Bill Text: NJ A3948 | 2020-2021 | Regular Session | Introduced


Bill Title: Concerns mortgage and loan forbearance, rent suspension, and consumer reporting during coronavirus disease 2019 pandemic.

Spectrum: Partisan Bill (Democrat 8-0)

Status: (Introduced) 2020-04-13 - Introduced, Referred to Assembly Financial Institutions and Insurance Committee [A3948 Detail]

Download: New_Jersey-2020-A3948-Introduced.html

ASSEMBLY, No. 3948

STATE OF NEW JERSEY

219th LEGISLATURE

 

INTRODUCED APRIL 13, 2020

 


 

Sponsored by:

Assemblywoman  BRITNEE N. TIMBERLAKE

District 34 (Essex and Passaic)

 

 

 

 

SYNOPSIS

     Concerns mortgage and loan forbearance, rent suspension, and consumer reporting during coronavirus disease 2019 pandemic.

 

CURRENT VERSION OF TEXT

     As introduced.

 


An Act concerning mortgage and loan forbearance, rent suspension, and consumer reporting.

 

     Be It Enacted by the Senate and General Assembly of the State of New Jersey:

 

     1.    a.  Notwithstanding the provisions of any other law, rule or regulation to the contrary, during the covered period a property owner may request, and shall be granted, a mortgage forbearance.  The mortgage forbearance period of a property owner shall be 90 days.  A property owner may request, and shall be granted, a subsequent forbearance period of 90 days, for a total of not more than 180 days.  No property owner requesting a forbearance pursuant to this section shall be required to provide proof of economic hardship.

     b.  Notwithstanding the provisions of any law, rule, or regulation to the contrary, the repayment period of any mortgage subject to the forbearance established pursuant to this section shall be extended by the number of months the forbearance is in effect.  During the time of the forbearance, and during the period constituting an extension of the mortgage, all terms and conditions of the original mortgage, except with regard to default and delinquency during forbearance, shall continue without modification, and there shall be no fees assessed related to the forbearance or late payment, or penalty for early repayment.

     c.  A mortgagee that grants a mortgage forbearance pursuant to this section shall encourage owners to seek out United States Department of Housing and Urban Development certified housing counseling and shall provide to the property owner confirmation of the approval of the forbearance, information concerning the process for forbearance, and information on how to request a subsequent forbearance.

     d.  No foreclosure proceeding or eviction may be initiated for the period of 90 days following the Public Health Emergency and State of Emergency declared by the Governor in Executive Order 103, March 9, 2020.

     e.  Nothing in this section shall be construed to impact property tax and insurance obligations of an owner related to any real property in the State.

     f.     No later than one month following the effective date of this act, the commissioner shall:

     (1)   notify owners of the forbearance program;

     (2)   encourage owners to seek out United States Department of Housing and Urban Development certified housing counseling; and

     (3)   post information on eligibility and the process for the forbearance on the department's Internet website.

     g.    As used in this section:

     "Commissioner" means the Commissioner of Community Affairs.

     "Covered period" means the period during which the Public Health Emergency and State of Emergency declared by the Governor in Executive Order 103, March 9, 2020 are in effect and concluding six months following the conclusion of the State of Emergency or Public Health Emergency, whichever is earlier.

     "Department" means the Department of Community Affairs.

     "Forbearance" means a period of time during which obligations for loan and interest payments are suspended.

 

     2.    a.  Notwithstanding any other law, ordinance, rule, or  regulation to the contrary, during the covered period a landlord shall suspend rent, for a period of 90 days, upon request to the landlord from a residential tenant.  A residential tenant may request, and shall be granted, a subsequent 90 day suspension of rent, for a total of not more than 180 days.  The period of suspension of rent shall begin on the first day of the next month following the request for suspension of rent.  The landlord shall notify the tenant in writing of the date on which rent payments are to resume.  No residential tenant requesting a suspension of rent pursuant to this section shall be required to provide proof of economic hardship.  A residential tenant may request a suspension of rent pursuant to this section in writing or by electronic transmission.

     A residential tenant with rent suspended pursuant to this section shall not be required to pay a fee related to the suspension or late payment or to pay the balance of the suspended rent upon the conclusion of the suspension of rent.  Nothing in this section shall prohibit a landlord and a residential tenant from establishing a payment plan for the balance of suspended rent or from applying the security deposit to that balance.  Unless otherwise stipulated by the landlord and the residential tenant, the payment period of any rent subject to suspension shall be extended by the number of months the suspension is in effect.

     b.    A violation of the provisions of this section shall be an unlawful practice and a violation of P.L.1960, c.39 (C.56:8-1 et seq.).

     c.  As used in this section:

     "Covered period" means the period during which the Public Health Emergency and State of Emergency declared by the Governor in Executive Order 103, March 9, 2020 are in effect and concluding six months following the conclusion of the State of Emergency or Public Health Emergency, whichever is earlier.

     "Electronic transmission" means any form of communication, not directly involving the physical transmission of paper, that creates a record that may be retained, retrieved and reviewed by a recipient, and that may be directly reproduced in paper form by that recipient through an automated process.

     "Residential tenant" means an individual that legally occupies a dwelling.

     3.    a.  Notwithstanding any other law, ordinance, rule, or  regulation to the contrary, during the covered period a landlord shall suspend rent, for a period of 90 days, upon request to the landlord from a small business commercial tenant.  A small business commercial tenant may request, and shall be granted, a subsequent 90 day suspension of rent, for a total of not more than 180 days.  The period of suspension of rent shall begin on the first day of the next month following the request for suspension of rent.  The landlord shall notify the tenant in writing of the date on which rent payments are to resume.  No small business commercial tenant requesting a suspension of rent pursuant to this section shall be required to provide proof of economic hardship.  A small business commercial tenant may request a suspension of rent pursuant to this section in writing or by electronic transmission.

     A small business commercial tenant with rent suspended pursuant to this section shall not be required to pay a fee related to the suspension or late payment or to pay the balance of the suspended rent upon the conclusion of the suspension of rent.  Nothing in this section shall prohibit a landlord and a small business commercial tenant from establishing a payment plan for the balance of suspended rent or from applying the security deposit to that balance.  Unless otherwise stipulated by the landlord and the small business commercial tenant, the payment period of any rent subject to suspension shall be extended by the number of months the suspension is in effect.

     A small business commercial tenant whose lease expires during this time period shall be subject to an automatic lease renewal at the current rent charged unless the landlord provides written proof, dated prior to the issuance of Executive Order 103 on March 9, 2020, of intent not to renew the lease due to the prospective sale of the property, initiated court proceedings, conflict, or lack of rent payments.  A landlord that provides proof of intent not to renew the lease pursuant to this subsection shall place the small business commercial tenant on a lease from month to month and shall not initiate an eviction for the period of 90 days following the Public Health Emergency and State of Emergency declared by the Governor in Executive Order 103, March 9, 2020.  No late fees may be assessed for rent accrued during the covered period.

     b.    A violation of the provisions of this section shall be an unlawful practice and a violation of P.L.1960, c.39 (C.56:8-1 et seq.).

     c.  As used in this section:

     "Covered period" means the period during which the Public Health Emergency and State of Emergency declared by the Governor in Executive Order 103, March 9, 2020 are in effect and concluding six months following the conclusion of the State of Emergency or Public Health Emergency, whichever is earlier.

     "Electronic transmission" means any form of communication, not directly involving the physical transmission of paper, that creates a record that may be retained, retrieved and reviewed by a recipient, and that may be directly reproduced in paper form by that recipient through an automated process.

     "Small business commercial tenant" means a business entity that legally occupies real property, is independently owned and operated, operates primarily within this State, and which satisfies other criteria that may be established by the Commissioner of Community Affairs.

 

     4.    a.  Notwithstanding the provisions of any other law, rule or regulation to the contrary, during the covered period a borrower may request, and shall be granted, forbearance on any commercial, student, or other consumer loan, including an extension of credit.  The forbearance period of a borrower shall be 180 days.  No borrower requesting a forbearance pursuant to this section shall be required to provide proof of economic hardship.

     b.  Notwithstanding the provisions of any law, rule, or regulation to the contrary, the repayment period of any loan subject to the forbearance established pursuant to this section shall be extended by the number of months the forbearance is in effect.  During the time of the forbearance, and during the period constituting an extension of the loan, all terms and conditions of the original loan, except with regard to default and delinquency during forbearance, shall continue without modification, and there shall be no fees assessed for the forbearance, or penalty for early repayment.  No interest shall accrue on student loans granted forbearance pursuant to the provisions of this section.

     c.     The Commissioner of Banking and Insurance shall develop separate, specific guidelines for the forbearance of student loans, extensions of credit, and other consumer loans.

     d.    As used in this section:

     "Borrower" means a person who is named as a borrower or debtor in a commercial, consumer, student, or other consumer loan or extension of credit.

     "Covered period" means the period during which the Public Health Emergency and State of Emergency declared by the Governor in Executive Order 103, March 9, 2020 are in effect and concluding six months following the conclusion of the State of Emergency or Public Health Emergency, whichever is earlier.

     "Forbearance" means a period of time during which obligations for loan and interest payments are suspended.

 

     5.    a.  (1)  No consumer reporting agency shall include any adverse information that is a result of the coronavirus disease 2019 pandemic in a consumer report pertaining to an affected person who provides the agency with notice pursuant to subsection b. of this section.

     (2)   No user of a consumer report shall consider any adverse information that is a result of the coronavirus disease 2019 pandemic in a consumer report pertaining to an affected person who provides the user with notice pursuant to subsection b. of this section.

     b.    (1) An affected person may contact any consumer reporting agency and request that the agency disregard any adverse information related to the person obtained by the agency with respect to the period beginning with the Public Health Emergency and State of Emergency declared by the Governor in Executive Order 103 of 2020 and extending 90 days following the end of that public health emergency and state of emergency.

     (2)   Any consumer reporting agency that receives a request pursuant to paragraph (1) of this subsection shall respond to the affected person and the Director of the Division of Consumer Affairs in the Department of Law and Public Safety within five days of receiving the request.

     (3)   An affected person may contact any user of a consumer report and request that the user disregard any adverse information related to the person in a consumer report with respect to the period beginning with the Public Health Emergency and State of Emergency declared by the Governor in Executive Order 103 of 2020 and extending 90 days following the end of that public health emergency and state of emergency.

     (4)   Any user of a consumer report that receives a request pursuant to paragraph (3) of this subsection shall respond to the affected person and the Director of the Division of Consumer Affairs in the Department of Law and Public Safety within five days of receiving the request.

     c.     No charge shall be imposed by a consumer reporting agency pursuant to section 10 of P.L.1997, c.172 (C.56:11-37) with respect to a request made by a consumer pursuant to this section.

     d.    As used in this section:

     "Affected person" means a borrower who is a resident of this State and has suffered financial hardship as a result of the coronavirus disease 2019 pandemic.

     "Borrower" means a person who is named as a borrower or debtor in a consumer, student, or other consumer loan or extension of credit.

     "User of a consumer report" means any person or entity that is furnished a consumer report for a purpose that is permissible pursuant to section 4 of P.L.1997, c.172 (C.56:11-31).

 

     6.    The Commissioner of Community Affairs and the Commissioner of Banking and Insurance, as appropriate, shall, pursuant to the provisions of the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), adopt such rules and regulations as shall be necessary to implement the provisions of this act no later than one month following the effective date of this act.

 

     7.    This act shall take effect immediately and be retroactive to March 9, 2020.

STATEMENT

 

     This bill requires the forbearance of mortgage loans for commercial and residential property owners during the period during which the Public Health Emergency and State of Emergency declared by the Governor in Executive Order 103, March 9, 2020 are in effect and concluding six months following the conclusion of the State of Emergency or Public Health Emergency, whichever is earlier.  The mortgage forbearance period of a property owner is to be 90 days.  A property owner may request, and is to be granted, a subsequent forbearance period of 90 days, for a total of not more than 180 days.

     Under the bill, the Commissioner of Community Affairs is to notify owners of the forbearance program, encourage owners to seek United States Department of Housing and Urban Development housing counseling, and post information on eligibility and the process for the forbearance on the department's Internet website no later than one month following the effective date of this act.

     The bill requires a mortgagee that grants a mortgage forbearance pursuant to the bill to encourage owners to seek out United States Department of Housing and Urban Development certified housing counseling and provide to the property owner confirmation of the approval of the forbearance, information concerning the process for forbearance, and information on how to request a subsequent forbearance.

     The bill also requires landlords to suspend rent, for a period of 90 days, upon written or electronic request to the landlord from a residential tenant or small business commercial tenant, for the period during which the Public Health Emergency and State of Emergency declared by the Governor in Executive Order 103, March 9, 2020 are in effect and concluding six months following the conclusion of the State of Emergency or Public Health Emergency, whichever is earlier.  A landlord is required to notify the tenant in writing of the date on which rent payments are to resume.  A tenant may request, and shall be granted, a subsequent forbearance period of 90 days, for a total of not more than 180 days. 

     A tenant with rent suspended pursuant to the bill shall not be required to pay a fee related to the suspension or late payment or to pay the sum of the suspended rent upon the conclusion of the suspension of rent.  Nothing in the bill prohibit a landlord and a tenant from establishing a payment plan for the balance of suspended rent or from applying the security deposit toward that balance.  Unless otherwise stipulated by the landlord and the tenant, the payment period of any rent subject to the suspension shall be extended by the number of months the suspension is in effect.

     A violation of the provisions of the bill concerning rent suspension for tenants is an unlawful practice under the Consumer Fraud Act.  An unlawful practice under the Consumer Fraud Act is punishable by a monetary penalty of not more than $10,000 for a first offense and not more than $20,000 for any subsequent offense. Violations can also result in cease and desist orders issued by the Attorney General, the assessment of punitive damages, and the awarding of treble damages and costs to the injured party.  

     In addition, this bill requires the forbearance of any commercial, student, or other consumer loan, including an extension of credit for borrowers during the period in which the Public Health Emergency and State of Emergency declared by the Governor in Executive Order 103, March 9, 2020 are in effect and concluding six months following the conclusion of the State of Emergency or Public Health Emergency, whichever is earlier.  The forbearance period of a borrower is to be 180 days.  No borrower requesting a forbearance is to be required to provide proof of economic hardship.

     In addition, the repayment period of any loan subject to forbearance is to be extended by the number of months the forbearance is in effect.  During the time of the forbearance, and during the period constituting an extension of the loan, all terms and conditions of the original loan, except with regard to default and delinquency during forbearance, are to continue without modification, and there no fees may be assessed for the forbearance, or penalty for early repayment.

     The Commissioner of Banking and Insurance is to develop separate, specific guidelines for the forbearance of student loans, extensions of credit, and other consumer loans.

     This bill also provides that no consumer reporting agency shall include, and no user of a consumer report shall consider, any adverse information in a consumer report that is a result of the coronavirus disease 2019 pandemic, with respect to an affected person who provides the agency or user notice pursuant to the bill.

     Under the bill, an affected person may contact any consumer reporting agency or user of a consumer report and request that the agency or user disregard any adverse information related to the person obtained by the agency or user with respect to the period beginning with the Public Health Emergency and State of Emergency declared by the Governor in Executive Order 103 of 2020 and extending 90 days following the end of that public health emergency and state of emergency.

     The bill requires any consumer reporting agency or user of a consumer report that receives a request to respond to the affected person and the Director of the Division of Consumer Affairs in the Department of Law and Public Safety within five days of receiving the request.

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