SENATE COMMUNITY AND URBAN AFFAIRS COMMITTEE
STATEMENT TO
SENATE, No. 4117
STATE OF NEW JERSEY
DATED: JANUARY 4, 2024
The Senate Community and Urban Affairs Committee reports
favorably Senate Bill No. 4117.
This bill would establish 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 homeowner
who, as of August 31, 2021, occupied a residential property as the
homeowner’s primary residence, and who obtained federal disaster
assistance for disaster-related needs as a result of damage sustained to
the home due to the remnants of Hurricane Ida.
The bill directs a mortgage servicer to grant a mortgage
forbearance to a storm-impacted homeowner if the homeowner
submits a written request prior to the first day of the sixth month
following the enactment of the bill, affirming that the homeowner:
suffered a negative financial impact resulting from damage to
the homeowner’s primary residence due to the remnants of
Hurricane Ida, and obtained federal disaster assistance as a
result;
had a gross household income for 2022 that did not exceed
150 percent of the most recent area median income by zip
code; and
does not possess bank accounts that collectively contain more
than six months’ reserves of the homeowner’s gross
household income for 2021, although the mortgage servicer
may require the homeowner to provide a cash asset
certification to demonstrate compliance with this provision.
Upon receipt of a written request or verbal authorization for a
mortgage forbearance from a storm-impacted homeowner, the bill
would require a mortgage servicer to provide to the homeowner with a
mortgage forbearance and confirmation of this action in writing. The 2
mortgage forbearance period of a storm-impacted homeowner would
be one year. Fees, penalties, or interest, including attorney’s fees
beyond the amounts scheduled and calculated as if the storm-impacted
homeowner made all contractual payments on time and in full under
the terms of the mortgage contract, would not be assessed or accrue
during or as a result of a mortgage forbearance. A forbearance would
not impact property tax and insurance obligations. A mortgage
servicer that grants a forbearance pursuant to the bill would be
required to encourage owners to seek out certified housing counseling
and provide confirmation of the approval of the forbearance,
information concerning the process for forbearance, and information
on how to request a subsequent forbearance.
The bill prohibits a mortgage servicer from furnishing negative
mortgage payment information to a debt collector or credit reporting
agency related to mortgage payments subject to a mortgage
forbearance under the bill. In response to a complaint to the Attorney
General from an impacted homeowner, the Attorney General may
bring an action alleging a mortgage servicer has violated this
prohibition.
Under the bill, the repayment period of any mortgage subject to the
forbearance would be extended by the number of months the
forbearance is in effect. The payments not made during the months of
the forbearance would instead be due on a monthly basis during the
period constituting an extension of the mortgage, unless the property
owner chooses to make these payments earlier.
The restrictions on mortgage servicers in the bill would not apply
to any mortgage loans made, insured, securitized by, or serviced
through the policies of, the Federal National Mortgage Association,
the Federal Home Loan Mortgage Corporation, the Federal Housing
Administration of the United States Department of Housing and Urban
Development, the Department of Veterans Affairs, or the Rural
Housing Service. A storm-impacted homeowner denied a forbearance
under the bill by a mortgage servicer licensed by the Department of
Banking and Insurance (“DOBI”), and not a State- or nationally-
chartered financial institution, may file a complaint with DOBI. DOBI
would be required to investigate the complaint and, if appropriate,
would order the mortgage servicer to grant a forbearance to the
impacted homeowner.
To the extent required by the Administrative Director of the Courts
and DOBI, the bill would require a mortgage servicer to provide
information on the provision of forbearances to those entities.
Under the bill, 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, a stay in the foreclosure
proceedings if the conditions necessary to obtain a mortgage
forbearance are satisfied. An application to the court by a storm-
impacted homeowner would be required to be made prior to the first 3
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
July 1, 2024.
The bill would take effect immediately, and apply retroactively to
mortgage payments missed subsequent to September 1, 2021.