Bill Text: NJ A787 | 2010-2011 | Regular Session | Introduced
Bill Title: "New Jersey Senior Citizen Taxpayer Reverse Mortgage Program."
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2010-01-12 - Introduced, Referred to Assembly Housing and Local Government Committee [A787 Detail]
Download: New_Jersey-2010-A787-Introduced.html
STATE OF NEW JERSEY
214th LEGISLATURE
PRE-FILED FOR INTRODUCTION IN THE 2010 SESSION
Sponsored by:
Assemblyman JON M. BRAMNICK
District 21 (Essex, Morris, Somerset and Union)
SYNOPSIS
"New Jersey Senior Citizen Taxpayer Reverse Mortgage Program."
CURRENT VERSION OF TEXT
Introduced Pending Technical Review by Legislative Counsel
An Act concerning reverse mortgages to seniors and supplementing chapter 14K of Title 55 of the Revised Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. This act shall be known and may be cited as the "New Jersey Senior Citizen Taxpayer Reverse Mortgage Program."
2. The New Jersey Housing and Mortgage Finance Agency shall establish a program for the granting of reverse mortgages for the purpose of payment of property taxes by senior citizens through the equity in their homes. This program shall be in addition to any reverse mortgage program currently established by the agency.
The program shall:
a. permit participation by homeowners aged 60 or older who are the owners of record responsible for making property tax payments;
b. not exclude any person for income reasons, except those persons making 200% or greater of median income for households in the housing region;
c. allow mortgage loans to a homeowner up to a maximum of 50 percent of the property taxes paid in the previous year, with no loan payments to be made by the homeowner;
d. require, as part of the loan process, counseling of the borrower to ensure that he or she understands the financial ramifications of the reverse mortgage, and the development of standards by the agency for determining when the granting of a reverse mortgage under the program might be detrimental to the financial situation of a borrower;
e. allow continual participation in the program by eligible participants for a period not to exceed 10 years; and
f. require a second mortgage and lien to be recorded on the property, which mortgage and lien shall not be due until transfer or sale of the real estate to which such mortgage and lien are attached.
3. The Commissioner of Community Affairs shall promulgate such rules and regulations as necessary to effectuate this act pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.).
4. This act shall take effect immediately.
STATEMENT
Entitled the "New Jersey Senior Citizen Taxpayer Reverse Mortgage Program," this bill requires the New Jersey Housing and Mortgage Finance Agency (HMFA) to create a special reverse mortgage program for the limited purpose of allowing seniors to tap their home equity to make property tax payments. The program would be open to seniors aged 60 or older who do not make more than 200 percent of the housing region's median income. The program would allow such seniors to borrow in any year, for a period of not longer than 10 years, amounts equal to 50 percent or less of the amount of property taxes paid in the previous year by the homeowner.
Although HMFA currently has a reverse mortgage program, it requires the borrowing of a greater amount of principal by a homeowner, and has different income eligibility requirements, in line with requirements for such loans under federal law. This program would allow seniors to borrow much smaller amounts, up to a maximum of 50 percent of their property tax bill, phased over a 10-year period. The bill would require, as part of the loan process, counseling of the borrower to ensure that he or she understands the financial ramifications of the reverse mortgage. The agency would be required to develop standards for determining when the granting of a reverse mortgage under the program might be detrimental to the financial situation of a borrower, who would then be so advised. The agency would be entitled to record a mortgage and lien upon making the loans. No payments would be required of the senior and the mortgage would not be repayable until the sale or transfer of the property.
This bill is part of a series of initiatives designed to address the issue of high property taxes in New Jersey.
