New Jersey Home Ownership Act of 2002 (NJHOSA)

Posted by kevin on March 11, 2010 under Foreclosure Blog | Comments are off for this article

The New Jersey Home Ownership Security Act of 2002, also known as NJHOSA, is a powerful, state statute which protects borrowers.

****NJHOSA applies to both purchase money mortgages (when you buy your home) and refinancings of no more than $350,000 as of the date of enactment, adjusted for inflation.  Currently, the ceiling is $4

The loan must be primarily for personal, family or household purposes, in which the loan is secured by a one to six family dwelling which is occupied by the owner as a principal residence, or a manufactured home occupied by a borrower as his or her principal residence.  So, NJHOSA does not apply to investment properties or vacation homes.

NJHOSA applies mortgage brokers and lenders.  Moreover, anyone who buys the loan from the lender can be subject to NJHOSA.

NJHOSA prohibits certain acts which relate to any applicable mortgage.  Examples of prohibited acts include charging a late fee of more than 5% of the amount of the payment past due, charging more than one late fee for a late payment, and charging for a payoff figure.

NJHOSA also sets up special rules for so-called high cost loans.  If a loan qualifies as a HOEPA high cost loan, either because of the interest rate or the points and fees charged, it is considered a high cost NJHOSA loan.  If the loan is a NJHOSA high cost loan, certain practices are prohibited which include negative amortization of the loan, establishing a default rate of interest, failure to make disclosures and failure to obtain credit counseling prior to the loan under certain conditions.

A substantial violation of NJHOSA can subject a lender or broker to damages including the agreed to finance charge, 10% of the principal amount of the loan, punitive damages, attorneys fees and costs.

A violation of NJHOSA is a violation of the NJ Consumer Fraud Act.  A borrower may elect damages under NJHOSA or damages for ascertainable loss, treble damages, punitive damages and attorneys fees under the NJ Consumer Fraud Act.

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