ASSEMBLY HOUSING COMMITTEE
STATEMENT TO
ASSEMBLY, No. 4871
with committee amendments
STATE OF NEW JERSEY
DATED: OCTOBER 24, 2024
The Assembly Housing Committee reports favorably and with committee amendments Assembly Bill No. 4871.
As amended, this bill would provide mortgage payment relief and foreclosure protection for certain homeowners impacted by the remnants of Hurricane Ida.
Hurricane Ida initially approached the Gulf Coast as a category 4 hurricane, and caused severe damage to a large area of the south and northeast regions of the country. In New Jersey, thousands of families have been displaced and unable to return to their homes as a result of this storm. This bill would offer certain homeowners impacted by the remnants of Hurricane Ida temporary protections against foreclosure, and would require mortgage servicers to provide a temporary pause in the mortgage payment obligations of the storm-impacted homeowners.
The bill defines a "storm-impacted homeowner" as a person who holds a mortgage to a primary residence and, as a result of the damage to that primary residence due to Hurricane Ida: (1) is participating in the Homeowner Assistance and Recovery Program (HARP); (2) has applied to but was denied participation in HARP, solely based on HARP criteria excluding homes located in government-designated flood-hazard areas or floodways; (3) has applied to and is pending an award from the Mitigation Assistance Program; or (4) has been invited to participate or is participating in the Blue Acres Community Development Block Grant Disaster Recovery Program.
The bill permits eligible homeowners, meeting the requirements set forth in the bill, to apply to the Department of Community Affairs (department) for Certifications of Eligibility for Forbearance online through a system established by the department no later than 30 days after the date the department makes the application publicly available. The department would be required to review each application, as specified in the bill, to determine whether the applicant meets eligibility criteria demonstrating their need for assistance, and if they do, issue a Certification of Eligibility for Forbearance to the applicant, which would entitle the applicant to receive a one-year mortgage forbearance from their mortgage servicer. Any homeowner who is denied a Certification of Eligibility for Forbearance would be permitted to appeal that decision, and any homeowner who obtains a Certification of Eligibility for Forbearance but is denied a forbearance from a mortgage servicer licensed by the Department of Banking and Insurance would be permitted to file a complaint with that agency, which must investigate, and if appropriate, order the mortgage servicer to grant a forbearance.
The bill requires that, during forbearance, and during the subsequent time period constituting an extension of the mortgage, all terms and conditions of the original mortgage, except with regard to default and delinquency during forbearance, are to continue without modification, fees assessed, late penalties, or penalties for early repayment. The bill also requires a mortgage servicer to: submit certain information, as specified in the bill, related to any pending actions involving property granted a forbearance to the Superior Court Clerk’s Office; and, on a monthly basis, submit certain information on all forbearances that the mortgage servicer has provided within the State to the Department of Banking and Insurance, except as provided in the bill.
Further, a storm-impacted homeowner who is the subject of a foreclosure proceeding would be awarded, by the court and upon application by the property owner for good cause shown, a stay in the foreclosure proceedings. An application to the court by a storm-impacted homeowner would be required to be made prior to the first day of the sixth month following the effective date of the bill, unless the courts in their discretion permit application submission for a longer period. The award of a stay pursuant to the bill would conclude upon the earlier of: the conclusion of one year following the initial award of a stay of foreclosure proceedings; or January 1, 2026.
As amended by the committee, Assembly Bill No. 4871 is identical to Senate Bill No. 3670 (1R).
COMMITTEE AMENDMENTS:
The committee amended the bill to:
· define a "storm-impacted homeowner" as a person who holds a mortgage to a primary residence and, as a result of the damage to that primary residence due to Hurricane Ida: (1) is participating in the Homeowner Assistance and Recovery Program (HARP); (2) applied to but was denied participation in HARP, solely based on HARP criteria excluding homes located in government-designated flood-hazard areas or floodways; (3) has applied to and is pending an award from the Mitigation Assistance Program (MAP); or (4) has been invited to participate or is participating in the Blue Acres Community Development Block Disaster Recovery Program (Blue Acres);
· provide a definition for HARP, MAP, and Blue Acres, as used in the bill;
· require the Department of Community Affairs to review and make determinations concerning an application for a Certification of Eligibility for Forbearance within 90 days from the conclusion of the application period for storm-impacted homeowners set forth in the bill, instead of 60 days;
· authorize the Commissioner of Community Affairs (commissioner) to terminate a Certification of Eligibility for Forbearance and the mortgage-forbearance period if the commissioner determines that the storm-impacted homeowner made a false or misleading statement, misrepresentation, or omission of a material fact in any application or submission of information to the department;
· require the commissioner to provide notice to the storm-impacted homeowner of their right to a hearing to contest the termination; and
· make technical changes.