SENATE BUDGET AND APPROPRIATIONS COMMITTEE
STATEMENT TO
SENATE, No. 3670
with committee amendments
STATE OF NEW JERSEY
DATED: OCTOBER 7, 2024
The Senate Budget and Appropriations Committee reports
favorably and with committee amendments Senate Bill No. 3670.
As amended, this bill would provide 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 person who
holds a mortgage to a primary residence and, as a result of the damage
to that primary residence due to Hurricane Ida: (1) is participating in
the Homeowner Assistance and Recovery Program (HARP); (2) has
applied to but was denied participation in HARP, solely based on
HARP criteria excluding homes located in government-designated
flood-hazard areas or floodways; (3) has applied to and is pending an
award from the Mitigation Assistance Program; or (4) has been invited
to participate or is participating in the Blue Acres Community
Development Block Grant Disaster Recovery Program.
The bill permits eligible homeowners, meeting the requirements
set forth in the bill, to apply to the Department of Community Affairs
(department) for Certifications of Eligibility for Forbearance online
through a system established by the department no later than 30 days
after the date the department makes the application publicly available.
The department would be required to review each application, as
specified in the bill, to determine whether the applicant meets
eligibility criteria demonstrating their need for assistance, and if they
do, issue a Certification of Eligibility for Forbearance to the applicant,
which would entitle the applicant to receive a one-year mortgage
forbearance from their mortgage servicer. Any homeowner who is
denied a Certification of Eligibility for Forbearance would be
permitted to appeal that decision, and any homeowner who obtains a 2
Certification of Eligibility for Forbearance but is denied a forbearance
from a mortgage servicer licensed by the Department of Banking and
Insurance would be permitted to file a complaint with that agency,
which must investigate, and if appropriate, order the mortgage servicer
to grant a forbearance.
The bill requires that, during forbearance, and during the
subsequent time period constituting an extension of the mortgage, all
terms and conditions of the original mortgage, except with regard to
default and delinquency during forbearance, are to continue without
modification, fees assessed, late penalties, or penalties for early
repayment. The bill also requires a mortgage servicer to: submit
certain information, as specified in the bill, related to any pending
actions involving property granted a forbearance to the Superior Court
Clerk’s Office; and, on a monthly basis, submit certain information on
all forbearances that the mortgage servicer has provided within the
State to the Department of Banking and Insurance, except as provided
in the bill.
Further, 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 for good cause shown, a stay in the
foreclosure proceedings. 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.
COMMITTEE AMENDMENTS :
The committee amended the bill to:
(1) define a "storm-impacted homeowner" as a person who holds a
mortgage to a primary residence and, as a result of the damage to that
primary residence due to Hurricane Ida: (1) is participating in the
Homeowner Assistance and Recovery Program (HARP); (2) applied to
but was denied participation in HARP, solely based on HARP criteria
excluding homes located in government-designated flood-hazard areas
or floodways; (3) has applied to and is pending an award from the
Mitigation Assistance Program (MAP); or (4) has been invited to
participate or is participating in the Blue Acres Community
Development Block Disaster Recovery Program (Blue Acres);
(2) provide a definition for HARP, MAP, and Blue Acres, as used
in the bill;
(3) require the Department of Community Affairs to review and
make determinations concerning an application for a Certification of
Eligibility for Forbearance within 90 days from the conclusion of the
application period for storm-impacted homeowners set forth in the bill,
instead of 60 days; 3
(4) authorize the Commissioner of Community Affairs
(commissioner) to terminate a Certification of Eligibility for
Forbearance and the mortgage-forbearance period if the commissioner
determines that the storm-impacted homeowner made a false or
misleading statement, misrepresentation, or omission of a material fact
in any application or submission of information to the department;
(5) require the commissioner to provide notice to the storm-
impacted homeowner of their right to a hearing to contest the
termination; and
(6) make technical changes.
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 time-limited delay in State revenue collections
made 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 the mortgage forbearance, for how
many months they will suspend payment, or the amount of the
mortgage payments typically owed. Therefore, the timing and amount
of the delayed revenues are indeterminate.
The OLS determines that there may be an indeterminate State
expenditure increase as a result of administrative responsibilities
assigned to the Department of Community Affairs, which include
developing an online application, reviewing applications, awarding
Certifications of Eligibility for Forbearance, and conducting hearings
concerning certificates terminated by the commissioner.
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 and maintain certain
records.
The OLS finds that there may also be an indeterminate fiscal
impact on the Judiciary related to potential costs incurred and costs
avoided associated with stays in foreclosure proceedings allowed
pursuant to the bill.