, credited against the debt. That fair-value defense alone erases many claimed deficiencies.
Ways to take the issue off the table entirely: a short sale or deed in lieu with a written deficiency waiver, a Chapter 7 or 13 bankruptcy discharging the debt, or simply confirming in writing that the lender waives it. If you receive papers for a deficiency action, the fair-market-value credit is your first conversation with an attorney, and the deadline to respond is real.
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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.