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Bill

S 4235

Permits mortgage forbearance of 180 days for borrowers whose primary residence is in State-declared disaster area.

2026-2027 Regular Session Introduced by Benjie Wimberly

NJ offers a 180-day (extendable) mortgage forbearance for primary residences in disaster areas, with no interest/fees during forbearance and repayment via loan extension, modificat

Introduced in the Senate, Referred to Senate Commerce Committee
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Bill Summary · S 4235

Summary of Bill S 4235 (Session 222) – New Jersey

Purpose and intent

  • Establish a state-level mortgage forbearance program for borrowers whose primary residence is located in a state-declared disaster area.
  • Allow a 180-day forbearance period with an option to extend for another 180 days, during which no penalties, fees, or interest accrue.
  • Outline repayment options after forbearance and set procedural requirements for lender action.

Key provisions

  • Definitions (Section 1)

    • Borrower: natural person obligated to repay a loan secured by a residential mortgage.
    • Mortgage forbearance: temporary pause of residential mortgage payments.
    • Residential mortgage: mortgage or similar security on a residential property with up to four units used as a primary residence.
    • Residential mortgage lender: any licensed entity under the New Jersey Residential Mortgage Lending Act that holds or services the mortgage.

  • Eligibility and process (Section 2)

    • A borrower is eligible if: 1) their primary residence is in a New Jersey area proclaimed by the Governor as a disaster area; and 2) they submit a forbearance request to their residential mortgage lender during the disaster- proclamation period.
    • Lender processing requirement: the lender must approve the forbearance request within 15 business days.
    • Forbearance term:
    • Initial period: 180 days.
    • Borrower may opt to extend for an additional 180 days.
    • During forbearance, no penalties, fees, or interest accrue on the forborne payments.

  • Repayment after forbearance (Section 3)

    • Borrower must repay the forborne payments.
    • Repayment options through which the forborne amounts can be structured:
    • (1) extension of the existing mortgage loan,
    • (2) modification of the mortgage loan,
    • (3) a payment deferral due at the end of the loan term.

  • Regulatory authority (Section 4)

    • The Commissioner of Banking and Insurance must adopt rules and regulations to implement the act under the Administrative Procedure Act.

  • Effective date and scope (Section 5)

    • The act takes effect on the 90th day after enactment.
    • Applies to residential mortgages secured on or after the date of enactment.

Who is affected

  • Primary residential mortgage borrowers located in New Jersey areas designated as disaster areas by the Governor.
  • Residential mortgage lenders operating under the New Jersey Residential Mortgage Lending Act.
  • Borrowers and lenders must coordinate within the 15-business-day approval window and follow approved repayment structures post-forbearance.

Timeline and procedural notes

  • Disaster area determination is based on Governor's proclamation; forbearance eligibility is tied to that designation.
  • Borrowers must submit forbearance requests during the disaster proclamation period.
  • Lenders have a 15-business-day window to approve the forbearance.
  • Forbearance term begins upon approval and lasts 180 days, with potential 180-day extension.
  • Regulations to implement the act will be issued by the Commissioner of Banking and Insurance under the Administrative Procedure Act.
  • The act becomes effective 90 days after enactment and applies to mortgages secured on or after enactment.

Potential impact and considerations

  • Provides a standardized, time-bound relief option for disaster-affected homeowners, potentially reducing delinquency risk during declared emergencies.
  • Clarifies that no interest or fees accrue during forbearance, but requires repayment through a later loan extension, modification, or deferral.
  • Shifts some administrative focus to lenders to process requests promptly and to the Commissioner to regulate implementation.
  • The scope is limited to primary residences in state-declared disaster areas and to loans governed by New Jersey’s residential mortgage lending framework.

Compiled from official sources — confirm details with the bill’s official record.

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