New Jersey § 17:12b-159

§ 17:12b-159.

(1) (Deleted by amendment.) (2) Each such loan shall be evidenced by one or more notes, bonds or other written

evidence of indebtedness, and no security other than an interest in tangible personal

property, or a mortgage upon the real property shall be taken directly or indirectly

to secure the same prior to default. An interest in real property taken as security for a property improvement loan shall

not be deemed to be a mortgage loan within the meaning of Article X of this act 1 and shall not be subject to the provisions of that article. (3) (Deleted by amendment.) (4) Each loan as defined in section 158 of this act ( C. 17:12B-158 ) shall be repayable in regular installments payable at least quarterly over a period

not exceeding 20 years and 32 days subsequent to the making of such loan. The amount of any installment shall not be greater or less than any other installment,

except that the first installment or last installment, or first and last installments

may be in an amount other than that of a regular installment, but any such installment

shall not be less than one-half of, nor more than one and one-half times the amount

of the regular installment. An association which makes a loan as defined in section 158 of P.L.1963, c. 144

( C. 17:12B-158 ) shall not require that more than one installment be payable in any one payment period,

except that the last two installments may be payable in the same payment period. Every such loan shall provide for payment periods of equal duration measured in

terms of weeks or months, except that the period scheduled to elapse between the making

of the loan and the date when the first installment is scheduled to be paid, hereinafter

in this paragraph referred to as “the initial payment period” may be longer than any

other payment period, but may not exceed 120 days. Any such loan may provide for the omission of installments during any period not

exceeding 120 days in any one 12-month period. When the period during which installments are so omitted falls within or coincides

with the initial payment period as hereinabove defined, the initial payment period

may be longer than any other payment period, but may not exceed 120 days. (5) Nothing in this section shall prevent an association from making a loan as defined

in section 158 of P.L.1963, c. 144 ( C. 17:12B-158 ), the proceeds of which will be applied in whole or in part to the repayment at or

before final maturity of a loan theretofore made under the provisions of this section. (6) An association which makes a loan as defined in section 158 of P.L.1963, c. 144

( C. 17:12B-158 ) may, (a) When the payment of such loan is secured, and provision is made by law for the

filing or recording to the instrument of security or notice or abstract thereof, require

compliance with such provision and retain the cost of such recording or filing out

of the proceeds of the loan but shall make no other charges in connection with the

preparation of such mortgage or other security instruments; and (b) When the maturity of the unpaid balance of the loan is accelerated, in accordance

with the terms of the instrument evidencing the obligation, charge interest at a rate

not exceeding the rate charged on the loan, from the date such acceleration takes

place, upon the difference between the amount of the unpaid principal balance of the

loan, and the amount of credit given pursuant to section 163 ( C. 17:12B-163 ). No association shall make any further interest or charge or demand, in connection

with such loan, other than those expressly authorized by sections 159 through 164

( C. 17:12B-159 through C. 17:12B-164 ) of this act, except an association may charge interest at a rate not exceeding the

rate charged on the loan upon each installment in arrears for the period from the

date that default in the payment of such installment occurs to the date that payment

of such installment is made; or, if the maturity of the unpaid balance of the loan

is accelerated, as provided in this section, to the date upon which such acceleration

takes place. In lieu of providing for interest pursuant to this paragraph (b), such instrument

may provide that on any installment in arrears for more than 15 days, the association

may make a late charge which shall not exceed 5% of such installment, or $5.00 whichever

is the lesser; provided that only one such late charge shall be made on any one installment

and that no such late charge shall be made upon any installment scheduled, by the

terms of such instrument, to fall due upon a date subsequent to the date upon which

the maturity of the unpaid balance of the loan is accelerated as provided by this

section. (c) No person who is a party to the instrument evidencing the loan shall be released

or discharged from liability to the association by reason of the association's extending

the time for the payment of an installment or installments owing or due upon such

loan, or by reason of the association's waiver of any term or condition of the instrument

evidencing such loan, or of the instrument intended to secure payment thereof. (d) All parties to the instrument evidencing the loan may waive presentation for payment,

demand for payment, protest and notice of protest, nonpayment, dishonor, and the association's

election to accelerate the maturity of the unpaid balance of the loan. For the purposes of this section, (i) “ Unpaid principal balance ” of a loan means the face amount of the note evidencing such loan, less the aggregate

of all installments paid thereon, plus the cost of any insurance paid for by the association

pursuant to paragraph (f) of subsection (6) of this section, after crediting against

such cost the amount of the return premium, if any, received by the association on

cancellation of prior insurance paid for by the borrower or the cost of which was

retained out of the proceeds of the loan; (ii) “ Unpaid balance ” of a loan means the unpaid principal balance of such loan, plus unpaid interest

and late charges, if any. (e) Require one or more comakers or endorsers of the instrument evidencing a loan,

or one or more guarantors of payment of the loan; (f) When the payment of such loan is secured, require that such security be insured

for the benefit of the association against such loss or damage as the association

may require, and may retain out of the proceeds of such loan the premium for such

insurance. If such insurance expires, lapses, or is canceled and other insurance by insurers

and in amounts satisfactory to the association is not furnished to the association

without lapse of coverage, the association may, but shall be under no duty to, obtain

insurance upon such security, and the cost thereof, less the amount of the return

premium, if any, received by the association on cancellation of prior insurance paid

for by the borrower, or the cost of which was retained out of the proceeds of the

loan, shall be added to and become part of the principal of such loan, payable upon

demand with interest at the legal rate; and, in default of such payment within 30

days after such demand, the entire unpaid balance of the loan shall, at the election

of the association become immediately due and payable; (g) Upon institution of a suit for the collection of a loan in default, charge a collection

fee, in addition to court costs allowable by law, equal to 10% of the unpaid balance

of the loan, but in no case shall such collection fee exceed $100.00; (h) Extend the scheduled due date of any loan and defer the scheduled due date of

any or all installment payments, or reduce the amount of any or all installments and

may, as a consideration therefor, make a total additional charge not to exceed the

amount ascertained under the provisions of section 160 ( C. 17:12B-160 ). 1

N.J.S.A. § 17:12B-145 et seq.