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An Act ¹[providing protection from mortgage foreclosure] establishing relief programs¹ for owners of real property ¹[damaged during “Superstorm Sandy,” which made landfall on October 29, 2012.] which were impacted by “Superstorm Sandy.”¹

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

¹[1. a. The provisions of this section shall apply only to obligations secured by mortgage, trust deed, or other security in the nature of a mortgage upon residential real property damaged as a result of “Superstorm Sandy”, the major storm that made landfall in New Jersey on October 29, 2012.

b. Notwithstanding the provisions of any law, rule or regulation to the contrary, on and after the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), in a proceeding commenced in any court to enforce a mortgage obligation arising out of nonpayment of any sum due under the mortgage, or out of any other breach of the terms of the mortgage occurring upon residential real property damaged as a result of “Superstorm Sandy,” the court may, after a hearing, in its discretion, on its own motion, and shall, except as hereinafter provided in this act, on application to it by the owner of the mortgaged property, unless in the opinion of the court the ability of that person to comply with the terms of the mortgage obligation is not materially affected by any reason relating to “Superstorm Sandy,” as provided in P.L. , c. (C. ) (pending before the Legislature as this bill):

(1) Stay the proceedings; or

(2) Make such other disposition of the case as may be equitable to conserve the interest of all parties.

c. No sale, foreclosure, or seizure of residential real property for nonpayment of any sum due under any mortgage obligation on a real property damaged as a result of “Superstorm Sandy”, or for any other breach of the terms of any such mortgage obligation, whether under a power of sale, under a judgment entered upon warrant of attorney to confess judgment contained therein, or otherwise, shall be valid if made during the 36-month period next following the enactment of P.L. , c. (pending before the Legislature as this bill) unless upon an order of sale previously granted by the court and a return thereto made and approved by the court or unless the court determines that the failure to comply with the terms of the mortgage obligation has not materially affected by any reason relating to “Superstorm Sandy.”

d. Any person who shall knowingly cause to be made any sale, foreclosure, or seizure of residential real property defined as invalid by subsection c. of this section, or attempts so to do, shall be adjudged a disorderly person and shall be punished by imprisonment not to exceed six months, or by fine not to exceed $1,000, or both.]¹

¹1. a. For the purposes of P.L. , c. (pending before the Legislature as this bill):

“Forbearance” means a period of 36 months from the issuance of a certification of eligibility for the forbearance under this section, or no more than 60 days after a certificate of occupancy is issued for the property, if one was not issued on effective date of P.L. , c. (pending before the Legislature as this bill), whichever is sooner, during which the payment of mortgage and interest obligations are suspended.

“Commissioner” means the Commissioner of Community Affairs.

“Department” means the Department of Community Affairs.

“Mortgage” means a mortgage, trust deed, or other security in the nature of a residential mortgage.

"Recovery and rebuilding program" means the use of funding provided by the federal government through the Reconstruction, Rehabilitation, Elevation and Mitigation (RREM) program or the Low-to-Moderate Income (LMI) Homeowner’s Rebuilding Program, which are intended to help individuals rebuild and recover from Superstorm Sandy.

“Residential property” means any residential property damaged by “Superstorm Sandy” and eligible for funding through a recovery and rebuilding program, including, but not limited to, single-family and manufactured homes.

“Superstorm Sandy” means the major storm that made landfall in New Jersey on October 29, 2012.

b. A homeowner eligible, as determined by the commissioner, for the receipt of funds through a recovery and rebuilding program with respect to a residential property secured by a mortgage which was damaged as a result of “Superstorm Sandy” also shall be eligible for a forbearance of mortgage and interest obligations if foreclosure proceedings have not been initiated for failure to pay mortgage obligations as of the effective date of P.L. , c. (pending before the Legislature as this bill). An eligible homeowner shall apply to the commissioner, on forms to be provided by the department, for a certification of eligibility for the forbearance under this section before the first day of the seventh month next following the enactment of P.L. , c. (pending before the Legislature as this bill). The application shall be approved or denied within 30 days of its delivery to the commissioner. If the application is not approved or denied within 30 days of its delivery, the application shall be approved.

c. Notwithstanding the provisions of any law, rule or regulation to the contrary, the repayment period of any mortgage subject to the forbearance established in subsection b. of this section shall be extended by the number of months the forbearance is in effect. During the time of the forbearance and during the period constituting an extension of the mortgage, the interest rate shall be the same rate as agreed upon in the original mortgage, and there shall be no fees assessed for the forbearance, or penalty for early repayment.

d. An owner of residential property damaged as a result of “Superstorm Sandy” who is eligible for the receipt of funds through a recovery and rebuilding program and is the subject of a foreclosure proceeding as of the effective date of P.L. , c. (pending before the Legislature as this bill) shall , upon good cause shown, be awarded, by the court and upon application by the property owner, a stay in the foreclosure proceedings for 36 months from the date the court grants the application, or the first day of the third month next following the issuance of a certificate of occupancy for the residential property, whichever is sooner. An application to the court by a property owner under this section shall be made before the first day of the fifth month next following the effective date of P.L. , c. (pending before the Legislature as this bill).

e. The commissioner shall notify the owner of each residential property which has been determined to be eligible for the receipt of funds under a recovery and rebuilding program of the eligibility for a forbearance or stay of foreclosure proceedings prior to the first day of the second month next following enactment of P.L. , c. (pending before the Legislature as this bill).

f. The State shall reimburse a mortgagee up to 50 percent of 18-months worth of mortgage and interest payments on a residential property if that mortgagee is unable to recover at least that amount, through foreclosure and sale or by mortgage payments, after the end of the forbearance established pursuant this section or a stay of proceedings granted pursuant to this section.

g. Any homeowner awarded a stay of foreclosure proceedings or forbearance under this section shall be responsible for the maintenance of the property during the stay or period of forbearance.

h. A stay of foreclosure proceedings or forbearance awarded under this section shall cease immediately if, after providing the homeowner an opportunity to be heard, a court determines that the subject residential property has been abandoned by the homeowner eho was determined to be eligible for the receipt of funds through a recovery and rebuilding program.

i. Nothing in this section shall be construed as limiting the ability of a mortgagee and residential property owner to participate in a mediation sponsored by the Administrative Offices of the Court in accordance with the requirements of the mediation program. Nothing in this section shall be construed to impact property tax and insurance obligations of a property owner related to any real property in the State.¹

2. This act shall take effect immediately and shall expire ¹[at] on¹ the ¹[end of the 36^th] first day of the 37^th¹ month next following enactment.