Nebraska and New Jersey Legislative Update

Nebraska and New Jersey Legislative Update

The Nebraska legislature recently enacted laws governing the enforcement and servicing of real estate loans and amended its laws governing future advances, effective July 17, 2014. The New Jersey legislature recently amended its laws governing mortgages lenders’ maintenance of vacant properties, effective July 14, 2014.

 

NEBRASKA LEGISLATIVE BILL 788

 

The enforcement and servicing of any real estate loan agreement or any mortgage, deed of trust, or other security instrument by which the loan is secured must be according to state and federal law only.  A local ordinance or resolution may not add to, change, interfere with any rights or obligations of, impose upon, or require payment of fees or taxes of a kind by, a lender, mortgagee, beneficiary, or trustee in a trust deed or servicer relating to, or delay or affect the enforcement and servicing of, any real estate loan agreement or any mortgage, deed of trust, or other security instrument by which the loan is secured.

 

The above provisions do not apply to any ordinance or resolution adopted according to the Community Development Law.

 

Any interest in real property capable of being transferred may be mortgaged or transfers of trusts of real property may be made to secure existing debts or obligations, debts or obligations created simultaneously with the execution of the mortgage, future advances necessary to protect the security, even though such future advances cause the total indebtedness to exceed the maximum amount stated in the mortgage or trust deed.

 

Future advances necessary to protect the security include, but are not limited to, advances for payment of real property taxes, special assessments, prior liens, hazard insurance premiums, maintenance charges imposed under a condominium declaration or other covenant, and costs of repair, maintenance, or improvements.  Future advances necessary to protect the security are secured by the mortgage or trust deed and have the priority specified below.

 

Existing debts or obligations, debts or obligations created simultaneously with the execution of the mortgage, future advances necessary to protect the security, even though such future advances cause the total indebtedness to exceed the maximum amount stated in the mortgage, or any future advances to be made at the option of the parties in any amount are equally secured by the mortgage from the time of filing the mortgage as provided by law and have the same priority as the mortgage over the rights of all other persons who acquire any rights in or liens upon the mortgaged real property subsequent to the time the mortgage was filed.

 

The borrower or his or her successor in title may limit the amount of optional future advances secured by the mortgage by filing a notice for record in the office of the register of deeds of each county in which the mortgaged real property or some part of it is situated.  A copy of the notice must be sent by certified mail to the lender at the address of the lender set forth in the mortgage or deed of trust or, if the mortgage or deed of trust has been assigned, to the address of the most recent assignee reflected in a recorded assignment of the mortgage or deed of trust.  The amount of such secured optional future advances will be limited to not less than the amount actually advanced at the time of receipt of such notice by the lender.

 

If any optional future advance is made by the lender to the borrower or his or her successor in title after receiving written notice of the filing for record of any trust deed, mortgage, lien, or claim against the mortgaged real property, then the amount of the optional future advance will be junior to the trust deed, mortgage, lien, or claim.  The notice must be sent by certified mail to the lender at the address of the lender set forth in the mortgage or deed of trust or, if the mortgage or deed of trust has been assigned, to the address of the most recent assignee reflected in a recorded assignment of the mortgage or deed of trust.

 

NEW JERSEY ASSEMBLY BILL 347

 

The following provisions have been deleted from New Jersey law:

 

For the purposes of this section, “lender” means a federal or state chartered bank, savings bank, savings and loan association or credit union, any person required to be licensed under the provisions of the New Jersey Licensed Lenders Act, and any entity acting on behalf of the lender named in the debt obligation including, but not limited to, servicers.

 

A lender that serves a notice of intention to foreclose on a mortgage on residential property in New Jersey according to the Fair Foreclosure Act must serve the public officer of the municipality in which the property is located, or, if the municipality has not designated a public officer, the municipal clerk, with a copy of the notice at the same time that the lender serves the notice on the owner of the property.  The lender must include the full name and contact information of a person located within New Jersey who is authorized to accept service on behalf of the lender with the copy of the notice served on the public officer or municipal clerk.

 

If the residential property becomes vacant at any time after the lender files the notice of intention to foreclose, but prior to vesting of title in any third party, and the municipality determines that the property is in violation of any applicable New Jersey or local housing code, the municipality may notify the lender of the violation, by providing a copy of the notice to the person located within New Jersey who is authorized to accept service on behalf of the lender, and may require the lender to correct the violation.