New Jersey Gov. Phil Murphy, aiming to reverse the state’s ongoing foreclosure crisis, signed what he called a “bipartisan legislative package” of nine bills into law Monday that are geared toward expanding homeowner protections.
Patch.com reported that many of these measures were recommended in a September 2018 report by the Special Committee on Residential Foreclosure, which was created by Chief Justice Stuart Rabner.
“The foreclosure crisis has hurt our economy and jeopardized economic security of too many New Jersey families," Murphy said. "Our communities cannot succeed while vacant or foreclosed homes sit empty or while families live in limbo. I am proud to sign these bills into law [Monday] and get New Jersey closer to ending the foreclosure crisis."
Black Knight’s 2018 Mortgage Monitor report had New Jersey’s foreclosure rate at the end of 2018 at 1.77%, trailing only Mississippi (2.36%), Louisiana (2.05%), and West Virginia (1.81%).
One new law (A-4997), also known as the “Mortgage Servicers Licensing Act,” requires anyone working as a mortgage servicer to obtain a license from the Commissioner of Banking and Insurance for each main office and each branch office where business is conducted, unless the person is exempt under provisions outlined in the bill.
“A major part of the foreclosure crisis has been mortgages that were serviced by individuals who were not properly trained and in many cases, simply operated using unethical practices,” said Vincent Mazzeo of Atlantic County, one of the bill’s co-sponsors. “This new law creates checks and balances of sorts as it pertains to mortgage services.”
A mortgage servicer that is exempt from licensure will still be required to maintain records of each residential mortgage loan transaction and produce related records as requested. Upon assigning the servicing rights on a residential mortgage loan, the servicer will be required to make certain disclosures to the mortgagor as per the law.
Insider New Jersey stated the Commissioner of Banking is now authorized to investigate and examine mortgage servicers and suspend, revoke, or refuse to renew a servicer license for reasons defined in the bill. Violators can be penalized with a third-degree crime and subjected to civil penalties up to $25,000.
The law will take effect in 90 days.
“The nine bills signed into law [Monday] are the first of many steps we’ll take to address foreclosure process concerns in the state,” Assembly Speaker Craig Coughlin of Middlesex County said. “More efficiency and ensuring fairness in the current system protects the interests of our homeowners, our neighborhoods and communities. These creative solutions to this complex problem will better the lives of thousands of New Jersey residents.”