46:10B-54 Definitions relative to certain mortgage foreclosure consultant practices.

2. As used in this act:

"Business day" means any day other than a Saturday, Sunday, or a federal holiday.

"Conventional mortgage rate" means the highest mortgage rate published for the relevant loan product on the website of any generally accepted industry provider of such information, applicable to the week preceding the transaction.

"Distressed property" means residential real property consisting of from one to four dwelling units, at least one of which is occupied by the owner as a primary residence, and which is the subject of a mortgage foreclosure proceeding or whose owner is more than 90 days delinquent on any loan that is secured by the property.

"Distressed property purchaser" means a person who acquires an interest in a distressed property through a distressed property conditional conveyance or a distressed property conveyance, or a person who participates in a joint venture or joint enterprise involving a distressed property conditional conveyance or a distressed property conveyance. The term "distressed property purchaser" does not mean a federally insured financial institution or a person who acquires distressed property through a deed in lieu of foreclosure or a person acting in participation with any person who acquires distressed property through a deed in lieu of foreclosure, provided that person does not promise to convey an interest in fee back to the owner or does not give the owner an option to purchase the property at a later date.

"Distressed property conditional conveyance" means a transaction involving any participation by, or any distressed property service or other service or other assistance provided by, a foreclosure consultant in which an owner transfers an interest in fee, or a beneficial interest created through a trust document, in the distressed property; the acquirer of the property allows the owner to occupy the property; and the acquirer of the property or a person acting in participation with the acquirer of the property conveys or promises to convey an interest in fee back to the owner or gives the owner an option to purchase the property at a later date.

"Distressed property conveyance" means a transaction involving any participation by, or any distressed property service or other service or other assistance provided by, a foreclosure consultant in which an owner transfers an interest in fee in a distressed property.

"Distressed property relief" or "relief" means, in connection with a foreclosure consultant, any of the following:

(1) saving the owner's property from foreclosure;

(2) postponing the foreclosure sale;

(3) obtaining a forbearance from the mortgagee;

(4) securing the right to exercise the right to reinstatement;

(5) obtaining an extension of the period within which the owner may reinstate his or her mortgage obligation;

(6) obtaining a waiver of an acceleration clause;

(7) obtaining a modification of a mortgage;

(8) assisting the owner in obtaining a loan or advance of funds; or

(9) avoiding the impairment of the owner's credit.

"Distressed property service" or "service" means, without limitation, in connection with a distressed property conditional conveyance or a distressed property conveyance, any of the following:

(1) debt, budget, or financial counseling of any type;

(2) receiving money for the purpose of distributing it to creditors in payment or partial payment of any obligation secured by a mortgage or other lien on a distressed property;

(3) contacting creditors on behalf of an owner;

(4) arranging or attempting to arrange for an extension of the period within which the owner may cure the owner's default and reinstate a debt obligation;

(5) arranging or attempting to arrange for a delay or postponement of the time of sale of the distressed property;

(6) advising with respect to the filing of any document or assisting in any manner in the preparation of any document for filing with any court; or

(7) giving advice, explanation, or instruction to an owner that in any manner relates to the cure of a default or forfeiture or to the postponement or avoidance of a sale of the distressed property.

"Foreclosure consultant": (1) means any person, located out-of-State or within the State, who, directly or indirectly, for compensation from an owner, makes any solicitation, representation, or offer to perform, or who performs, any distressed property service that the person represents will in any manner do any of the following in relation to the owner's distressed property:

(a) prevent or postpone the foreclosure sale of the property;

(b) obtain any forbearance from any mortgagee;

(c) assist the owner in exercising any right of reinstatement or right of redemption;

(d) obtain any extension of the period within which the owner may reinstate the owner's rights with respect to the property;

(e) obtain any waiver of an acceleration clause contained in any promissory note, contract, or mortgage evidencing or securing a debt in relation to the property;

(f) assist the owner in obtaining a loan or advance of funds to pay off the promissory note, contract, or mortgage evidencing or securing a debt in relation to the property; or

(g) avoid or ameliorate the impairment of the owner's credit resulting from default on the promissory note, contract, or mortgage, or the conduct of a foreclosure sale or offer to repair the owner's credit.

(2) shall not include any of the following:

(a) a housing counseling agency contracted by the United States Department of Housing and Urban Development to provide counseling;

(b) a person who holds or is owed an obligation secured by a lien on any distressed property in situations in which the person performs services in connection with the obligation or lien, provided the obligation or lien did not arise as the result of, or as part of, a proposed distressed property conditional conveyance or a distressed property conveyance;

(c) a person licensed to practice law in this State while acting under the authority of that license;

(d) a nonprofit, charitable entity qualified pursuant to section 501(c)(3) of the Internal Revenue Code of 1986 (26 U.S.C. s.501(c)(3)), which is licensed pursuant to P.L.1979, c.16 (C.17:16G-1 et seq.);

(e) a municipality which has a tax lien on distressed property;

(f) an assignee or a purchaser of a municipal tax lien from a tax sale;

(g) a sponsor which is certified by the Commissioner of Community Affairs to participate in the "New Jersey Housing Assistance and Recovery Program" established pursuant to sections 8 through 14 of P.L.2008, c.127 (C.55:14K-88 et seq.);

(h) a bank, savings bank, savings and loan association, credit union, or other federally insured financial institution, or insurance company, or affiliate or subsidiary thereof, organized, chartered, licensed, or holding a certificate of authority to do business under the laws of this State or any other state or under the laws of the United States;

(i) a person licensed as a real estate broker, broker-salesperson, or salesperson pursuant to R.S.45:15-1 et seq., while acting under the authority of that license;

(j) a person licensed as a title insurance producer pursuant to the "New Jersey Insurance Producer Licensing Act of 2001," P.L.2001, c.210 (C.17:22A-26 et seq.) while acting under the authority of that license or conducting the business of title insurance pursuant to P.L.1975, c.106 (C.17:46B-1 et seq.);

(k) a mediator licensed pursuant to the Judiciary's Foreclosure Mediation Program; or

(l) a person licensed pursuant to the "New Jersey Residential Mortgage Lending Act," P.L.2009, c.53 (C.17:11C-51 et seq.), while acting under the authority of that license.

"Owner" means an owner of record of title to a distressed property.

"Owner's current verified monthly income" means the monthly average of the owner's most recent six months of wage receipts or pay stubs or if the owner has non-wage income by a verified statement of profit and loss or income from a certified public accountant who has reviewed the owner's income.

"Reasonable ability to pay" means that the owner's current verified monthly income is adequate to service a 30-year fixed rate loan at the conventional mortgage rate together with actual property taxes, homeowner's insurance, condominium or association fees, if applicable, and reasonable and necessary living expenses.

"Reasonable and necessary living expenses" means not less than the average utility costs over the last twelve months, or if that figure is unavailable $200, and transportation, food, clothing, and other expenses equal to an amount not less than the Collection Financial Standards set forth by the Internal Revenue Service for transportation, food, clothing, and other items and out-of-pocket health care costs.

"Residual income" means an owner's net income available to meet living expenses after the payment of all ordinary and necessary debt, including payments under an option to purchase back the owner's property transferred in a distressed property conditional conveyance.

L.2011, c.146, s.2.