SENATE COMMUNITY AND URBAN AFFAIRS COMMITTEE

STATEMENT TO

SENATE, No. 3525

with committee amendments

STATE OF NEW JERSEY

DATED:  SEPTEMBER 30, 2024

      The Senate Community and Urban Affairs Committee reports favorably and with committee amendments Senate Bill No. 3525.

      As amended, this bill requires financial institutions to allow mortgagors, as defined in the bill, 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 also provides that, at the time of an escrow analysis, if increases in property taxes or insurance premiums result in increased required escrow payments, then the financial institution is to:

      (1)  advise the mortgagor of the new biweekly or bimonthly mortgage payments; and

      (2)  apply any additional amounts paid by the mortgagor first to any unsatisfied escrow payments and then to the mortgage loan principal, 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 State law.

COMMITTEE AMENDMENTS:

      The committee amended the bill to provide that, at the time of an escrow analysis, if there are certain cost increases that increase required escrow payments, the financial institution is to advise the mortgagor of the new payments and to apply any additional amounts paid by the mortgagor first to any unsatisfied escrow payments and then to the principal, without penalty.