Sponsored by:
Assemblyman ROY FREIMAN
District 16 (Hunterdon, Mercer, Middlesex and Somerset)
Assemblyman ALEXANDER "AVI" SCHNALL
District 30 (Monmouth and Ocean)
Co-Sponsored by:
Assemblyman Sampson, Assemblywoman McCoy and Assemblyman Wainstein
SYNOPSIS
Clarifies mortgage loans to mean loans made primarily for personal, family, or household purposes.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning mortgage loans and amending P.L.1968, c.54.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Section 1 of P.L.1968, c.54 (C.46:10B-1) is amended to read as follows:
As used in this act:
(a) "Mortgage loan" means a loan made primarily for personal, family, or household purposes secured by an interest in real property consisting of land upon which is erected or to be erected, in whole or in part with the proceeds of such loan, a structure containing one, two, three, four, five or six dwelling units, a portion of which structure may be used for nonresidential purposes and upon which interest is taken or contracted for at a rate in excess of $6.00 for the forbearance of $100.00 for a year;
(b) "Mortgagor" includes any person other than a corporation liable for the payment of a mortgage loan, and the owner of the real property which secures the payment of a mortgage loan;
(c) "Prepayment" of a mortgage loan means the payment in full of the balance owing on a mortgage loan at any time prior to the time limited for the final payment of such loan in an instrument evidencing such loan.
(cf: P.L.1979, c.85, s.2)
2. This act shall take effect immediately and shall apply to mortgage loans entered into on or after this date.
STATEMENT
This bill amends existing law to clarify that mortgage loans are primarily made for personal, family, or household purposes. This bill intends to strengthen clarity in lending laws by confirming that consumer mortgage loans, made primarily for personal, family, or household purposes, are protected from prepayment penalties. The bill also modernizes lending frameworks by allowing prepayment penalty flexibility for commercial mortgage loans, supporting small real estate investors, and promoting economic growth.