Permits mortgage forbearance of 180 days for borrowers whose primary residence is in State-declared disaster area.
Summary
This bill requires residential mortgage lenders to provide mortgage forbearance to eligible borrowers whose primary residence is located in a Governor-declared disaster area in New Jersey. A borrower must request forbearance during the period the disaster area proclamation is in effect, and the lender must approve the request within 15 business days. Once approved, the forbearance lasts for 180 days, and the borrower may extend it for one additional 180-day period.
During the forbearance period, no penalties, fees, or interest may accrue on the residential mortgage. The bill defines the covered loans as residential mortgages secured by a primary residence of no more than four dwelling units, and it applies to lenders licensed under the New Jersey Residential Mortgage Lending Act as well as assignees of those loans. The borrower must repay the deferred payments later, through a loan extension, loan modification, or a payment deferral due at the end of the mortgage term. The Commissioner of Banking and Insurance is directed to adopt rules to implement the law.
Impact
The bill would add a new consumer protection requirement to Title 46 governing residential mortgage lending in disaster-affected areas. It would create a mandatory forbearance right for qualifying homeowners, impose a 15-business-day lender response deadline, prohibit the accrual of fees, penalties, and interest during the forbearance period, and require lenders to offer structured repayment options for deferred amounts. The Department of Banking and Insurance would also gain rulemaking authority to administer the program.
Sentiment
Based on the bill text and the absence of recorded committee testimony or votes, the measure appears to be framed as a homeowner relief and disaster-response bill. Its design suggests generally favorable policy intent toward borrowers facing temporary hardship after a state-declared disaster, with an emphasis on preserving housing stability and preventing immediate mortgage default. No contrary views are documented in the available materials.
Contention
The main potential point of contention is the burden placed on residential mortgage lenders, who would be required to grant forbearance quickly and without accruing interest, fees, or penalties during the relief period. Lenders may also be concerned about repayment timing, loan administration, and the operational impact of mandatory extensions, modifications, or deferrals. On the borrower side, the bill is favorable, but questions could arise about eligibility, the scope of disaster-area proclamations, and how the Commissioner of Banking and Insurance will define the request process and repayment structure.