N.J. Admin. Code § 3:18-1.2

Current through Register Vol. 56, No. 16, August 19, 2024

Section 3:18-1.2 - Definitions

The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise:

"Act" means the Foreclosure Rescue Fraud Prevention Act, 46:10B-53 et seq.

"Business entity" means a corporation, association, joint venture, partnership, limited liability company, limited liability partnership, sole proprietorship, or any other legal entity, however organized, permitted under the laws of this State.

"Business licensee" means a business entity licensed as a foreclosure consultant.

"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 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 a distressed property 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 distressed property 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 a distressed property owner transfers an interest in fee in a distressed property.

"Distressed property owner" means the owner of record of the title to a distressed property.

"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.

"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 distressed property owner or does not give the owner an option to purchase the property at a later date.

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

1. Saving the distressed property 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 distressed property 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 distressed property owner in obtaining a loan or advance of funds; or

9. Avoiding the impairment of the distressed property 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 a distressed property owner;

4. Arranging or attempting to arrange for an extension of the period within which the distressed property 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;

7. Giving advice, explanation, or instruction to a distressed property 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; or

8. Recording the foreclosure consultant contract as required by 46:10B-56.g.

"Foreclosure consultant" means any person, located out-of-State or within the State, who, directly or indirectly, for compensation from a distressed property 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:

1. Prevent or postpone the foreclosure sale of the property;

2. Obtain any forbearance from any mortgagee;

3. Assist the distressed property owner in exercising any right of reinstatement or right of redemption;

4. Obtain any extension of the period within which the distressed property owner may reinstate the distressed property owner's rights with respect to the property;

5. 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;

6. Assist the distressed property owner in obtaining a loan or advance of funds other than to pay off the promissory note, contract, or mortgage evidencing or securing a debt in relation to the property, except that, for the purposes of this paragraph 6, a foreclosure consultant shall not assist a distressed property owner by:

i. Providing any service that would require licensure under the Residential Mortgage Lending Act, 17:11C-51 et seq., without first obtaining such license;

ii. Providing any service that would require licensure under the Consumer Finance Licensing Act, 17:11C-1 et seq., without first obtaining such license; or

iii. Providing any such service that would require licensure, registration, or other credential under any other law or regulations of this State, another State or the United States, without first obtaining the requisite authorization; or

7. Avoid or ameliorate the impairment of the distressed property 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 distressed property owner's credit.

"Foreclosure consultant agreement" or "foreclosure consultant contract" means the written document memorializing the terms of the contractual agreement between a foreclosure consultant and a distressed property owner.

"Individual" means a natural person.

"Individual licensee" means a natural person licensed as a foreclosure consultant employed by a business licensee.

"Licensee" means a business licensee or an individual who is licensed under the Act.

"Reasonable ability to pay" means that the distressed property 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 12 months, or if that figure is unavailable, $ 200.00, 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 a distressed property 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 distressed property owner's property transferred in a distressed property conditional conveyance.

N.J. Admin. Code § 3:18-1.2