21 Feb New Jersey Legislative and Oregon Regulatory Update
The New Jersey legislature recently amended its laws governing Superstorm Sandy recovery, effective February 10, 2017. The Oregon Department of Consumer and Business Services (“Department”) recently revised its rules related to corporate surety bonds, effective April 1, 2017.
New Jersey Assembly Bill 333
“Forbearance” means a period of time during which obligations for mortgage and interest payments are suspended (the ending date for the forbearance period was previously November 1, 2018 and such ending date was deleted).
“Mortgage” means a mortgage, trust deed, or other security in the nature of a residential mortgage.
“Sandy-Impacted Homeowner” means a homeowner for whom one or both of the following are true:
- The homeowner received rental assistance from the Federal Emergency Management Agency as a result of damage to his or her primary residence due to Superstorm Sandy; or
- The homeowner has been approved for assistance through the Reconstruction, Rehabilitation, Elevation and Mitigation (“RREM”) or Low-to-Moderate Income (“LMI”) program.
“Superstorm Sandy” means the major storm that made landfall in New Jersey on October 29, 2012.
A Sandy-Impacted Homeowner will be eligible for a forbearance regardless of whether the homeowner’s primary residence is already the subject of a foreclosure proceeding (previously “if payments due under a mortgage were current as of August 10, 2015”). The Sandy-Impacted Homeowner must apply to the Commissioner of Community Affairs (“Commissioner”), on forms to be provided by the Department of Community Affairs (“Department”), for a certification of eligibility for the forbearance before the first day of the third month next following the date when the Commissioner makes the application available. The forbearance period will conclude upon the earlier of:
- The conclusion of one year following issuance of a Certificate of Occupancy for recovery and rebuilding program work;
- July 1, 2019; or
- Regarding a property in foreclosure proceedings, upon the expiration of 10 days following sheriff’s sale.
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, will continue without modification, and there will be no fees assessed for the forbearance, or penalty for early repayment.
A Sandy-Impacted Homeowner who was the subject of a foreclosure proceeding as of August 10, 2015, will, upon good cause shown, be awarded, by the court and upon application by the property owner, a stay in the foreclosure proceedings. An application to the court by a property owner must be made before July 1, 2017, unless the courts in their discretion permit application submission for a longer period. The receipt of rental assistance from the Federal Emergency Management Agency as a result of damage to the homeowner’s primary residence due to Superstorm Sandy, or approval for assistance through the RREM or LMI program, constitutes good cause for the award of a stay for a period concluding upon the earlier of:
- The conclusion of one year following issuance of a Certificate of Occupancy for recovery and rebuilding program work; or
- July 1, 2019
(previously the stay was only granted until November 1, 2018)
Prior to April 1, 2017, the Commissioner must:
- Notify as many Sandy-Impacted homeowners as is reasonably possible of eligibility for a forbearance or stay of foreclosure proceedings;
- Post information on eligibility and the application process for the forbearance and stay of foreclosure proceedings, and make forbearance applications available, on the Department’s website;
- Notify the courts of what individuals and associated properties are eligible for a forbearance or stay of foreclosure proceedings; and
- To the extent reasonably possible, notify the state’s active mortgage lenders of what individuals and associated properties are eligible for a forbearance or stay of foreclosure proceedings.
Upon knowledge of a homeowner’s eligibility for a forbearance or stay of foreclosure proceedings, the mortgage lender must notify the homeowner and the courts.
Upon approval of a forbearance application, the Commissioner must notify the applicant, the mortgage lender, and the courts.
Sandy-Impacted Homeowners awarded a stay of foreclosure proceedings or forbearance, or both, are responsible for the maintenance of the property during the stay or period of forbearance, or both. After service of notice of any proceedings conducted to terminate forbearance made on the borrower at an address determined pursuant to due diligence of the lender to be the actual current residence of the borrower, providing opportunity for the borrower to respond and contest the proceedings, a stay of foreclosure proceedings or forbearance, or both, must cease immediately upon a court’s determination that the subject residential property has been abandoned by the Sandy-Impacted Homeowner.
The required corporate surety bond must now be submitted through the Nationwide Mortgage Licensing System and Registry (“NMLS”) rather than to the Director of the Department.
Upon notification from the surety of notice of intent to cancel the corporate surety bond, or upon notification from the financial institution of notice of intent to cancel the irrevocable letter of credit, the Director of the Department of Consumer and Business Services (“Director”) must notify the mortgage banker or mortgage broker. If an effective corporate surety bond is not submitted through NMLS or an irrevocable letter of credit filed with the Director by 5 p.m. Pacific Time within thirty calendar days after receiving the notice, the Director will cancel the license of the mortgage banker or mortgage broker.
The requirement to include an assumed business name on the corporate surety bond has been deleted.