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A New Jersey law going into effect this summer adds to a growing number of state-level efforts to require more mortgage servicers to obtain licenses.
The Mortgage Servicers Licensing Act will require any nonexempt mortgage servicer working with loans secured by New Jersey properties to obtain a license, according to a press release issued by the sponsors of the legislation. Individuals already licensed under the state’s Residential Mortgage Lending Act are exempt, as well as those that work for federally insured banks and credit unions.
Seven Assembly Democrats sponsored the bill, A4997: Yvonne Lopez (Middlesex), Vincent Mazzeo (Atlantic), Carol Murphy (Burlington), Steven Oroho (Morris, Sussex and Warren), Troy Singleton (Burlington) and Dawn Marie Addiego (Atlantic, Burlington and Camden). Gov. Phil Murphy, also a Democrat, signed the Mortgage Servicers Licensing Act and several other tweaks to the state’s mortgage regulations into law Monday. The law is slated to go into effect 90 days after being signed.
Under the new licensing law for mortgage servicers, nonexempt servicing professionals must obtain a license for each main office and each branch office where business is conducted, according to the press release. Licensees also must meet financial, character and fitness requirements; and they also must file certain information about the loans they service with the state. The law also requires licensees to be bonded.
Violators of the new law will be subject to civil penalties of up to $25,000 and can be charged with a third degree crime.
Most states have some form of licensing or registration for mortgage lending or debt collection that pertains to many servicers, but a growing number of jurisdictions have expanded those requirements. Other states that recently have done this include Pennsylvania, Ohio and Washington.