New Jersey Issues Bulletin Regarding 2020 High-Cost Home Loan Dollar Adjustment
The New Jersey Department of Banking and Insurance has issued a bulletin setting out the maximum principal amount for loans that may be considered “high-cost home loans” under the New Jersey Home Ownership Security Act of 2002. The adjusted dollar amount is effective for loan applications received on or after January 1, 2020.
The New Jersey Home Ownership Security Act of 2002 requires an annual review and adjustment, if necessary, of the maximum principal loan amount that may be considered a high-cost home loan in New Jersey. The adjustment is based on the housing component of the national Consumer Price Index, which measures the average change in housing prices over time.
When the Act originated, the maximum principal amount was set at $350,000. By the end of 2018, this amount had increased by 42.46% to $498,610, which was set as the high-cost threshold for 2019 loans.
As of November 13, 2019, the Consumer Price Index had indicated an increase of 44.5884% since 2003. Accordingly, the New Jersey Department of Banking and Insurance has adjusted the definition of “high-cost home loan” to state that the maximum principal amount of a loan that may be considered a high-cost home loan in New Jersey is $506,059.40.
Zachary Pearlstein, JD, is a Regulatory Compliance Director with CLA's Mortgage Advisory Division. He joined CLA on January 1, 2014, as part of its acquisition of Bankers Advisory, Inc. Zachary oversees Mortgage Advisory's regulatory compliance team, which focuses on federal and state compliance, fair lending, and the Home Mortgage Disclosure Act (HMDA). He is a graduate of Brandeis University and earned his juris doctor at Suffolk University Law School. He is admitted to the Massachusetts Bar.
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