N.J. Admin. Code § 3:1-16.6

Current through Register Vol. 56, No. 21, November 4, 2024

Section 3:1-16.6 - Expiration of lock-in or commitment

(a) In the event a lock-in agreement has been executed, and the loan does not close before the expiration date of either the lock-in agreement or any commitment issued consistent therewith through no substantial fault of the borrower, the borrower may:

1. Withdraw the application or reject or terminate any commitment, whereupon the lender shall promptly refund to the borrower any lock-in fee and any commitment fee paid by the borrower; or

2. Have the lock-in agreement extended for no more than 14 calendar days following expiration of the commitment or, where no commitment issued before expiration of the lock-in, for no more than 14 calendar days following issuance of the commitment. If the borrower elects to extend the lock-in agreement, the lender may elect either to close the loan at or below the lock-in rate, in which case the lender may keep the lock-in fee, or may elect to close the loan above the lock-in rate but no higher than that which would provide a current market yield but no gross profit or "spread" to the lender, in which case the lender shall refund the lock-in fee to the borrower. All other terms and conditions of the loan shall be as specified in the commitment, regardless whether the loan closes before or after the expiration date of the commitment.

(b) In the event a lock-in agreement has not been executed and a commitment has been issued, and the loan does not close before the expiration date of the commitment through no substantial fault of the borrower, the borrower may:

1. Terminate the commitment, whereupon the lender shall promptly refund to the borrower any commitment fee paid by the borrower; or

2. Have the commitment extended for a reasonable period of time, not to exceed 14 calendar days, to permit closing.

N.J. Admin. Code § 3:1-16.6

Amended by R.1992 d.149, effective 4/6/1992 (Operative for Federally-chartered financial institutions is June 5, 1992).
See: 23 New Jersey Register 2613(b), 24 New Jersey Register 3(a), 24 New Jersey Register 1380(a).
Revised (a)2 and (b)2.