New Jersey § 46:10b-23

§ 46:10b-23.

The Legislature finds and declares that: a. Abusive mortgage lending has become an increasing problem in this State, exacerbating

the loss of equity in homes and causing an increase in the number of foreclosures

in recent years. One of the most common forms of abusive lending is the making of loans that are

equity-based, rather than income-based. The financing of points and fees in these loans provides immediate income to the

originator and encourages the repeated refinancing of home loans. The lender's ability to sell loans reduces the incentive to ensure that the homeowner

can afford the payments of the loan. As long as there is sufficient equity in the home, an abusive lender benefits even

if the borrower is unable to make the payments and is forced to refinance. In addition, the financing of high points and fees causes the loss of precious equity

in each refinancing and often leads to foreclosure. b. Abusive lending has threatened the viability of many communities and caused decreases

in home ownership. While the marketplace appears to operate effectively for conventional mortgages,

too many homeowners find themselves victims of overreaching lenders who provide loans

with unnecessarily high costs and terms that are unnecessary to secure repayment of

the loan. c. As competition and self-regulation have not eliminated the abusive terms from loans

secured by a consumer's home, the consumer protection provisions of this act are necessary

to encourage lending at reasonable rates with reasonable terms. d. Pursuant to this 2004 amendatory act, the “New Jersey Home Ownership Security Act

of 2002,” P.L.2003, c. 64 ( C.46:10B-22 et seq. ) was amended to delete the covered home loan category and the provisions of subsection

b. of section 4 of P.L.2003, c. 64 ( C.46:10B-25 ) which prohibited flipping a home loan. The deletions of the covered home loan category and of the prohibition on flipping

shall create no presumption that any home loan that has been refinanced is not unconscionable,

and the deletions of the covered home loan category and of the prohibition on flipping

shall create no presumption that any home loan that is refinanced does not constitute

an unlawful practice under P.L.1960, c. 39 ( C.56:8-1 et seq. ).