New Jersey Amends the Fair Foreclosure Act: Servicer Impacted
Effective September 21, 2017, New Jersey amended its Fair Foreclosure Act by defining servicers and their duties during a short sale.
The amendment defines a servicer as the following:
The person, corporation or other entity responsible for servicing a residential mortgage loan, including a residential mortgage lender who makes or holds a loan if the lender also services the loan.
Servicing is defined as:
Managing the mortgage loan account on a daily basis, including collecting and crediting periodic loan payment, managing escrow accounts, or enforcing the terms of the mortgage note.
Individuals who fit within the confines of the definitions will be required to engage with sellers, seller’s agents, and/or authorized third parties purchasing properties through a short sale. To do so (1) the servicer must respond to good faith offers; (2) the response must include an approval, denial or request for further information; and (3) the response must be provided within 60 days of the date of the offer.
Should the servicer deny the offer or fail to respond within the required time, then the buyer is entitled to be refunded, in its entirety, any deposits made. The buyer will also be released from any further obligations – promissory notes, bonds or other similar evidence of a duty to pay – with respect to the transaction.
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