ASSEMBLY, No. 3125

STATE OF NEW JERSEY

213th LEGISLATURE

 

INTRODUCED SEPTEMBER 22, 2008

 


 

Sponsored by:

Assemblyman RALPH R. CAPUTO

District 28 (Essex)

Assemblyman JOSEPH VAS

District 19 (Middlesex)

Assemblyman VINCENT PRIETO

District 32 (Bergen and Hudson)

 

Co-Sponsored by:

Assemblywoman Handlin

 

 

 

 

SYNOPSIS

     Allows municipalities to require mortgage lenders to maintain vacant residential properties during foreclosure.

 

CURRENT VERSION OF TEXT

     As introduced.

  


An Act concerning maintenance of residential properties during foreclosure and supplementing Title 40 of the Revised Statutes.

 

     Be It Enacted by the Senate and General Assembly of the State of New Jersey:

 

     1.  a.  A creditor that serves a notice of intention to foreclose on a mortgage on residential property in this State pursuant to the “Fair Foreclosure Act,” P.L.1995, c.244 (C.2A:50-53 et seq.), shall serve the public officer of the municipality in which the property is located, or, if the municipality has not designated a public officer pursuant to P.L.1942, c.112 (C.40:48-2.3 et seq.), the municipal clerk, with a copy of the notice at the same time that the creditor  serves the notice on the owner of the property.  The creditor shall include the full name and contact information of a person located within the State who is authorized to accept service on behalf of the creditor with the copy of the notice served on the public officer or municipal clerk.

     b.  If the residential property becomes vacant at any time after the creditor files the notice of intention to foreclose, but prior to vesting of title in any third party, and the municipality determines that the property is in violation of any applicable State or local housing code, the municipality may notify the creditor of the violation, by providing a copy  of the notice to  the person located within the State who is authorized to accept service on behalf of the creditor, and may require the creditor to correct the violation.

     c.  A municipality that requires a creditor to correct a violation pursuant to this act shall include a description of the conditions that gave rise to the violation with the notice of violation and shall provide a period of not less than 30 days from the creditor’s receipt of the notice for the creditor to remedy the violation. If the creditor fails to remedy the violation within that time period, the municipality may impose penalties allowed for the violation of municipal ordinances pursuant to R.S.40:49-5.

     d.  For the purposes of this section, “creditor” means a federal or State chartered bank, savings bank, savings and loan association or credit union, any person required to be licensed under the provisions of the “New Jersey Licensed Lenders Act,” P.L.1996, c.157 (C.17:11C-1 et seq.), and any entity acting on behalf of the creditor named in the debt obligation including, but not limited to, servicers.

 

     2.  This act shall take effect 60 days following enactment.


STATEMENT

 

     This bill allows a municipality to require a creditor who initiates a foreclosure proceeding against a residential property located in the municipality to maintain the property in accordance with State and local housing codes if the property becomes vacant during the foreclosure proceeding.

     The bill requires a creditor that serves a notice of intention to foreclose on a mortgage on residential property in this State pursuant to the “Fair Foreclosure Act,” P.L.1995, c.244 (C.2A:50-53 et seq.), to serve the public officer or municipal clerk of the municipality in which the property is located, with a copy of the notice at the same time that the creditor serves the notice on the owner of the property.  The creditor shall include the full name and contact information of a person located within the State who is authorized to accept service on behalf of the creditor with the copy of the notice served on the public officer or municipal clerk.

     The bill also provides that if the residential property becomes vacant at any time after the creditor files the notice of intention to foreclose, but prior to vesting of title in any third party, and the municipality determines that the property is in violation of any applicable State or local housing code, the municipality may provide the creditor with notice of the violation, and may require the creditor to correct the violation.

     Further, the bill provides that a municipality that requires a creditor to correct a violation pursuant to this bill shall include a description of the conditions that gave rise to the violation with the notice of violation and shall provide a period of not less than 30 days for the creditor to remedy the violation. If the creditor fails to remedy the violation within that time period, the bill allows the municipality to impose penalties currently allowed for the violation of municipal ordinances pursuant to R.S. 40:49-5.