New Jersey adds transitional licensing, new fee rules to mortgage law

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New Jersey Governor Phil Murphy signed a bill to revise the state's Residential Mortgage Lending Act to facilitate transitional licensing for loan officers and to streamline the law's provisions for borrower fees.

In addition to ushering in procedural changes around transitional licensing and requirements for exempt companies, the new law updated the types of fees residential mortgage lenders have the right to charge. The lenders are no longer allowed to expressly charge credit report fees and appraisal fees. Instead, those charges are now considered part of third-party fees lenders may pass on to borrowers.

"For the lender, it will certainly help to become much more accurately reflective and transparent in how those forms are filled out correctly and the costs are outlined," State Sen. Nellie Pou, who sponsored the bill, said in an interview with NMN.

"For the borrower, there's no real impact. It's just specifically outlining who's actually charging the fee. They're still required to pay the credit report and appraisal costs. But we wanted to change them to third-party fees since they're required to be passed on by the mortgage lender," Pou explained.

The bill, S-709, was signed into law on Aug. 24.

"I think it's good for consumers and good for the industry. We're very pleased that we have this going into effect," said E. Robert Levy, executive director of the New Jersey Mortgage Bankers Association.

It will also help clarify things on a national level, putting New Jersey more in line with how other states disclose their mortgage fees.

"Obviously, you want to be able to break them out. I think it's better for everybody involved, said Curtis Knuth, president and CEO of National Credit-reporting System, a credit report reseller and provider of tax transcript request services based in Egg Harbor, N.J. "At the end of the day, lenders want to stay in compliance, consumers want to see what they're paying for. You've got to achieve that balance."

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Certifications and licensing Underwriting Law and regulation State regulators Appraisals Phil Murphy New Jersey