Bill > S2340

Introduced Session

This bill allows the Governor to permit 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. 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 a 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. The forbearance period of an emergency-impacted homeowner would conclude no later than 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 a 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 mortgage forbearance executive order to apply to an alternative administrative agent. The mortgage forbearance executive order would establish whether other forms of financial relief obtained by the landlord, in addition to a mortgage 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 mortgage forbearance executive order. The mortgage forbearance 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. Under the bill, a 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 or continued during the time provided in the executive order, unless the court determines on its own motion or motion of the parties that a proceeding is necessary in the interest of justice; · A prohibition preventing landlords from imposing late fees on residential tenants; and · A 90-day repayment window 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 established pursuant to subsection a. of this section. 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 courts of the individuals and associated residential properties that are eligible for a forbearance; and · notify the State's active mortgage lenders of the individuals and associated residential properties that are eligible for a forbearance. Under the bill, upon knowledge of a homeowner's eligibility for a forbearance, the mortgage lender would notify the homeowner and the courts. Upon approval of a forbearance application, the reviewing entity would notify the applicant, the mortgage lender, and the courts. The bill provides that a mortgage forbearance executive order may designate a foreclosure action filed by a bank as an unlawful practice, pursuant to the New Jersey consumer fraud act, if the action is filed only as a result of not receiving mortgage payments from an emergency-impacted homeowner during the time period of a forbearance. The bill also provides that the executive order may designate that a landlord has engaged in an unlawful practice under the New Jersey consumer fraud act if, while in receipt of a forbearance, the landlord willfully refuses to provide an emergency-impacted tenant with an emergency rent reduction period. Emergency-impacted homeowners awarded a forbearance under this bill would be responsible for the maintenance of the property during the period of forbearance. After service of notice of any proceedings conducted to terminate forbearance, made on the homeowner at an address determined pursuant to due diligence of the creditor to be the actual current residence of the homeowner, providing opportunity for the homeowner to respond and contest the proceedings a forbearance awarded under the bill would cease immediately upon a court's determination that the subject residential property has been abandoned by the emergency-impacted homeowner. Nothing in this bill would limit the ability of parties to a foreclosure action to participate in a mediation sponsored by the Administrative Office of the Courts in accordance with the requirements of the mediation program. Nothing in this bill would 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 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 commissioner's 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.

Committee Categories

Linda Greenstein (D)*,  Troy Singleton (D)*,  Dawn Addiego (D),  Daniel Benson (D),  Ralph Caputo (D),  Thomas Giblin (D),  Mila Jasey (D),  John McKeon (D),  Teresa Ruiz (D),  Cleopatra Tucker (D),  Shirley Turner (D),  Valerie Vainieri Huttle (D),  Loretta Weinberg (D), 

Senate Amendment (25-0) (Singleton) (on 10/29/2020)

Official Document