Bill Text: NJ S1431 | 2024-2025 | Regular Session | Introduced
Bill Title: Establishes foreclosure protection and mortgage relief for certain homeowners impacted by the remnants of Hurricane Ida.
Spectrum: Partisan Bill (Democrat 5-0)
Status: (Failed) 2024-02-12 - Withdrawn from Consideration [S1431 Detail]
Download: New_Jersey-2024-S1431-Introduced.html
STATE OF NEW JERSEY
221st LEGISLATURE
PRE-FILED FOR INTRODUCTION IN THE 2024 SESSION
Sponsored by:
Senator TROY SINGLETON
District 7 (Burlington)
Senator ANDREW ZWICKER
District 16 (Hunterdon, Mercer, Middlesex and Somerset)
Co-Sponsored by:
Senators Gopal, Stack and Johnson
SYNOPSIS
Establishes foreclosure protection and mortgage relief for certain homeowners impacted by the remnants of Hurricane Ida.
CURRENT VERSION OF TEXT
Introduced Pending Technical Review by Legislative Counsel.
An Act concerning foreclosure protection and mortgage relief in response to the remnants of Hurricane Ida and supplementing Title 52 of the Revised Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. The Legislature finds and declares that:
a. Hurricane Ida, which initially approached the Gulf Coast as a category 4 hurricane, caused severe damage to a large area of the south and northeast regions of the country;
b. When the remnants of this hurricane reached New Jersey, this storm resulted in the deaths of at least 29 people, severe flooding in most counties of the State, and the approval of thousands of households for disaster assistance from the Federal Emergency Management Agency;
c. Thousands of New Jersey families have been displaced and unable to return to their homes as a result of the remnants of Hurricane Ida; and
d. It is imperative for the Legislature to offer certain homeowners impacted by the remnants of Hurricane Ida temporary protections against foreclosure, and require mortgage servicers to provide certain storm-impacted homeowners a temporary pause in their mortgage payment obligations.
2. As used in P.L. , c. (C. ) (pending before the Legislature as this bill):
"Federal disaster assistance" means federal assistance provided in response to the remnants of Hurricane Ida, including, but not limited to, mitigation, buy-out grants, or other aid from the Federal Emergency Management Agency, payments from the National Flood Insurance Program, or Community Development Block Grant--Disaster Recovery funding administered by the State.
"Mortgage forbearance" or "forbearance" means a period during which obligations for mortgage principal and interest payments are suspended.
"Mortgage servicer" means the same as that term is defined in section 2 of P.L.2019, c.65 (C.17:16F-28).
"Remnants of Hurricane Ida" means the major storm that caused flooding in New Jersey on September 1 through 3 of 2021, for which notice of a Presidential declaration of a major disaster for New Jersey was issued on September 5, 2021.
"Storm-impacted homeowner" means a mortgagor of title of a residential property who, as of August 31, 2021, occupied the property as the mortgagor's primary residence, and who obtained federal disaster assistance for disaster-related needs as a result of damage sustained to the home due to the remnants of Hurricane Ida.
3. a. A mortgage servicer shall grant a mortgage forbearance to a storm-impacted homeowner if the storm-impacted homeowner submits a written request to the mortgage servicer, prior to the first day of the sixth month next following enactment of P.L. , c. (C. ) (pending before the Legislature as this bill), affirming the following:
(1) the storm-impacted homeowner has suffered a negative financial impact resulting from damage to the homeowner's primary residence due to the remnants of Hurricane Ida, and has obtained federal disaster assistance as a result;
(2) the gross household income of the storm-impacted homeowner, for 2022, does not exceed 150 percent of the most recent area median income by zip code, as defined for New Jersey in guidelines published annually by the United States Department of Housing and Urban Development, unless this requirement for eligibility is waived by the mortgage lender; and
(3) if the storm-impacted homeowner possesses one or more bank accounts, those bank accounts collectively contain less than six months' reserves of the storm-impacted homeowner's gross household income for 2021. The mortgage servicer may require the storm-impacted homeowner to provide a cash asset certification to demonstrate compliance with this paragraph.
b. Upon receipt of a written request or verbal authorization for a mortgage forbearance from a storm-impacted homeowner pursuant to subsection a. of this section, a mortgage servicer shall provide to the storm-impacted homeowner a mortgage forbearance and confirmation of that forbearance in writing. No additional documentation shall be required from the storm-impacted homeowner by the mortgage servicer other than the written request under subsection a. of this section. The minimum initial mortgage forbearance period of a storm-impacted homeowner shall be one year. A storm-impacted homeowner may request, and shall be granted, a subsequent forbearance period of at minimum 180 days, for a total of at minimum 545 days. A mortgage servicer may offer a more extended forbearance period. Fees, penalties, or interest, including attorney's fees beyond the amounts scheduled and calculated as if the storm-impacted homeowner made all contractual payments on time and in full under the terms of the mortgage contract, shall not be assessed or accrue during or as a result of a mortgage forbearance granted pursuant to this section. Nothing in this section shall be construed to impact property tax and insurance obligations of an owner related to any real property in the State. A mortgage servicer that grants a mortgage forbearance pursuant to this section shall encourage owners to seek out United States Department of Housing and Urban Development certified housing counseling and shall provide to the property owner confirmation of the approval of the forbearance, information concerning the process for forbearance, and information on how to request a subsequent forbearance.
c. (1) A mortgage servicer shall not furnish negative mortgage payment information to a debt collector or credit reporting agency related to mortgage payments subject to a mortgage forbearance under this section.
(2) In response to a complaint to the Attorney General from a storm-impacted homeowner, or on the Attorney General's independent initiative, the Attorney General may bring an action alleging a mortgage servicer has violated the provisions of this subsection. Upon a finding that non-compliance by a mortgage servicer with this section has occurred, a court of competent jurisdiction may:
(a) order the non-compliant mortgage servicer to retract the debt reported to the collection or credit reporting agency, bureau, or data collection facility;
(b) impose a fine on the non-compliant mortgage servicer, not to exceed $5,000 per violation;
(c) order the non-compliant mortgage servicer to pay a reasonable counsel fee in connection with a storm-impacted homeowner whose debt has been reported to a collection or credit reporting agency, bureau, or data collection facility;
(d) provide a copy of the order immediately at the request of and at no cost to the impacted homeowner;
(e) order the non-compliant mortgage servicer to take such steps as are necessary, within 30 days of the order, to rehabilitate the credit record of a storm-impacted homeowner, with an exact copy provided at no cost to the homeowner of the efforts made in that regard; and
(f) order the non-compliant mortgage servicer to pay an award of damages to the impacted homeowner not to exceed 25 percent of the debt attempted to be collected or reported by the non-compliant mortgage servicer to the collection or credit reporting agency, bureau, or data collection facility, the minimum award being $350.
d. During any period of mortgage forbearance granted pursuant to this section, a mortgage servicer shall not, for the purposes of foreclosure of a residential property that has received a forbearance that is not vacant, abandoned or otherwise subject to P.L.2003, c.210 (C.55:19-78 et al.):
(1) send a storm-impacted homeowner a notice of intention to foreclose pursuant to section 4 of P.L.1995, c.244 (C.2A:50-56); or
(2) otherwise initiate the foreclosure process.
A deadline or time period for action by a party to the foreclosure process for a residential property filed prior to the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill) shall be tolled until the end of the period of the mortgage forbearance.
e. Notwithstanding the provisions of any law, rule, or regulation to the contrary, the repayment period of any mortgage subject to the forbearance established pursuant to this section shall be extended by the number of months the forbearance is in effect. The payments not made during the months of the forbearance shall instead be due on a monthly basis during the period constituting an extension of the mortgage, unless the property owner has chosen to make these payments earlier. During the time of the forbearance, and during the period constituting an extension of the mortgage, all terms and conditions of the original mortgage, except with regard to default and delinquency during forbearance, shall continue without modification, and there shall be no fees assessed, including attorney's fees, related to the forbearance or late payment, or penalty for early repayment. A storm-impacted homeowner shall have the option to discontinue the mortgage forbearance at any time at the election of the impacted homeowner upon written consent and a written statement that they would have the rights provided herein and knowingly waive those rights.
f. A storm-impacted homeowner denied a forbearance under this section by a mortgage servicer licensed by the Department of Banking and Insurance may file a complaint with the Department of Banking and Insurance. The department shall investigate the complaint and, if appropriate, shall order the mortgage servicer to grant a forbearance to the impacted homeowner pursuant to this section.
g. (1) To the extent required by the Administrative Director of the Courts, the mortgage servicer shall provide the docket numbers, party names, and property addresses as to any pending court actions involving any property granted a forbearance to the Superior Court Clerk's Office at least monthly.
(2) The mortgage servicer shall submit information on all forbearances that the mortgage servicer has provided within the State to the Department of Banking and Insurance on a monthly basis, or on any alternative schedule directed by the Department of Banking and Insurance, after removing all personally-identifiable information. This information shall be submitted in accordance with any specifications required by the Department of Banking and Insurance, and, to the extent required by the Department of Banking and Insurance, shall be deemed to be government records and subject to the provisions of P.L.1963, c.73 (C.47:1A-1 et seq.), commonly known as the open public records act.
h. Notwithstanding anything to the contrary in this section, to the extent that the application of any provision of this section would conflict with federal laws and guidelines, such provision shall not apply to, and does not affect, any mortgage loans made, insured, or securitized by any agency or instrumentality of the United States, any government sponsored enterprise, a federal home loan bank, or a national bank, or the rights and obligations of any lender, issuer, servicer or trustee of such obligations, including servicers for the Government National Mortgage Association or any other entity determined by the Department of Banking and Insurance to be in conflict with the provision.
i. It shall be an unlawful discrimination in violation of the "New Jersey Law Against Discrimination," P.L.1945, c.169 (C.10:5-1 et seq.) for a mortgage servicer to discriminate in application of the provisions of this section on any basis protected by subsection g. of section 11 of P.L.1945, c.169 (C.10:5-12).
j. This section shall not be construed to prohibit a mortgage servicer from considering an oral or electronic request for a mortgage forbearance instead of a written request submitted pursuant to subsection a. of this section.
4. A storm-impacted homeowner who is the subject of a foreclosure proceeding shall be awarded, by the court and upon application by the property owner, a stay in the foreclosure proceedings if the conditions necessary to obtain a mortgage forbearance are satisfied, as established pursuant to subsection a. of section 3 of P.L. , c. (C. ) (pending before the Legislature as this bill). An application to the court by a storm-impacted homeowner pursuant to this section shall be made prior to the first day of the sixth month next following the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), unless the courts in their discretion permit application submission for a longer period. The award of a stay pursuant to this section shall conclude upon the earlier of:
a. the conclusion of one year following the initial award of a stay of foreclosure proceedings; or
b. July 1, 2024.
5. This act shall take effect immediately, and shall apply retroactively to mortgage payments missed subsequent to September 1, 2021.
STATEMENT
This bill would establish foreclosure protection and mortgage relief for certain homeowners impacted by the remnants of Hurricane Ida.
Hurricane Ida initially approached the Gulf Coast as a category 4 hurricane, and caused severe damage to a large area of the south and northeast regions of the country. In New Jersey, thousands of families have been displaced and unable to return to their homes as a result of this storm. This bill would offer certain homeowners impacted by the remnants of Hurricane Ida temporary protections against foreclosure, and would require mortgage servicers to provide a temporary pause in the mortgage payment obligations of the storm-impacted homeowners.
The bill defines a "storm-impacted homeowner" as a homeowner who, as of August 31, 2021, occupied a residential property as the homeowner's primary residence, and who obtained federal disaster assistance for disaster-related needs as a result of damage sustained to the home due to the remnants of Hurricane Ida.
The bill directs a mortgage servicer to grant a mortgage forbearance to a storm-impacted homeowner if the homeowner submits a written request prior to the first day of the sixth month following the enactment of the bill, affirming that the homeowner:
· suffered a negative financial impact resulting from damage to the homeowner's primary residence due to the remnants of Hurricane Ida, and obtained federal disaster assistance as a result;
· has a gross household income for 2022, that does not exceed 150 percent of the most recent area median income by zip code; and
· does not possess bank accounts that collectively contain more than six months' reserves of the homeowner's gross household income for 2021, although the mortgage servicer may require the homeowner to provide a cash asset certification to demonstrate compliance with this provision.
Upon receipt of a written request or verbal authorization for a mortgage forbearance from a storm-impacted homeowner, the bill would require a mortgage servicer to provide to the homeowner with a mortgage forbearance and confirmation of this action in writing. The minimum initial mortgage forbearance period of a storm-impacted homeowner would be one year. If requested, the bill requires the mortgage servicer to provide a subsequent forbearance period of at minimum 180 days, for a total of at minimum 545 days. Fees, penalties, or interest, including attorney's fees beyond the amounts scheduled and calculated as if the storm-impacted homeowner made all contractual payments on time and in full under the terms of the mortgage contract, would not be assessed or accrue during or as a result of a mortgage forbearance. A forbearance would not impact property tax and insurance obligations. A mortgage servicer that grants a forbearance pursuant to the bill would be required to encourage owners to seek out certified housing counseling and provide confirmation of the approval of the forbearance, information concerning the process for forbearance, and information on how to request a subsequent forbearance.
The bill prohibits a mortgage servicer from furnishing negative mortgage payment information to a debt collector or credit reporting agency related to mortgage payments subject to a mortgage forbearance under the bill. In response to a complaint to the Attorney General from an impacted homeowner, the Attorney General may bring an action alleging a mortgage servicer has violated this prohibition.
Under the bill, the repayment period of any mortgage subject to the forbearance would be extended by the number of months the forbearance is in effect. The payments not made during the months of the forbearance would instead be due on a monthly basis during the period constituting an extension of the mortgage, unless the property owner chooses to make these payments earlier.
A storm-impacted homeowner denied a forbearance under the bill by a mortgage servicer licensed by the Department of Banking and Insurance ("DOBI"), and not a State- or nationally-chartered financial institution, may file a complaint with DOBI. DOBI would be required to investigate the complaint and, if appropriate, would order the mortgage servicer to grant a forbearance to the impacted homeowner.
To the extent required by the Administrative Director of the Courts and DOBI, the bill would require a mortgage servicer to provide information on the provision of forbearances to those entities.
Under the bill, a storm-impacted homeowner who is the subject of a foreclosure proceeding would be awarded, by the court and upon application by the property owner, a stay in the foreclosure proceedings if the conditions necessary to obtain a mortgage forbearance are satisfied. An application to the court by a storm-impacted homeowner would be required to be made prior to the first day of the sixth month following the effective date of the bill, unless the courts in their discretion permit application submission for a longer period. The award of a stay pursuant to the bill would conclude upon the earlier of:
· the conclusion of one year following the initial award of a stay of foreclosure proceedings; or
· July 1, 2024.
The bill would take effect immediately, and apply retroactively to mortgage payments missed subsequent to September 1, 2021.
