Mortgage Protection Legislation Introduced

Mortgage Protection Legislation Introduced

Senator Kevin O’Toole introduced legislation today that would provide greater regulatory oversight and consumer protections for mortgages. The measure also strengthens prohibitions against predatory lending.

"This measure will provide fundamental protections for New Jersey families purchasing or refinancing homes," O’Toole stated. "Home ownership is the American dream, and we must take every possible step to ensure that it is safeguarded."

The bill would require lenders to verify a borrower’s ability to repay a loan by confirming the borrower’s income, outstanding debt and employment. The creditor must also provide to the borrower a written statement showing the amount of the loan, the length of the loan, maturity date, interest rate, the initial monthly payment, points to be paid and the loan amount expressed as a percentage of the borrower’s income. The creditor would be required to provide this information at least seven days prior to the closing of the loan.

The Commissioner of the Department of Banking and Insurance would gain the authority to license and conduct criminal background checks on mortgage solicitors. The bill also would require debt adjusters, foreclosure consultants, distressed property purchasers and credit counselors to be licensed.

"This is only the first step in a long list of initiatives to help families cope with the current housing crisis. I hope that my colleagues on both sides of the aisle recognize the critical nature of these reforms and move quickly to pass them into law," O’Toole concluded.