S4768

An Act establishing a portable mortgage pilot program and supplementing P.L.1983, c.530 (C.55:14K-1 et seq.), and making an appropriation.

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

1. This act shall be known and may be cited as “The New Jersey Homeownership Mobility Act.”

2. a. As used in this section:

“Agency” means the New Jersey Housing and Mortgage Finance Agency.

“Executive Director” means the Executive Director of the New Jersey Housing and Mortgage Finance Agency.

“Eligible property” means a residential property located in the State that serves as a borrower’s primary residence and remains owner-occupied during the mortgage term.

“Participating lender” means a bank, credit union, mortgage company, other financial institution that has agreed to offer and administer mortgages under the program.

“Portable mortgage” means a residential mortgage loan originated or financed through the agency or a participating lender that is transferred by a borrower from a previously financed residence to an eligible property.

“Pilot program” means the New Jersey Portable Mortgage Pilot Program established pursuant to subsection b. of this section.

b. There is established in the agency the New Jersey Portable Mortgage Pilot Program, for homeowners who apply to the pilot program pursuant to subsection c. of this section. The purpose of the pilot program is to allow homeowners who own an eligible property to transfer existing mortgages and interest rates to a different eligible property to promote the efficient use of housing inventory in the State. The eligible property that the portable mortgage is transferred to shall be of equal or greater value than the outstanding mortgage balance on the prior eligible property.

c. Notwithstanding the provisions of any law, rule, or regulation to the contrary, the agency may authorize the portability of a residential mortgage loan issued, guaranteed, or administered by the agency or a participating lender and permit a homeowner to transfer all or a portion of an existing mortgage, including the original interest rate and remaining loan term, to an eligible property, subject to approval by the agency or participating lender and other applicable underwriting requirements. The agency may enter into agreements with participating lenders for the purposes of administering the program. The agency shall establish an Internet website to facilitate pilot program applications by homeowners. In considering an application by a homeowner, the agency shall require a homeowner provide documentation of proof of income, a credit report and history, a current mortgage statement, and other information determined necessary to effectuate the pilot program.

d. If the purchase price of an eligible property exceeds the outstanding balance of the portable mortgage, a homeowner may seek, at a competitive rate, supplemental financing through the agency, a participating lender, or other financing sources approved by the agency.

e. The Executive Director shall, within one year following the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), and annually thereafter, submit a report detailing the number of applications received, the number of individuals served, pilot program expenditures, the impact of the pilot program on housing inventory in the State, the feasibility of expanding the pilot program and integrating qualifying loans into the federal secondary mortgage market and any other information determined by the agency to be relevant to the costs and benefits of the pilot program to the Governor and, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), to the Legislature. In the annual report, the agency may request that the Legislature make appropriations to the fund established pursuant to subsection f. of this section to be available to the agency for the purposes of the fund.

f. There is established in the agency a fund to be known as the “New Jersey Portable Mortgage Fund” for the purpose of providing the moneys necessary to administer the pilot program.

h. The Executive Director of the New Jersey Housing and Mortgage Finance Agency, in collaboration with the New Jersey Department of Banking and Insurance, shall, in accordance with the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.), adopt rules and regulations as necessary to effectuate the provisions of P.L. , c. (C. ) (pending before the Legislature as this bill), including, but not limited to, uniform standards and eligibility criteria for homeowners and application processes to obtain portable mortgage approval.

3. There is appropriated from the General Fund to the “New Jersey Portable Mortgage Fund,” established pursuant to subsection f. of section of 2 of P.L. , c. (C. ) (pending before the Legislature as this bill), $30,000,000 to administer the New Jersey Portable Mortgage Pilot Program and to effectuate the purposes of P.L. , c. (C. ) (pending before the Legislature as this bill).

4. This act shall take effect immediately.

STATEMENT

This bill creates the New Jersey Portable Mortgage Pilot Program (pilot program) in the New Jersey Housing and Mortgage Finance Agency (agency).

The bill permits the agency to authorize the portability of a residential mortgage loan issued, guaranteed, or administered by the agency or a participating lender and permit a homeowner to transfer all or a portion of an existing mortgage, including the original interest rate and remaining loan term, to an eligible property, subject to approval by the agency or participating lender and other applicable underwriting requirements. The agency is permitted to enter into agreements with participating lenders for the purposes of administering the pilot program. The agency is to establish an Internet website to facilitate pilot program applications by homeowners. In considering an application to the pilot program, a homeowner is required to provide documentation of proof of income, credit report and history, a current mortgage statement, and other information determined necessary to effectuate the pilot program.

The bill permits a homeowner to seek supplemental financing, at a competitive rate, if the purchase price of an eligible property exceeds the outstanding balance of the portable mortgage, through the agency, a participating lender, or other financing sources approved by the agency

The bill directs the Executive Director of the agency to submit an annual report to the Governor and the Legislature the number of applications received, the number of individuals served, pilot program expenditures, the impact of the pilot program on housing inventory in the State, the feasibility of expanding the pilot program and integrating qualifying loans into the federal secondary mortgage market and any other information determined by the agency to be relevant to the costs and benefits of the pilot program.

The bill appropriates $30 million from the General Fund to “New Jersey Portable Mortgage Fund,” established pursuant to the bill to effectuate the pilot program.

The bill requires the Executive Director, in collaboration with the New Jersey Department of Banking and Insurance, to adopt rules and regulations necessary to effectuate the bill including, but not limited to, uniform standards and eligibility criteria for homeowners and application processes to obtain portable mortgage approval.