Bill > S3525

This bill requires financial institutions (such as banks, credit unions, and mortgage servicers) to provide more flexible payment options for mortgagors (borrowers). Specifically, for mortgagors in good standing, financial institutions must allow biweekly payments (every two weeks), semi-monthly payments (twice per month), and additional principal payments without penalty. When a biweekly payment exceeds the total annual contractual mortgage payment, the excess amount will be applied directly to the mortgage loan principal. For semi-monthly payments, borrowers can pay half of their monthly contractual mortgage payment twice a month. The bill also addresses escrow accounts, requiring financial institutions to notify borrowers of any escrow shortages and allowing borrowers to make additional payments to reduce or eliminate projected shortages. These payments will be applied first to unsatisfied escrow payments and then to the mortgage loan principal. The bill applies to mortgage agreements entered into six months after its enactment and covers residential properties with one to six dwelling units, with a potential partial non-residential use. This legislation aims to provide borrowers with more payment flexibility and opportunities to reduce their mortgage principal more quickly.

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https://www.njleg.state.nj.us/bill-search/2024/S3525