Foreclosure Defense Law Blog

New Jersey Governor Signs “Save New Jersey Homes Act of 2008” Into Law

On September 15, 2008, the Governor of New Jersey enacted the “Save New Jersey Homes Act of 2008,” a law designed to protect homeowners threatened by foreclosure in the wake of the subprime mortgage crisis. As discussed in our previous post, Proposed New Jersey Act to Protect Against Foreclosure Passes Both Houses, the new law allows for eligible borrowers to continue to pay introductory rates on their mortgages for a period of three years before facing an interest rate reset. These homeowners are still required to ultimately pay off the interest deferred during the extension period. However, the law provides them with a reasonable period of time to continue to make payments on their mortgages; hopefully avoiding foreclosure while searching for an alternative housing solution. The law also requires financial institutions to provide qualified homeowners with written notice of an impending interest rate reset both 60 and 30 days prior to the expiration of the introductory rate.

The law should provide some much-needed relief to homeowners in New Jersey. The State has been documented as having one of the highest foreclosure rates in the nation, particularly during the past year.

Comments/Questions: ljm@gdnlaw.com

© 2008 Nissenbaum Law Group, LLC

Please visit our website at www.gdnlaw.com and our other blogs at www.nissenbaumlawblog.com; www.foreclosuredefenselawblog.com; www.saleofbusinesslawblog.com; www.internetdefamationlawblog.com; www.constructionlawinfoblog.com; www.filmproductionlawblog.com; www.internetlawinfoblog.com; and www.njbusinesslawblog.com

Proposed New Jersey Act to Protect Against Foreclosure Passes Both Houses

Proposed Legislation: A bill (A-2780) which would extend foreclosure protection to thousands of New Jersey homeowners has passed both Houses, and now only awaits approval by the Governor to become official state law. The “Save New Jersey Homes Act of 2008” would offer direct aid to borrowers caught up in the growing national mortgage crisis by extending the period for repayment of introductory rate mortgages on residential property under certain circumstances.

Specifically, under the legislation, homeowners with introductory rate mortgages would be afforded the opportunity to continue their payments at the much lower pre-reset rate for up to three years before facing an interest rate reset. In addition, lenders would be required to provide qualified homeowners with written notice of an impending interest rate reset, both 60 days and 30 days before the introductory rate is set to expire. This notice must disclose, in plain language, the following information:

• The current interest rate under the terms of the introductory rate mortgage;
• The date on which the interest rate resets from a fixed introductory rate to a variable rate;
• An explanation of how the reset rate and monthly payments would be determined;
• An estimate of the monthly payment under the reset rate and the assumptions on which that estimate is based;
• A list of alternatives the borrower may pursue prior to the date of the reset, including any refinancing or renegotiation terms offered by the lender;
• An explanation of the borrower’s right to obtain an introductory rate extension and the procedure for obtaining such an extension; and
• A certificate of extension form to be completed by the borrower in order to obtain an introductory rate extension.

If the bill is signed into law by the Governor, New Jersey would become the first state to take such an approach. The proposed legislation would to provide borrowers with a reasonable window to find an alternative housing solution while continuing to make payments on their mortgages and therefore hopefully avoid foreclosure. At the same time, the measure benefits mortgage lenders in that they would continue to receive monthly revenue while avoiding the expense of having to own and maintain foreclosed properties. Moreover, allowing borrowers who face foreclosure to remain in their homes would also provide some administrative relief to the municipalities in which those homes are located, by sparing them cost of maintaining abandoned and unused properties.

NOTE: As of the date of this entry, the “Save New Jersey Homes Act of 2008” had not yet been signed into law.

Comments/Questions: ljm@gdnlaw.com

© 2008 Nissenbaum Law Group, LLC

Please visit our website at www.gdnlaw.com and our other blogs at www.nissenbaumlawblog.com; www.foreclosuredefenselawblog.com; www.saleofbusinesslawblog.com; www.internetdefamationlawblog.com; www.constructionlawinfoblog.com; www.filmproductionlawblog.com; www.internetlawinfoblog.com; and www.njbusinesslawblog.com

New Jersey Legislature Contemplates Setting Statute of Limitations for Residential Foreclosure Actions

Proposed Legislation: Currently pending in the New Jersey Legislature is bill A2263.  This bill seeks to codify previous caselaw and to amend the Fair Foreclusure Act to delineate the appropriate statute of limitations for lenders to institute residential mortgage foreclosures.  It provides that an action must be commenced upon the earlier of: (a) six years from the date that the last payment under the mortgage was supposed to have been made; or (b) twenty years from the date that the debtor defaulted on the mortgage obligations, if he has not properly cured that default. 

Comments/Questions: ljm@gdnlaw.com Please visit our website at www.gdnlaw.com and our other blogs at www.nissenbaumlawblog.com; www.foreclosuredefenselawblog.com; www.saleofbusinesslawblog.com; www.internetdefamationlawblog.com; www.constructionlawinfoblog.com; www.filmproductionlawblog.com; www.internetlawinfoblog.com; and www.njbusinesslawblog.com