ASSEMBLY, No. 370

STATE OF NEW JERSEY

214th LEGISLATURE

 

PRE-FILED FOR INTRODUCTION IN THE 2010 SESSION

 


 

Sponsored by:

Assemblyman  GARY S. SCHAER

District 36 (Bergen, Essex and Passaic)

Assemblyman  WAYNE P. DEANGELO

District 14 (Mercer and Middlesex)

 

 

 

 

SYNOPSIS

     Increases and clarifies permissible categories of fees chargeable by residential mortgage lenders and brokers.

 

CURRENT VERSION OF TEXT

     Introduced Pending Technical Review by Legislative Counsel

  


An Act concerning residential mortgage lender and broker fees, and amending P.L.2009, c.53.

 

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

 

     1.  Section 24 of P.L.2009, c.53 (C.17:11C-74) is amended to read as follows:

     24. a. Notwithstanding the provisions of any other law, a residential mortgage lender, incidental to the origination, processing and closing of any mortgage loan transaction not involving a secondary mortgage loan, shall have the right to charge only the following fees:  (1) credit report fee; (2) appraisal fee; (3) application fee, except that a residential mortgage lender shall not charge an application fee if a residential mortgage broker, pursuant to subsection b. of this section, charges an application fee in connection with the loan; (4) commitment fee; (5) warehouse fee; (6) fees necessary to reimburse the residential mortgage lender for charges imposed by third parties; [and] (7) discount points, which shall be disclosed as a percentage of the loan amount or a fraction thereof, payable to reduce the interest rate on that loan; (8) lock-in fee; and (9) origination fee, or alternatively, points, which shall be disclosed as a percentage of the loan amount or a fraction thereof.

     b. Notwithstanding the provisions of any other law, a residential mortgage broker, incidental to the brokering of any mortgage loan transaction not involving a secondary mortgage loan, shall have the right to charge only the following fees: (1) application fee; [and] (2) [discount points] (Deleted by amendment, P.L.    , c.   ) (pending before the Legislature as this bill); and (3) broker fees, which may be disclosed as a percentage of the loan amount or a fraction thereof, or as a flat fee, and a portion of which may be disclosed as an origination fee to meet Federal Housing Administration or Veterans Benefits Administration loan requirements and which shall be payable only at closing.

     c. No residential mortgage lender or residential mortgage broker may charge any fee either not expressly authorized by this section or authorized by the commissioner by regulation.

(cf: P.L.2009, c.53, s.24)

 

     2.  This act shall take effect immediately.


STATEMENT

 

     This bill increases and clarifies the permissible categories of fees chargeable by residential mortgage lenders and residential mortgage brokers.  The “New Jersey Residential Mortgage Lending Act,” sections 1 through 39 of P.L.2009, c.53 (C.17:11C-51 et seq.), created these new designations related to mortgage lending activities, and persons and entities will begin receiving licenses under these designations no later than July 31, 2010, or a later date approved by the Secretary of the United States Department of Housing and Urban Development, in accordance with the provisions of the act and applicable federal law.

     Under the bill, when combined with the existing statutory law, a residential mortgage lender, once licensed, may charge only the following fees in connection with any mortgage loan transaction not involving a secondary mortgage loan: (1) credit report fee; (2) appraisal fee; (3) application fee, except that a residential mortgage lender shall not charge an application fee if a residential mortgage broker, pursuant to the bill, charges an application fee in connection with the loan; (4) commitment fee; (5) warehouse fee; (6) fees necessary to reimburse the residential mortgage lender for charges imposed by third parties; (7) discount points, which shall be disclosed as a percentage of the loan amount or a fraction thereof, payable to reduce the interest rate on that loan; (8) lock-in fee; and (9) origination fee, or alternatively, points, which shall be disclosed as a percentage of the loan amount or a fraction thereof.

     Additionally, a residential mortgage broker, once licensed, may charge only the following fees in connection with any mortgage loan transaction not involving a secondary mortgage loan: (1) application fee; and (2) broker fees, which may be disclosed as a percentage of the loan amount or a fraction thereof, or as a flat fee, and a portion of which may be disclosed as an origination fee to meet Federal Housing Administration or Veterans Benefits Administration loan requirements, and which shall be payable only at closing.

     Unchanged by the bill is the authority of the Commissioner of Banking and Insurance to authorize by regulation mortgage lender or broker fees not expressly authorized under the statutory law.