ASSEMBLY, No. 594

 

STATE OF NEW JERSEY

 

Introduced Pending Technical Review by Legislative Counsel

 

PRE-FILED FOR INTRODUCTION IN THE 1996 SESSION

 

 

By Assemblymen LUSTBADER and R. SMITH

 

 

An Act concerning the cancellation of mortgages of record, amending P.L.1975, c.137 and supplementing Title 46 of the Revised Statutes.

 

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

 

    1. Section 2 of P.L.1975, c.137 (C.46:18-11.3) is amended to read as follows:

    2. a. If the mortgagee, his agent or assigns fails to comply with the applicable provisions of section 1 of this act, the mortgagor may serve the mortgagee or his assigns with written notice of the noncompliance, which notice shall identify the mortgage and the date and means of its redemption, payment and satisfaction. If the mortgagee has not complied within 15 business days after receipt of the written notice from the mortgagor pursuant to this subsection a., the mortgagee or his assigns shall be subject to a fine of $50 per day for each day after the 15-day period until compliance, except that the total fine imposed pursuant to this subsection a. shall not exceed $1,000.

    b. Of each fine collected pursuant to subsection a. of this section, [25%]75% shall be payable to the [county clerk for deposit in the county treasury] Department of Banking, and [75%] 25% shall be payable to the mortgagor. The fine may be collected by summary proceedings instituted by the [county clerk] Commissioner of Banking or the Attorney General in accordance with "the penalty enforcement law" (N.J.S.2A:58-1 et seq.).

    c. If a mortgagee, his agent or assigns has not applied to the county recording officer to cancel the mortgage of record pursuant to section 1 of P.L.1975, c.137 (C.46:18-11.2), within the 15 business day period provided by subsection a. of this section, the mortgagee shall be liable to the mortgagor for the greater of the mortgagor's actual damages or the sum of $1,000, less any fines recovered by the mortgagor pursuant to subsections a. and b. of this section. In any successful action to recover damages pursuant to this subsection c., the mortgagee shall reimburse the mortgagor for the costs of the action including the mortgagor's reasonable attorneys' fees.

(cf: P.L.1991, c.289, s.3)

 

    2. (New section) On and after the effective date of P.L. , c. (C. )(now pending before the Legislature as this bill), any mortgage or security instrument that is registered or recorded pursuant to R.S.46:17-1 et seq. shall contain language stating that the provisions of P.L.1975, c.137 (C.46:18-11.2 et seq.) apply with respect to the cancellation of that mortgage of record.

 

    3. (New section) The Commissioner of Banking may promulgate regulations pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), necessary to effectuate the provisions of this act.

 

    4. This act shall take effect on the 90th day after enactment.

 

 

STATEMENT

 

    This bill requires, on and after its effective date, that any mortgage or security instrument registered or recorded pursuant to R.S.46:17-1 et seq. contain language stating that the provisions of P.L.1975, c.137 (C.46:18-11.2 et seq.) apply with respect to the cancellation of the mortgage of record. In addition, the Department of Banking, instead of the county clerk, is to be the recipient of 75% of each fine collected when a mortgagee, his agent or assignee fails to comply with the requirements for cancellation of a mortgage of record in a timely manner and the Commissioner of Banking, instead of the county clerk, is given authority to institute proceedings to collect any fines owed by a mortgagee, his agents or assigns.

 

 

 

Requires certain language to be included on any mortgage or security instrument registered or recorded pursuant to R.S.46:17-1 et seq.