ASSEMBLY FINANCIAL INSTITUTIONS AND INSURANCE
COMMITTEE
STATEMENT TO
[First Reprint]
SENATE, No. 3525
with committee amendments
STATE OF NEW JERSEY
DATED: DECEMBER 9, 2024
The Assembly Financial Institutions and Insurance Committee
reports favorably and with committee amendments Senate Bill No.
3525 (1R).
As amended, this bill requires financial institutions to allow
mortgagors to:
(1) for mortgagors who are in good standing on the mortgage:
(a) make biweekly mortgage payments, in which any amount
paid in excess of the total annual contractual mortgage payments
due shall be applied to the mortgage loan principal; and
(b) make semi-monthly mortgage payments in the amount of
half of the total monthly contractual mortgage payment due; and
(2) pay additional amounts to the mortgage loan principal,
without the imposition of any penalty.
Pursuant to the bill, if, at the time an escrow analysis is performed,
the analysis projects an escrow shortage or otherwise results in an
increase to escrow amount payments:
(1) the financial institution is required to notify the mortgagor of
the new contractual mortgage payment and adjust the amount of the
mortgagor’s recurring payment amount; and 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; and
(2) the mortgagor may elect to submit a payment or payments to
the financial institution to reduce or eliminate any projected escrow
shortage.
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 New Jersey law.
As amended and reported by the committee, Senate Bill No. 3525
(1R) is identical to Assembly Bill No. 4893 (1R), which was also
amended and reported by the committee on this date. 2
COMMITTEE AMENDMENTS :
The committee amended the bill to:
(1) stipulate that the requirement that financial institutions allow
mortgagors to make biweekly and semi-monthly payments applies
only to mortgagors in good standing;
(2) require a financial institution to take certain actions following
an escrow analysis that projects an escrow shortage or otherwise
results in an increase to escrow payments
(3) allow mortgagors with a projected escrow shortage to make
separate payments to reduce or eliminate the shortage; and
(4) make certain other technical changes.