Sponsored by:
Assemblyman KENYATTA STEWART
District 35 (Bergen and Passaic)
SYNOPSIS
Permits mortgage forbearance of 180 days for borrowers whose primary residence is in State-declared disaster area.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning mortgage forbearance in State-declared disaster areas and supplementing Title 46 of the Revised Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. As used in this act:
“Borrower” means a natural person obligated to repay a loan secured by a residential mortgage.
“Mortgage forbearance" means a temporary agreement between a borrower and the borrower’s residential mortgage lender to pause residential mortgage payments.
“Residential mortgage” means a mortgage, security interest, or similar, in which the security is a residential property of no more than four dwelling units that is occupied, or is to be occupied, by a borrower as a primary residence.
“Residential mortgage lender" means any person, corporation, or other entity licensed pursuant to the “New Jersey Residential Mortgage Lending Act,” P.L.2009, c.53 (C.17:11C-51 et seq.), which makes or holds a residential mortgage, and any person, corporation or other entity to which the residential mortgage is assigned.
2. a. A borrower shall receive a mortgage forbearance on the borrower’s primary residence if:
(1) the residence is located in an area of the State that is proclaimed by the Governor to be a disaster area within the meaning of applicable State law; and
(2) the borrower submits a request, in a form and manner as determined by the Commissioner of Banking and Insurance, to the borrower’s residential mortgage lender for a mortgage forbearance during the period in which a disaster area is proclaimed pursuant to paragraph (1) of this subsection.
b. The lender shall approve the request made pursuant to paragraph (2) of subsection a. of this section within 15 business days.
c. (1) Upon approval, the mortgage forbearance established pursuant to subsection a. of this section shall be for a period of 180 days, with an option for the borrower to extend the forbearance for an additional period of 180 days.
(2) No penalties, fees, or interest shall accrue on the residential mortgage during the period of forbearance established pursuant to this subsection.
3. a. A borrower shall repay the residential mortgage payments that were subject to forbearance pursuant to section 2 of this act.
b. Repayments pursuant to subsection a. of this section shall be made to the lender and shall be structured through:
(1) an extension of the borrower’s residential mortgage loan;
(2) a modification of the borrower’s residential mortgage loan; or
(3) a payment deferral that shall be due at the end of the residential mortgage loan term.
4. The Commissioner of Banking and Insurance shall adopt, pursuant to the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.), rules and regulations as is necessary to implement the provisions of this act.
5. This act shall take effect on the 90th day next following enactment and shall apply to residential mortgages secured on or after the date of enactment
STATEMENT
This bill permits a mortgage forbearance of 180 days for borrowers whose primary residence is in a State-declared disaster area.
Under the bill, a borrower is to receive a mortgage forbearance on the borrower’s primary residence if:
(1) the residence is located in an area of the State that is proclaimed by the Governor to be a disaster area; and
(2) the borrower submits a request to the borrower’s residential mortgage lender for a mortgage forbearance during the period in which a disaster area is proclaimed.
A request submitted for a mortgage forbearance under this bill, that is submitted by the borrower to the lender, will be approved within 15 business days.
Upon approval, the mortgage forbearance established pursuant to this bill will be for a period of 180 days, with an option for the borrower to extend the forbearance for an additional period of 180 days. No penalties, fees, or interest will accrue on the residential mortgage during the period of forbearance.
Finally, pursuant to the bill, the borrower will be required to repay residential mortgage payments that were forborne under the bill to the lender. The repayments must be structured through:
(1) an extension of the borrower’s residential mortgage loan;
(2) a modification of the borrower’s residential mortgage loan; or
(3) a payment deferral that shall be due at the end of the residential mortgage loan term.