46:10B-42 Period of extension for eligible foreclosed borrower.
7. a. Notwithstanding any law or contract right to the contrary, a creditor shall provide an eligible foreclosed borrower a period of extension for three years as provided in this section, during which foreclosure proceedings pursuant to the "Fair Foreclosure Act," P.L.1995, c.244 (C.2A:50-53 et al.) shall be suspended and the eligible foreclosed borrower shall continue to pay monthly payments, which shall include principal and interest, calculated at the introductory rate on the date that the introductory rate mortgage was originated, as well as amounts for taxes, insurance, and any other amounts being paid under the terms of the mortgage prior to the interest rate reset, provided the eligible foreclosed borrower completes and returns a certification of extension to the creditor in accordance with the provisions of this section.
b.In order to obtain the period of extension, the eligible foreclosed borrower shall provide to the creditor, no later than 90 days from the date that the creditor sends the notice required pursuant to paragraph (2) of subsection b. of section 6 of this act, a completed certification of extension form signed by the eligible foreclosed borrower, which contains:
(1)the name of the eligible foreclosed borrower;
(2)the address of the property; and
(3)an affirmative statement that the eligible foreclosed borrower:
(a)requests the period of extension;
(b)agrees to continue, during the period of extension, monthly payments which shall include principal and interest, calculated at the introductory rate on the date that the introductory rate mortgage was originated, as well as amounts for taxes, insurance, and any other amounts being paid under the terms of the mortgage prior to the interest rate reset;
(c)agrees to pay the creditor, at the time of full repayment of the introductory rate mortgage:
(i)any interest deferred on account of the period of extension;
(ii) any fees and costs incurred by the creditor in connection with the foreclosure proceeding; and
(iii) any arrearages owed to the creditor for monthly principal and interest payments, homeowners insurance payments, property tax payments, and any other payments that the eligible foreclosed borrower was required to pay, but failed to pay, under the terms of the introductory rate mortgage;
(d)agrees to accept the creditor's placement of a modification of mortgage on the property to secure the repayment of amounts owed pursuant to subparagraph (c) of this paragraph; and
(e)agrees to sign a modification of mortgage form that contains the terms of the period of extension and any documentation necessary to establish or record the modification of mortgage.
c.The creditor, upon receiving the completed certification of extension within the time period specified in subsection b. of this section, shall:
(1)grant the eligible foreclosed borrower the three-year period of extension, which shall commence no later than 30 days from the date that the creditor receives the eligible foreclosed borrower's completed certification of extension; and
(2)suspend the foreclosure proceeding that the creditor initiated pursuant to the "Fair Foreclosure Act," P.L.1995, c.244 (C.2A:50-53 et al.).
A creditor may grant relief pursuant to paragraphs (1) and (2) of this subsection, upon receipt of a completed certification of extension from an eligible foreclosed borrower after the time period specified in subsection b. of this section, in the sole discretion of the creditor.
d.Within a reasonable period of time after the receipt of a completed certification of extension from an eligible foreclosed borrower within the time period specified in subsection b. of this section, a creditor shall provide to the eligible foreclosed borrower a written acknowledgment that the certification of extension has been received. The acknowledgment shall contain the following:
(1)a statement that the foreclosure proceeding initiated pursuant to the "Fair Foreclosure Act," P.L.1995, c.244 (C.2A:50-53 et al.) will be suspended during the period of extension;
(2)the monthly payment amount that is due from the eligible foreclosed borrower during the period of extension, which shall include principal and interest, calculated at the introductory rate, on the date the introductory mortgage rate was originated, as well as amounts for taxes, insurance, and any other amounts being paid under the terms of the mortgage prior to the interest rate reset;
(3)a schedule of payments, indicating the date that the first monthly payment is due and the dates that each subsequent monthly payment is due during the period of extension;
(4)the address to which the eligible foreclosed borrower shall send the monthly payment; and
(5)a statement of proposed modification of mortgage, which shall include:
(a)a notice to the eligible foreclosed borrower that the creditor will place a modification of mortgage on the property that is the security for the introductory rate mortgage, to secure the eligible foreclosed borrower's repayment of the amounts provided for in paragraph (1) of subsection e. of this section; and
(b)an explanation of the method the creditor will use to calculate the amount of the interest deferred by the period of extension, and the amounts provided for in paragraph (1) of subsection e. of this section, for which repayment is secured by the modification of mortgage.
e. (1) A creditor that grants a period of extension to an eligible foreclosed borrower shall have the right to record a modification of mortgage on the eligible foreclosed borrower's property to secure the eligible foreclosed borrower's repayment of:
(a)the amount of interest deferred by the period of extension;
(b)any fees and costs already incurred in connection with the foreclosure proceeding; and
(c)any arrearages owed to the creditor for monthly payments of principal and interest, homeowner insurance payments, property tax payments, or any other payments that the eligible foreclosed borrower was required to pay, but failed to pay, under the terms of the introductory rate mortgage.
(2)The modification of mortgage shall be effective from the date that it is executed. Notwithstanding any other law to the contrary, the modification of mortgage shall have the same priority as the lien of the introductory rate mortgage. Upon payment by the eligible foreclosed borrower of the total amount of interest deferred pursuant to the period of extension, and any other amounts representing the arrearages for which the modification of mortgage secures repayment pursuant to this act, which shall only be due upon full repayment of the introductory rate mortgage, the creditor shall provide the eligible foreclosed borrower with a recordable satisfaction of the modification of mortgage, or otherwise cause the modification of mortgage to be discharged of record.
(3)If an eligible foreclosed borrower fails to return to a creditor, who has a right to record a modification of mortgage pursuant to paragraph (1) of this subsection, a properly executed modification of mortgage or any other documentation necessary to establish or record the modification of mortgage within 30 days from the borrower's receipt from the creditor of a modification of mortgage form, the creditor may record the eligible foreclosed borrower's certification of extension in place of the modification of mortgage. Notwithstanding any other law to the contrary, the certification of extension shall have the same priority as the lien of the introductory rate mortgage. Upon payment by the eligible foreclosed borrower of the total amount of interest deferred pursuant to the period of extension, and any other amounts representing the arrearages for which the certification of extension secures repayment pursuant to this act, the creditor shall provide the eligible foreclosed borrower with a recordable satisfaction of the certification of extension, or otherwise cause the certification of extension to be discharged of record.
f.A creditor shall not require an eligible foreclosed borrower to limit or waive the rights of the borrower to bring any claims, defenses, demands, proceedings, actions, or causes of action against the creditor as a condition of accepting an offer of any loss mitigation activities made available by the "Save New Jersey Homes Act of 2008," P.L.2008, c.86 (C.46:10B-36 et seq.).
g.An eligible foreclosed borrower who has been granted a period of extension shall forfeit all rights concerning deferment of interest payments, suspension of foreclosure, and deferment of payment of amounts secured by a modification of mortgage, provided by the provisions of this act if the eligible foreclosed borrower fails to make payments under the schedule of payments as set forth in the creditor's acknowledgment of the period of extension or fails to comply with the terms of the modification of mortgage entered into between the creditor and the eligible foreclosed borrower relating to the period of extension, such that the modification of mortgage becomes 60 days delinquent.
h.A court shall not approve an entry of final judgment in a foreclosure proceeding commenced pursuant to the "Fair Foreclosure Act," P.L.1995, c.244 (C.2A:50-53 et al.) as to an introductory rate mortgage unless the court is satisfied from the pleadings and certifications on file with the court that notice of the availability of the period of extension was provided to the eligible foreclosed borrower in accordance with the provisions of this act.
L.2008, c.86, s.7.
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Last modified: October 11, 2016