On April 29, New Jersey’s governor signed into law bill A4997, known as the Mortgage Servicers Licensing Act. As the title indicates, the Act creates a licensing regime for servicers of residential mortgage loans secured by real property within New Jersey. As with many state licensing regimes, the Act exempts most banks and credit unions from licensing. It also excludes from licensing certain entities regulated under the New Jersey Residential Mortgage Lending Act. Consequently, the licensing regime principally impacts non-bank servicers who do not lend in New Jersey.
Also like other licensing regimes, the Act requires licensees to maintain and submit evidence of surety and fidelity bonds, designate qualified individuals to serve in various roles, such as “Qualified Individual” and “Branch Manager,” and pay applicable licensing and renewal fees. Additionally, the Act:
- Creates new operational requirements for some servicers;
- Creates a list of prohibited activities for all servicers;
- Provides the New Jersey Department of Banking and Insurance with investigative and examination authority; and
- Provides the Department of Banking with enforcement authority, which includes the power to impose civil penalties of up to $25,000 per violation.
[Consumer Financial Services LAW MONITOR]
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