New Jersey Modifies Provisions Regarding Residential Mortgage Lending Act
The state of New Jersey has recently amended its Residential Mortgage Lending Act. These provisions are effective immediately.
The New Jersey Residential Mortgage Lending Act (RMLA) is a law that comprehensively regulates the New Jersey mortgage loan origination activities of mortgage companies and their individual mortgage loan originators. The RMLA protects New Jersey consumers and the stability of New Jersey’s economy by applying certain standards for the licensing and business practices of residential mortgage lenders, brokers, and loan originators. The RMLA lists the fees that mortgage companies may charge to consumers and otherwise regulates the manner in which mortgage companies deal with consumers, and also gives the New Jersey Department of Banking and Insurance (Department) supervisory and enforcement authority over mortgage companies and originators. In addition, the RMLA imposes various reporting requirements on mortgage companies.
The amended provisions clarify that the RMLA applies to certain out-of-state persons and entities involved in residential mortgage lending in New Jersey. The provisions specifically state that the RMLA sections 1 through 39 of P.L.2009, c.53 (C.17:11C-51 through C.17:11C-89) also apply to residential mortgage lenders, residential mortgage brokers, mortgage loan originators, and other persons and entities that are located out-of-state, provided that they are otherwise required to be licensed under the RMLA.
Several additional updates to the RMLA had recently gone into effect on November 22, 2018. These included requiring lenders and brokers to have a branch manager for each branch office, and amending requirements with respect to the fees that may be charged during the origination, processing and closing of a mortgage loan. The 2018 updates also exempted loan processing and underwriting companies from the RMLA, provided that they register as an exempt company, and required exempt company registrants to provide written notice to the Department upon the occurrence of any event that would cause the exempt company to no longer qualify for an exempt company registration. The updates also granted the Department the authority to issue transitional mortgage loan originator licenses, and set forth the parameters as to when the Department may deem an application for licensure abandoned. Finally, last year’s updates permitted depository institutions to register with the Department for the purpose of sponsoring licensed mortgage loan originators.
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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