New Jersey Assembly Bill A2294

Overview

The New Jersey Assembly Bill A2294, sponsored by Assemblywoman Yvonne Lopez, Assemblyman Roy Freiman, and Assemblyman Chris Tully, aims to provide mortgage payment relief and foreclosure protection to homeowners affected by the remnants of Hurricane Ida. The bill is designed to offer temporary financial relief and protect affected homeowners from foreclosure actions.

Key Provisions

1. Eligibility for Mortgage Forbearance:
   • The bill defines a “storm-impacted homeowner” as one who, as of August 31, 2021, occupied their property as a primary residence and received federal disaster assistance due to Hurricane Ida.
   • Homeowners must affirm their financial impact from Hurricane Ida, their gross household income does not exceed 150% of the area median income, and their bank accounts contain less than six months’ reserves of their gross household income for 2021.
2. Forbearance Process:
   • Eligible homeowners can request mortgage forbearance from their mortgage servicer within six months of the bill’s enactment.
   • Mortgage servicers must provide written confirmation of the forbearance, which will last one year.
   • No additional fees, penalties, or interest will accrue during the forbearance period.
   • Property tax and insurance obligations remain unaffected.
3. Protections Against Foreclosure:
   • During the forbearance period, mortgage servicers cannot initiate foreclosure proceedings or send notices of intent to foreclose.
   • The repayment period of the mortgage will be extended by the number of months of forbearance.
4. Credit Protection:
   • Mortgage servicers are prohibited from reporting negative mortgage payment information to credit agencies during the forbearance period.
   • The Attorney General can take action against servicers violating this provision, including fines and mandates to correct credit reports.
5. Additional Measures:
   • Mortgage servicers must encourage homeowners to seek HUD-certified housing counseling.
   • The bill does not apply to federally backed mortgages (e.g., Fannie Mae, Freddie Mac, FHA loans).
   • Homeowners denied forbearance by certain licensed servicers can file a complaint with the Department of Banking and Insurance (DOBI), which will investigate and potentially order forbearance.
6. Retroactive Application:
   • The bill applies retroactively to missed mortgage payments from September 1, 2021, onwards.

Key Takeaways

1. Mortgage Forbearance Eligibility: Homeowners affected by Hurricane Ida can apply for a one-year mortgage forbearance if they meet specific financial criteria.
2. Foreclosure Protection: The bill prevents foreclosure actions against eligible homeowners during forbearance.
3. Credit Reporting Safeguards: Negative mortgage payment information cannot be reported to credit agencies during the forbearance.
4. Extended Repayment Period: The mortgage repayment period will be extended by the duration of the forbearance.
5. Immediate Effect: The bill takes effect immediately and applies retroactively to payments missed since September 2021.

This legislative measure aims to provide crucial financial relief and stability to those significantly impacted by the severe weather event, ensuring they have time to recover without the threat of losing their homes.

To read the full bill please click here: 2294_I1