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  • NJ A3678
  • Regulates certain servicing activities provided by mortgage servicing organizations for residential mortgage loans.
In Committee
Crossed OverPassedSignedDead/Failed/Vetoed
2016-2017 Regular Session
This bill provides the Department of Banking and Insurance with authority to regulate certain servicing activities provided by mortgage servicing organizations for mortgage loans on residential real property located in New Jersey. The underlying intent of the bill is to balance the protections provided by regulatory oversight to mortgagors, to assure their mortgages are serviced in a proper and timely manner, without imposing burdensome regulation on servicing organizations and the marketability of selling, assigning, or transferring servicing rights to New Jersey residential mortgages. To this end, the bill requires a servicing organization to register with the Department of Banking Insurance and to be subject to regulation by the department for the limited purposes of this bill. The bill exempts from its provisions: any federally insured bank or out-of-State bank; any wholly-owned subsidiary of a federally insured bank; or any operating subsidiary where each owner of the operating subsidiary is wholly owned by the same bank. The bill requires a servicing organization to maintain a written schedule of fees that it charges mortgagors. The schedule shall identify each fee, provide a plain explanation of the fee, and state how the fee is calculated or determined. A servicing organization shall make its schedule available to the mortgagor or the mortgagor's authorized representative at the time that the servicing of the mortgage loan is transferred to the servicing organization and at any time upon request of the mortgagor or the mortgagor's authorized representative. The bill prohibits a servicing organization from imposing any late fee, convenience fee, delinquency fee, or any other fee that is imposed as a penalty for a late payment, in situations in which the mortgagor's payment is otherwise a full payment for the applicable period and is paid on, or prior to, its due date or within any applicable grace period provided under the terms of the mortgage loan agreement, using any manner of payment method or service that the servicing organization uses to obtain payment from a mortgagor. The bill also prohibits servicing organizations from engaging in certain unfair or deceptive practices, including those relating to misrepresentation of late fees and mortgage payments. Servicing organizations shall also comply with any other State and federal law concerning the servicing of mortgage loans or any related obligation, including certain State and federal laws specified in the bill. A violation of any federal law or regulation shall be a violation of the bill and a basis upon which the Commissioner of Banking and Insurance may take enforcement action pursuant to the bill. The bill also requires servicing organizations to respond to a mortgagor whose mortgage loan agreement is serviced by a servicing organization regarding any complaint or inquiry presented to it by the mortgagor, and shall initiate any appropriate responsive action, within 10 business days of receipt of the complaint or inquiry. Servicing organizations shall, upon request, make any accounts, books, and records concerning servicing activities available to the commissioner. If a servicing organization violates any provision of the bill, it shall be liable to a civil penalty of not more than $500 for each offense. Each violation shall constitute a separate offense, and if the violation is of a continuing nature, each day during which it continues shall constitute an additional, separate, and distinct offense. The penalties provided under the bill shall be collected pursuant to the "Penalty Enforcement Law of 1999," P.L.1999, c.274 (C.2A:58-10). Finally the bill requires the commissioner to adopt, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), rules and regulations necessary to effectuate the purposes of this act.
2nd Reading in the Assembly, Financial Institutions and Insurance
Reported out of Assembly Committee, 2nd Reading  (on 10/27/2016)
Date Chamber Action Description
10/27/2016 A Reported out of Assembly Committee, 2nd Reading
10/27/2016 Assembly Financial Institutions and Insurance Hearing (10:00 10/27/2016 Committee Room 16, Fourth Floor)
4/14/2016 A Introduced, Referred to Assembly Financial Institutions and Insurance Committee
Date Motion Yea Nay Other
Detail 10/27/2016 Assembly Financial Institutions and Insurance Committee: Reported Favorably 13 0 0