New Jersey § 46:10b-24

§ 46:10b-24.

As used in this act: “ Affiliate ” means any company that controls, is controlled by, or is under the common control

with any company, as set forth in 12 U.S.C. s.1841 et seq. “ Bona fide discount points ” means loan discount points which are: (1) Knowingly paid by the borrower; (2) Paid for the express purpose of reducing, and which result in a reduction of,

the interest rate or time-price differential applicable to the loan; (3) In fact reducing the interest rate or time-price differential applicable to the

loan from an interest rate which does not exceed the conventional mortgage rate for

a home loan secured by a first lien, by more than two percentage points, or for a

home loan secured by a junior lien, by more than three and one half percentage points;

and (4) Recouped within the first five years of the scheduled loan payments. Loan discount points will be considered to be recouped within the first five years

of the scheduled loan payments if the reduction in the interest rate that is achieved

by the payment of the loan discount points reduces the interest charged on the scheduled

payments such that the borrower's dollar amount of savings in interest over the first

five years is equal to or exceeds the dollar amount of loan discount points paid by

the borrower. “ Borrower ” means any natural person obligated to repay the loan, including a coborrower, cosigner,

or guarantor. “ Commissioner ” means the Commissioner of Banking and Insurance. “ Conventional mortgage rate ” means the most recently published annual yield on conventional mortgages published

by the Board of Governors of the Federal Reserve System, as published in Statistical

Release H.15 or any publication that may supersede it, as of the applicable time set

forth in 12 C.F.R. 226.32(a)(1)(i) . “ Conventional prepayment penalty ” means any prepayment penalty or fee that may be collected or charged in a home loan,

and that is authorized by law other than by this act, provided the home loan (1) does

not have an annual percentage rate that exceeds the conventional mortgage rate by

more than two percentage points; and (2) does not permit any prepayment fees or penalties

that exceed two percent of the amount prepaid. “ Creditor ” means a person who extends consumer credit that is subject to a finance charge or

is payable by written agreement in more than four installments, and to whom the obligation

is payable at any time. Creditor shall also mean any person brokering a home loan, which shall include any

person who directly or indirectly solicits, processes, places, or negotiates home

loans for others or who closes home loans which may be in the person's own name with

funds provided by others and which loans are thereafter assigned to the person providing

the funding of such loans, provided that creditor shall not include a person who is

an attorney providing legal services to the borrower or a person or entity holding

an individual or organization insurance producer license in the line of title insurance

or a title insurance company, as defined by subsection c. of section 1 of P.L.1975,

c. 106 ( C.17:46B-1 ), or any officer, director or employee thereof, providing services in the closing

of a home loan who is not also funding the home loan and is not an affiliate of the

creditor or an assignee that is subject to the provisions of section 6 of this act. “ Department ” means the Department of Banking and Insurance. “ High-cost home loan ” means a home loan for which the principal amount of the loan does not exceed $350,000,

which amount shall be adjusted annually to include the last published increase of

the housing component of the national Consumer Price Index, New York-Northeastern

New Jersey Region, in which the terms of the loan meet or exceed one or more of the

thresholds as defined in this section. “ Home loan ” means an extension of credit primarily for personal, family or household purposes,

including an open-end credit plan, other than a reverse mortgage transaction, in which

the loan is secured by: (1) A mortgage or deed of trust on real estate in this State upon which there is located

or there is to be located a one to six family dwelling which is or will be occupied

by a borrower as the borrower's principal dwelling; or (2) A security interest in a manufactured home which is or will be occupied by a borrower

as the borrower's principal dwelling. “ Manufactured home ” means a structure, transportable in one or more sections, which in the traveling

mode is eight body feet or more in width or 40 body feet or more in length or, when

erected on site is 320 or more square feet and which is built on a permanent chassis

and designed to be used as a dwelling with a permanent foundation when erected on

land secured in conjunction with the real property on which the manufactured home

is located and connected to the required utilities and includes the plumbing, heating,

air-conditioning and electrical systems contained therein; except that such term

shall include any structure which meets all the requirements of this paragraph except

the size requirements and with respect to which the manufacturer voluntarily files

a certification required by the Secretary of the United States Department of Housing

and Urban Development and complies with the standards established under the federal

National Manufactured Housing Construction and Safety Standards Act of 1974, 42 U.S.C. s.5401 et seq. Such term does not include rental property or second homes or manufactured homes

when not secured in conjunction with the real property on which the manufactured home

is located. “ Points and fees ” means: (1) All items listed in 15 U.S.C. s.1605(a)(1) through (4) , except interest or the time-price differential; (2) All charges listed in 15 U.S.C. s.1605(e) ; (3) All compensation paid directly or indirectly to a mortgage broker, including a

broker that originates a loan in its own name in a table-funded transaction; (4) The cost of all premiums financed by the creditor, directly or indirectly for

any credit life, credit disability, credit unemployment or credit property insurance,

or any other life or health insurance, or any payments financed by the creditor directly

or indirectly for any debt cancellation or suspension agreement or contract, except

that insurance premiums calculated and paid on a monthly basis shall not be considered

financed by the creditor; (5) The maximum prepayment fees and penalties that may be charged or collected under

the terms of the loan documents; (6) All prepayment fees or penalties that are incurred by the borrower if the loan

refinances a previous loan made or currently held by the same creditor or an affiliate

of the creditor , except that this paragraph shall not apply to a loan which refinances a previous

loan made by the same broker and funded by another creditor ; and (7) For open-end loans, the points and fees are calculated by adding the total points

and fees known at or before closing, including the maximum prepayment penalties which

may be charged or collected under the terms of the loan documents if prepayment penalties

are authorized by law other than by this act, plus the minimum additional fees the

borrower would be required to pay to draw down an amount equal to the total credit

line. “Points and fees” shall not include the following items: title insurance premiums

and fees, charges and premiums paid to a person or entity holding an individual or

organization insurance producer license in the line of title insurance or a title

insurance company, as defined by subsection c. of section 1 of P.L.1975, c. 106 ( C.17:46B-1 ); taxes, filing fees, and recording and other charges and fees paid or to be paid

to public officials for determining the existence of or for perfecting, releasing,

or satisfying a security interest; and reasonable fees paid to a person other than

a creditor or an affiliate of the creditor or to the mortgage broker or an affiliate

of the mortgage broker for the following, provided that the conditions in 12 C.F.R. s.226.4(c)(7) are met: fees for tax payment services; fees for flood certification; fees for

pest infestation and flood determinations; appraisal fees; fees for inspections

performed prior to closing; fees for credit reports; fees for surveys; attorneys'

fees; notary fees; escrow charges; and fire and flood insurance premiums, provided

that the conditions in 12 C.F.R. s.226.4(d)(2) are met. “ Rate ” means that annual percentage rate for the loan calculated at closing based on the

points and fees set forth in this act and according to the provisions of 15 U.S.C. s.1601 et seq. and the regulations promulgated thereunder by the Federal Reserve Board. “ Threshold ” means any one of the following two items, as defined: (1) “ Rate threshold ” means the annual percentage rate of the loan at the time the loan is consummated

such that the loan is considered a “mortgage” under section 152 of the federal “Home

Ownership and Equity Protection Act of 1994,” Pub.L. 103-325 ( 15 U.S.C. s.1602(aa) ), and the regulations promulgated by the Federal Reserve Board, including 12 C. F.R. s.226.32 , without regard to whether the loan transaction is or may be a “residential mortgage

transaction,” as defined in 12 C.F.R. s.226.2(a)(24) . (2) “ Total points and fees threshold ” means that the total points and fees payable by the borrower at or before the loan

closing, excluding either a conventional prepayment penalty or up to two bona fide

discount points, exceed: (a) 4.5% of the total loan amount if the total loan amount is $40,000 or more; or (b) the lesser of 6% of the total loan amount or $1,000, if the total loan amount

is less than $20,000, and 6% if the total loan amount is $20,000 or more but less

than $40,000. “ Total loan amount ” means the principal of the loan minus those points and fees as defined in this section

that are included in the principal amount of the loan. For open-end loans, the total loan amount shall be calculated using the total line

of credit allowed under the home loan.