SENATE BUDGET AND APPROPRIATIONS COMMITTEE
STATEMENT TO
[First Reprint]
ASSEMBLY, No. 2294
with committee amendments
STATE OF NEW JERSEY
DATED: JUNE 26, 2024
The Senate Budget and Appropriations Committee reports
favorably and with committee amendments Assembly Bill No. 2294
(1R).
As amended, 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;
• has a gross household income for 2022, that does 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. 2
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
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, information on
how to request a subsequent forbearance, and information about other
available relief programs.
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, unless the mortgage loan has been granted a
forbearance under the bill prior to being serviced by these entities. 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. 3
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
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.
The bill would take effect immediately, and apply retroactively to
mortgage payments missed subsequent to September 1, 2021.
As amended and reported by the committee, Assembly Bill No.
2294 (1R) is identical to Senate Bill No. 1443 (1R), which was also
amended and reported by the committee on this date.
COMMITTEE AMENDMENTS :
The committee amendments require mortgage servicers under the
bill to provide owners with information about other available relief
programs. The committee amendments further specify limited
conditions under which the bill would apply to loans serviced, made,
insured, or securitized by 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.
FISCAL IMPACT:
The Office of Legislative Services (OLS) anticipates that the one-
year mortgage forbearance granted to certain homeowners under the
bill will result in a one-year delay in State revenue collections by the
Housing and Mortgage Finance Agency and any other State entities
holding mortgage loans.
The OLS cannot determine the number of homeowners with
mortgages through State agencies who will request and be eligible for
mortgage forbearance, for how many months they will suspend
payment, or the amount of mortgage payments typically owed.
Therefore the amount of delayed revenues are indeterminate.
The OLS determines that there may be a State expenditure increase
as a result of the bill authorizing the Attorney General to bring an
action against a mortgage servicer alleged to have furnished negative
information to a debt collector or credit-reporting agency. These
violations may result in a State revenue increase associated with the
collection of fines, in the amount of $5,000 each under the bill. 4
The OLS finds there may also be a State expenditure increase
associated with the bill’s requirement that the Department of Banking
and Insurance investigate certain complaints made by storm-impacted
homeowners who were denied a forbearance.