NHEMA: NJ Law May Cut Billions in Lending

New Jersey's new predatory lending law may jeopardize billions of dollars in mortgage loans to the state's consumers, according to a survey of top New Jersey lenders conducted for the National Home Equity Mortgage Association.NHEMA said the survey of 16 of the top 25 mortgage lenders in New Jersey found that they expect to reduce mortgage lending by $4.2 billion a year in the state because of the new restrictions, which took effect Nov. 27. In addition, all said they would reduce lending to New Jersey borrowers who don't meet prime lending standards (with an average reduction of 69%), and most said they would severely curtail or eliminate cash-out refinance and home improvement lending in the state. "Mortgage lenders want to keep doing business in New Jersey, but they say the law that went into effect last week will make it impossible to serve as many people as they have in the past," said Dr. Richard F. DeMong, the Virginia Bankers Professor of Bank Management at the University of Virginia. "While the lenders I surveyed expect to reduce lending in the state by over $4 billion a year, the total mortgage credit lost to New Jersey's borrowers as a result of the law could be several times that amount." NHEMA can be found online at http://www.nhema.org.