Bill
S 3735
Extends Ida-affected homeowners’ relief by doubling forbearance to 24 months and extending foreclosure stays to two years (or until Jan 1, 2027).
Title: Extends foreclosure protections for certain homeowners impacted by remnants of Hurricane Ida
Jurisdiction: New Jersey
Purpose and main intent
- The bill extends foreclosure protections for homeowners affected by remnants of Hurricane Ida.
- Specifically, it lengthens the mortgage forbearance period from 1 year to 2 years and extends the duration of court-ordered stays in foreclosure proceedings from 1 year to 2 years, with a new end-date anchor of January 1, 2027 (instead of January 1, 2026).
Key provisions and changes
1) Certification of Eligibility for Forbearance (Section 2 of P.L.2024, c.85) – forbearance process
- Eligible homeowners (storm-impacted homeowners meeting defined criteria) may apply for a Certification of Eligibility for Forbearance.
- Online application system: The Department of Community Affairs (DCA) must publish filing instructions within 60 days and make the online system publicly available within 90 days after enactment. All applications must be submitted within 30 days after the system becomes publicly available.
- Eligibility criteria include:
- Meeting the definition of “storm-impacted homeowner” (as defined in the act)
- Having a current mortgage on the primary residence
- Submitting a complete application satisfying the act’s requirements
- Completeness and review process:
- The department has a 90-day review window from submission to determine completeness and eligibility.
- If incomplete, the applicant gets 15 days to resubmit; review timeline restarts from the original submission date.
- If deemed ineligible, the department issues a written notice with appeal rights.
- If the department does not act within 90 days after a complete submission, the applicant is deemed eligible and receives a Certification.
- Notification: Recipients must provide a copy of the Certification to their mortgage servicer.
2) Forbearance terms (Section 2, subsection e and related subsections)
- Duration: Forbearance period extends from 1 year to 2 years from the date of the Certification.
- Repayment terms (for the extended forbearance):
- The repayment period is extended by the number of months the forbearance was in effect.
- Missed payments during forbearance are due on a monthly basis during the extension unless paid earlier.
- Conditions during forbearance:
- Original mortgage terms remain largely in effect, with no additional fees (including attorney’s fees) for forbearance or late payments.
- Property taxes and insurance obligations are not reduced or altered by forbearance.
- The homeowner is responsible for property maintenance during the forbearance.
- Early termination and protections:
- Homeowners may discontinue forbearance at any time by written notice, waiving rights.
- The Commissioner may terminate the forbearance if a homeowner provides false or misleading information; right to a hearing is preserved under the Administrative Procedure Act.
- Foreclosure process protections:
- While in forbearance (and during the extension period), mortgage servicers cannot initiate foreclosure or issue notices of intent to foreclose on nonvacant properties, subject to existing exemptions.
- Foreclosure action deadlines for forbearance properties filed before the act’s effective date are tolled during the forbearance period.
3) Foreclosure stay in proceedings (Section 3 of P.L.2024, c.85)
- Storm-impacted homeowners subject to foreclosure may be granted a stay of foreclosure proceedings by the court upon application and good cause shown.
- Timing: Applications must generally be filed before the first day of the sixth month after the act’s effective date (unless the courts permit a longer period).
- Duration of stay: Previously capped at 1 year; under this bill, remains tied to the forbearance period and ends earlier of:
- Two years after the initial stay is granted; or
- January 1, 2027 (instead of 2026).
4) Administrative and transparency provisions
- DCA and Banking & Insurance Department oversight:
- The Department of Banking and Insurance (DOBI) may police complaints regarding servicer compliance, with the ability to order forbearances as appropriate.
- Mortgage servicers must provide docket numbers, party names, and property addresses to the Superior Court Clerk’s Office as required by the Administrative Director of Courts, and report forbearances to DOBI monthly (with personal identifiers redacted).
- Open records and non-discrimination:
- Forbearance data submitted to DOBI is subject to public records rules, with appropriate redactions.
- It is unlawful to discriminate in applying these provisions based on protected characteristics.
Effective date and retroactivity
- The act takes effect immediately and is retroactive to January 1, 2026.
Who is affected
- Storm-impacted homeowners defined under the original act (including those with current mortgages on primary residences).
- Mortgage servicers and lenders operating in New Jersey.
- Courts handling foreclosure stays and related proceedings.
- State agencies: Department of Community Affairs and Department of Banking and Insurance, with reporting to the judiciary as described.
Overall impact
- The bill broadens and extends foreclosure relief for Ida-affected homeowners by:
- Doubling permissible forbearance from 12 to 24 months.
- Extending the stay period in foreclosure actions to two years (or until Jan 1, 2027, whichever comes first).
- Maintaining protections against foreclosure during forbearance and ensuring administrative oversight and reporting.
Compiled from official sources — confirm details with the bill’s official record.
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