Bill Text: NJ AR117 | 2018-2019 | Regular Session | Introduced
Bill Title: Urges Congress to address the accounting of mortgage escrow prepayments through requirements on federally-chartered financial institutions.
Spectrum: Partisan Bill (Democrat 5-0)
Status: (Passed) 2018-02-15 - Filed with Secretary of State [AR117 Detail]
Download: New_Jersey-2018-AR117-Introduced.html
Sponsored by:
Assemblyman ROY FREIMAN
District 16 (Hunterdon, Mercer, Middlesex and Somerset)
Assemblywoman JOANN DOWNEY
District 11 (Monmouth)
Assemblyman VINCENT MAZZEO
District 2 (Atlantic)
SYNOPSIS
Urges Congress to address the accounting of mortgage escrow prepayments through requirements on federally-chartered financial institutions.
CURRENT VERSION OF TEXT
As introduced.
An Assembly Resolution urging Congress to address the accounting of mortgage escrow prepayments through requirements on federally-chartered financial institutions.
Whereas, New federal income tax rules became effective in 2018 to limit the ability of taxpayers to deduct property taxes on their federal income tax returns beginning in tax year 2018; and
Whereas, In anticipation of the new federal rules, many New Jersey residents prepaid 2018 property taxes in 2017, in order to deduct those amounts on their federal income tax returns; and
Whereas, Many federally-chartered financial institutions hold mortgages for property owners residing in New Jersey and maintain mortgage escrow accounts for the purpose of paying property taxes to municipalities on behalf of their borrowers as quarterly tax payments become due; and
Whereas, Through the 2018 property tax prepayments made in 2017, federally-charted financial institutions have received and currently maintain a surplus of money in their borrowers' mortgage escrow accounts; and
Whereas, In their normal practices, federally-chartered financial institutions may not reconcile these surplus amounts in their mortgage escrow accounts until the end of 2018, thereby retaining more funds from mortgage borrowers than the amounts needed to ensure timely quarterly payments of property taxes to municipalities; and
Whereas, It is appropriate that Congress address this mortgage escrow prepayment issue, in order to ensure fairness for New Jersey homeowners, and homeowners in other states who are similarly situated, by acting to require federally-chartered financial institutions to immediately review and reconcile their mortgage escrow accounts, credit the accounts for amounts prepaid for property taxes in 2017, and make any appropriate reductions in the amount that the institutions require borrowers to maintain in the accounts, by taking into account the amounts already paid by borrowers to municipalities; now, therefore,
BE IT RESOLVED by the General Assembly of the State of New Jersey:
1. This House respectfully urges Congress to address the accounting of mortgage escrow prepayments by requiring federally-chartered financial institutions to immediately review and reconcile their borrowers' mortgage escrow accounts, credit the accounts for amounts prepaid for property taxes in 2017, and make any appropriate reductions in the amount that the institution requires borrowers to maintain in the accounts, by taking into account the amounts already paid by borrowers to municipalities.
2. Copies of this resolution, as filed with the Secretary of State, shall be transmitted by the Clerk of the General Assembly to the Speaker and Minority Leader of the United States House of Representatives, the Majority and Minority Leaders of the United States Senate, to each member of Congress elected from this State, and to the United States Secretary of the Treasury and the Treasurer of the State of New Jersey.
STATEMENT
This Assembly Resolution respectfully urges Congress to address the accounting of mortgage escrow prepayments by requiring federally-chartered financial institutions to immediately review and reconcile their borrowers' mortgage escrow accounts, credit the accounts for amounts prepaid for property taxes in 2017, and make any appropriate reductions in the amount that the institutions require borrowers to maintain in the accounts, by taking into account the amounts already paid by borrowers to municipalities.
