Bill Text: NJ S3525 | 2024-2025 | Regular Session | Introduced
Bill Title: Requires financial institutions to allow mortgagors to make biweekly and bimonthly payments and payments to mortgage principal.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced) 2024-06-28 - Introduced in the Senate, Referred to Senate Commerce Committee [S3525 Detail]
Download: New_Jersey-2024-S3525-Introduced.html
Sponsored by:
Senator NELLIE POU
District 35 (Bergen and Passaic)
SYNOPSIS
Requires financial institutions to allow mortgagors to make biweekly and bimonthly payments and payments to mortgage principal.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning financial institutions servicing mortgages and supplementing P.L.2009, c.53 (C.17:11C-51 et seq.).
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. A financial institution shall allow mortgagors to:
(1) make biweekly mortgage payments, in which any amount paid in excess of the total annual mortgage payments due shall be applied to the mortgage loan principal;
(2) make bimonthly mortgage payments in the amount of half of the total monthly mortgage payment due; and
(3) pay additional amounts to the mortgage loan principal, without the imposition of any penalty.
b. As used in this section:
"Bimonthly" means occurring twice each month.
"Biweekly" means occurring every two weeks.
"Financial institution" means a State chartered bank, savings bank, savings and loan association, or credit union, licensed lender, or mortgage servicer subject to the laws of this State.
"Mortgage loan" means a loan made to a natural person to whom credit is offered or extended primarily for personal, family or household purposes which is secured by a mortgage constituting a lien on real property located in this State on which there is erected or to be erected a structure containing one, two, three, four, five or six dwelling units, a portion of which structure may be used for nonresidential purposes, in the making of which the financial institution relies primarily upon the value of the property.
"Mortgage servicer" means any person, who, for the person or on behalf of a financial institution, receives payments of principal and interest in connection with a mortgage loan, records the payments on the person's books and records and performs the other administrative functions as may be necessary to properly carry out the mortgage holder's obligations under the mortgage agreement including, when applicable, the receipt of funds from the mortgagor to be held in escrow for payment of real estate taxes and insurance premiums and the distribution of the funds to the taxing authority and insurance company.
"Mortgagor" means a person who borrows money by mortgaging property to a mortgagee as security for a mortgage loan.
2. This act shall take
effect on the first day of the sixth month next following enactment and shall
apply to mortgage agreements entered into on or after that date.
STATEMENT
This bill requires financial institutions to allow mortgagors to:
(1) make biweekly mortgage payments, in which any amount paid in excess of the total annual mortgage payments due is to be applied to the mortgage loan principal;
(2) make bimonthly mortgage payments in the amount of half of the total monthly mortgage payment due; and
(3) pay additional amounts to the mortgage loan, without the imposition of any penalty.
The bill applies to financial institutions regulated by the State, including: State chartered banks, savings banks, savings and loan associations, or credit unions, licensed lenders, or mortgage servicers subject to New Jersey law.
