Permits mortgage forbearance of 180 days for borrowers whose primary residence is in State-declared disaster area.
This bill creates a mandatory mortgage forbearance program for certain homeowners whose primary residence is located in a Governor-declared disaster area. A qualifying borrower may request forbearance from the residential mortgage lender during the period the disaster declaration is in effect, and the lender must approve the request within 15 business days. The forbearance lasts 180 days and may be extended once for an additional 180 days at the borrower’s option.
During the forbearance period, no penalties, fees, or interest may accrue on the residential mortgage. After the forbearance ends, the borrower must repay the deferred payments, but the bill requires that repayment be structured through one of three methods: an extension of the loan term, a loan modification, or a payment deferral due at the end of the mortgage term. The bill applies to residential mortgages secured on or after the date of enactment and directs the Commissioner of Banking and Insurance to adopt implementing regulations.
The bill would add a new consumer-protection requirement to Title 46 governing residential mortgage lending in New Jersey, specifically for mortgages on primary residences in state-declared disaster areas. It would impose a mandatory approval timeline on mortgage lenders, prohibit the accrual of penalties, fees, and interest during the forbearance period, and require lenders to accommodate repayment through extension, modification, or deferred payment terms. The Department of Banking and Insurance would also gain rulemaking responsibility to implement the program.
Based on the bill text and the absence of recorded committee testimony or votes, the measure appears designed as homeowner relief legislation and is likely to be viewed favorably as a disaster-response consumer protection. Its structure suggests a strong policy preference for helping borrowers avoid immediate mortgage distress after a declared emergency while preserving eventual repayment obligations. No contrary positions are documented in the available materials.
The main potential points of contention are the mandatory nature of lender approval, the prohibition on accruing interest, fees, or penalties during forbearance, and the requirement that lenders restructure repayment in specified ways. Lenders and mortgage servicers may view these provisions as operationally burdensome or financially restrictive, while borrower advocates would likely support them as necessary relief for disaster-affected homeowners. Another possible issue is the bill’s application only to primary residences in Governor-declared disaster areas, which may limit coverage for some affected borrowers.