New Jersey § 18a:71c-31

§ 18a:71c-31.

a. The authority may declare an NJCLASS loan program loan to be in default when the

parties to the loan fail to meet the terms of the promissory note under circumstances

where it is reasonable for the authority to determine that the parties no longer intend,

or are no longer able, to honor the obligation to repay the loan or when the parties

fail to make installment payments when due, provided failure to repay persists for: (1) at least 180 days when payments are due monthly; or (2) at least 240 days when payments are due less frequently than monthly. b. Upon default, parties may become liable for the entire balance of the loan. c. To facilitate recovery on a defaulted NJCLASS loan program loan, the authority

shall offer parties to the defaulted loan the opportunity to enter into a settlement

agreement, either pre- or post- judgement, based on the terms of the loan and the

ability of the parties to the loan to make payments. (1) The authority's counsel shall respond to a request for a settlement agreement

within 15 business days of the request. (2) The authority's counsel shall provide parties with a proposed written settlement

agreement within 30 business days of reaching an oral agreement with the parties reflecting

the agreed upon terms. (3) For an NJCLASS loan program loan financed in whole or in part by bonds issued

by the authority pursuant to N.J.S.18A:71A-8 , the terms of the settlement agreement shall not violate the terms of the applicable

bond indentures. d. If parties to a defaulted NJCLASS loan program loan demonstrate to the authority

an ability and willingness to repay the loan by making nine on-time monthly payments

over the course of ten consecutive months pursuant to the settlement agreement, the

loan shall be considered rehabilitated for the limited purposes of meeting the requirements

of Title VI of the federal “Economic Growth, Regulatory Relief, and Consumer Protection

Act,” Pub.L.115-174. (1) If subsequent to rehabilitating the loan the parties fail to continue to honor

the obligations of the settlement agreement for at least 180 days, the loan may no

longer be considered rehabilitated. (2) A defaulted NJCLASS loan program loan may only be rehabilitated one time. e. The authority shall accurately report the status of defaulted loans to the credit

bureaus pursuant to the federal “Fair Credit Reporting Act” ( 15 U.S.C. s.1681s-2 ) and Title VI of the federal “Economic Growth, Regulatory Relief, and Consumer Protection

Act,” Pub.L.115-174.