Bill > A4034

Introduced Session

This bill would allow the Governor to permit emergency-impacted mortgage forbearances and rent payment responsibility reductions for certain emergency-impacted residential property owners and tenants when a state of emergency or public health emergency has been declared. The bill would also establish consumer reporting protections in relation to the COVID-19 pandemic. This bill would provide that, whenever a public health emergency or a state of emergency is declared by the Governor and is in effect, the Governor may issue an executive order to provide that emergency-impacted homeowners, who have sustained a substantial loss of income, may apply for an emergency-impacted mortgage forbearance, meaning a period of time, not to exceed three months, during which obligations for mortgage and interest payments are suspended. Under the bill, an emergency-impacted homeowner would apply to the Commissioner of Community Affairs, or to an alternative administrative agent serving as the reviewing entity, if directed by the executive order, for a certification of eligibility for the forbearance. The commissioner, or other reviewing entity, would approve or deny an application within 30 days. If the application is not approved or denied within 30 days of delivery, it would be deemed approved. The forbearance period of an emergency-impacted homeowner would conclude three months following the commencement of the forbearance period, which period would commence upon application approval. The repayment period of any mortgage subject to a forbearance would 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, all terms and conditions of the original mortgage, except with regard to default and delinquency during forbearance, would continue without modification, and there would be no fees assessed for the forbearance, or penalty for early repayment. The bill includes qualifying residential landlords in its definition of emergency-impacted homeowners. However, if directed in an emergency-impacted mortgage forbearance executive order, the availability of a forbearance to a residential landlord would be restricted to a landlord of a building registered as a multiple dwelling pursuant to the "Hotel and Multiple Dwelling Law." An emergency-impacted homeowner who applies for a forbearance on a property as its landlord would only be eligible for a forbearance if the homeowner commits to providing any emergency-impacted tenant residing in the residential property with an emergency rent reduction period, consisting of a temporary reduction in rent payment responsibilities. An emergency-impacted tenant whose landlord has been provided with a forbearance would apply to the landlord for an emergency rent reduction period, unless directed by the emergency-impacted mortgage forbearance executive order to apply to an alternative administrative agent. The emergency-impacted mortgage forbearance executive order would establish whether other forms of financial relief obtained by the landlord, in addition to a forbearance, would also authorize the landlord's emergency-impacted tenant to apply for an emergency rent reduction period. An emergency-impacted tenant would be provided with the level of rent reduction directed by the emergency-impacted mortgage forbearance executive order. The executive order may authorize the rent reduction provided during an emergency rent reduction period to exceed any limitation on rent increases established by a "Notice of Rent Protection Emergency," that may have been issued by the Governor. If provided by the executive order, rent left unpaid by a tenant whose landlord has a forbearance, in accordance with an emergency rent reduction, would not have to be repaid at a later date. Under the bill, an emergency-impacted mortgage forbearance executive order may provide the following protections to residential tenants regardless of whether the tenant's landlord has obtained a forbearance: · that eviction proceedings shall not be initiated during the time provided in the executive order, unless the court determines on its own motion or motion of the parties that enforcement is necessary in the interest of justice; · A prohibition preventing landlords from imposing late fees on residential tenants; and · A 90-day repayment window applied individually for each month of rent arrears for a residential tenant, beginning with the first day of the second month next following the conclusion of both the state of emergency and public health emergency. If indicated by the executive order, however, this repayment requirement would not apply to certain rent left unpaid by a tenant whose landlord has a forbearance. Prior to one month following the effective date of this bill, the bill directs the commissioner, to the greatest extent reasonably possible, to: · notify homeowners of the forbearance program; · notify landlords who may obtain a forbearance, or other qualifying financial relief, of their responsibilities to alert their tenants of the option, if emergency-impacted, to apply for an emergency rent reduction period; · post information on eligibility and the application process for the forbearance, and make forbearance applications available, on DCA's website; · notify the Superior Court Clerk's Office of the individuals and associated residential properties that are granted a certification of eligibility for a forbearance; · notify the State's active mortgage lenders of the individuals and associated residential properties that are eligible for a forbearance; and · provide tenants with a copy of the certification of eligibility granting their landlord a forbearance. Under the bill, upon knowledge of a homeowner's eligibility for a forbearance, the mortgage lender would notify the homeowner. Upon approval of a forbearance application, the reviewing entity would notify the homeowner. Emergency-impacted homeowners awarded a forbearance under this bill would be responsible for the maintenance of the property during the period of forbearance. The bill would not be construed to impact property tax and insurance obligations of a property owner related to any real property in the State. The bill directs the Commissioner of Community Affairs to adopt the rules and regulations necessary for implementation no later than one month following enactment. The emergency-impacted mortgage forbearance executive order, or the rules and regulations adopted by the commissioner, may limit the bill's application to non-federally-guaranteed mortgages, and may further limit its application as deemed necessary to comply with federal law. Additionally, the commissioners' rules and regulations would be able to adjust and supplement the provisions of the initial executive order, as long as those adjustments and additions would not conflict with the bill. Additionally, the bill provides that no consumer reporting agency shall include, and no user of a consumer report shall consider, any adverse information in a consumer report that is a result of the coronavirus disease 2019 pandemic, with respect to an affected person who provides the agency or user notice pursuant to the bill. Under the bill, an affected person may contact any consumer reporting agency or user of a consumer report and request that the agency or user disregard any adverse information related to the person obtained by the agency or user with respect to the period beginning with the Public Health Emergency and State of Emergency declared by the Governor in Executive Order 103 of 2020 and extending 90 days following the end of that public health emergency and state of emergency. The bill requires any consumer reporting agency or user of a consumer report that receives a request to respond to the affected person and the Director of the Division of Consumer Affairs in the Department of Law and Public Safety within five days of receiving the request.

Committee Categories

Angela Mcknight (D)*,  Shanique Speight (D)*,  Britnee Timberlake (D)*,  Benjie Wimberly (D)*,  Daniel Benson (D),  Ralph Caputo (D),  Linda Carter (D),  Annette Chaparro (D),  Joe Danielsen (D),  Roy Freiman (D),  Thomas Giblin (D),  Jamel Holley (D),  Mila Jasey (D),  Angelica Jimenez (D),  Yvonne Lopez (D),  John McKeon (D),  Pedro Mejia (D),  Bill Moen (D),  Gabriela Mosquera (D),  Raj Mukherji (D),  Carol Murphy (D),  Verlina Reynolds-Jackson (D),  Shavonda Sumter (D),  Adam Taliaferro (D),  Cleopatra Tucker (D),  Valerie Vainieri Huttle (D),  Andrew Zwicker (D), 

Substituted by S2340 (2R) (on 07/30/2020)

Official Document