New Jersey Adjusts Definition Of "High Cost Home Loan" Under Home Ownership Security Act

Recently, the New Jersey Department of Banking and Insurance (Department) issued a bulletin increasing the maximum principal amount of a loan that may be considered a high cost home loan to $430,955.10. High cost home loans in New Jersey are subject to additional lender requirements under the New Jersey Home Ownership Security Act of 2002. When the New Jersey Home Ownership Security Act of 2002 (Act) became effective in 2003, the maximum principal amount that would trigger the "high cost home loan" provisions of the Act was $350,000. Pursuant to a requirement in the Act to annually review and, if necessary, adjust the maximum principal amount that will trigger the "high cost home loan" provisions of the Act, the maximum principal amount was last adjusted in 2008 to $428,615.60. The Department made the adjustment to $430,955.10. The Department made this adjustment based upon the United States Department of Labor, Bureau of Labor Statistics’ Consumer Price Index for the New York - Northern New Jersey Region. This increase in the definition of a high cost home loan is effective for all completed loan applications received by a lender on or after January 1, 2011.