Current through Register Vol. 56, No. 18, September 16, 2024
(a) A high-cost
home loan credit counselor may provide alternate counseling as set forth in
this section and, thereafter, issue a certificate confirming its having done
so. If the borrower, at the time of counseling, has an application pending for
a high-cost home loan on which the borrower has not previously received
high-cost home loan credit counseling, alternate counseling may only be given
in addition to the counseling on the actual pending loan transaction required
by 3:25-4.3.
(b) The alternate counseling shall be based
upon three hypothetical loans as set forth in (c) below.
(c) Prior to providing a certification of
alternate counseling, an individual providing high-cost home loan credit
counseling shall discuss with the consumer the following:
1. A comparison of the following three types
of hypothetical loans:
i. A high-cost home
loan;
ii. A home loan other than a
high-cost home loan; and
iii. A
home loan;
2. For each
hypothetical loan, the estimated total monthly payment on the loan based upon
principal and interest and, if applicable, taxes, homeowner's insurance and any
other costs to be included in the monthly payment;
3. The equity that currently exists in the
borrower's home, to the extent it is known;
4. The effect of each loan's terms including
interest rate, annual percentage rate, points, fees, any provision for a
balloon payment and prepayment penalties;
5. The borrower's financial situation both
before and after each hypothetical loan, including the impact that the loan
will have on the borrower's general financial condition and monthly finances,
any personal benefits, and the advantages and disadvantages of proceeding with
each hypothetical loan transaction;
6. Opportunities for the borrower to seek
other means of funding;
7. That the
counselor is a non-affiliated third party agency and is not affiliated with any
lender which offers high-cost home loans; and
8. Other information necessary to ensure that
the consumer understands their obligations with regard to the hypothetical
loans and the ramifications of a default.
(d) High-cost home loan credit counselors
shall certify on a form approved by the Department that the consumer has
received alternate counseling on the high-cost home loans in accordance with
this subchapter.
(e) The
certification of alternate counseling shall include:
1. The names of the borrowers and of the
individual who provided the counseling;
2. The time and manner of the consultation,
indicating whether the consultation occurred in person, by telephone, on the
Internet, or by other identified means;
3. The length of time of the
consultation;
4. The amount, term,
interest rates, annual percentage rates (APRs), points and fees of the
hypothetical loans;
5. The topics
discussed;
6. A statement that the
advice given by the counselor meets or exceeds the standards required by this
chapter;
7. The dated signatures of
both the individual who provided the counseling and the consumer;
8. A statement that the high-cost home loan
credit counselor is not affiliated with any high-cost home loan lender and is a
non-affiliated third party agency as defined in
3:25-1.1; and
9. Information disclosing whether a fee has
been paid to the high-cost home loan credit counselor for providing counseling
to the particular borrower named on the certification and, if so, the amount of
the fee and the identity of the payor.
(f) A high-cost home loan credit counselor
shall not issue a certification of alternate counseling unless all counseling
required by
46:10B-26 and this subchapter has
been provided with regard to the hypothetical loans.
(g) For a period of 90 days subsequent to its
being issued as provided in this section, a certification of alternate
counseling issued by a registered high-cost home loan credit counselor may be
used by the borrower for one or more loan transactions in satisfaction of the
certification requirements of N.J.S.A. 46:10B-26g.
