N.J. Admin. Code § 3:25-4.4

Current through Register Vol. 56, No. 23, December 2, 2024

Section 3:25-4.4 - Certification of alternate high-cost home loan credit counseling

(a) A high-cost home loan credit counselor may provide alternate counseling as set forth in this section and, thereafter, issue a certificate confirming its having done so. If the borrower, at the time of counseling, has an application pending for a high-cost home loan on which the borrower has not previously received high-cost home loan credit counseling, alternate counseling may only be given in addition to the counseling on the actual pending loan transaction required by 3:25-4.3.

(b) The alternate counseling shall be based upon three hypothetical loans as set forth in (c) below.

(c) Prior to providing a certification of alternate counseling, an individual providing high-cost home loan credit counseling shall discuss with the consumer the following:

1. A comparison of the following three types of hypothetical loans:

i. A high-cost home loan;

ii. A home loan other than a high-cost home loan; and

iii. A home loan;

2. For each hypothetical loan, the estimated total monthly payment on the loan based upon principal and interest and, if applicable, taxes, homeowner's insurance and any other costs to be included in the monthly payment;

3. The equity that currently exists in the borrower's home, to the extent it is known;

4. The effect of each loan's terms including interest rate, annual percentage rate, points, fees, any provision for a balloon payment and prepayment penalties;

5. The borrower's financial situation both before and after each hypothetical loan, including the impact that the loan will have on the borrower's general financial condition and monthly finances, any personal benefits, and the advantages and disadvantages of proceeding with each hypothetical loan transaction;

6. Opportunities for the borrower to seek other means of funding;

7. That the counselor is a non-affiliated third party agency and is not affiliated with any lender which offers high-cost home loans; and

8. Other information necessary to ensure that the consumer understands their obligations with regard to the hypothetical loans and the ramifications of a default.

(d) High-cost home loan credit counselors shall certify on a form approved by the Department that the consumer has received alternate counseling on the high-cost home loans in accordance with this subchapter.

(e) The certification of alternate counseling shall include:

1. The names of the borrowers and of the individual who provided the counseling;

2. The time and manner of the consultation, indicating whether the consultation occurred in person, by telephone, on the Internet, or by other identified means;

3. The length of time of the consultation;

4. The amount, term, interest rates, annual percentage rates (APRs), points and fees of the hypothetical loans;

5. The topics discussed;

6. A statement that the advice given by the counselor meets or exceeds the standards required by this chapter;

7. The dated signatures of both the individual who provided the counseling and the consumer;

8. A statement that the high-cost home loan credit counselor is not affiliated with any high-cost home loan lender and is a non-affiliated third party agency as defined in 3:25-1.1; and

9. Information disclosing whether a fee has been paid to the high-cost home loan credit counselor for providing counseling to the particular borrower named on the certification and, if so, the amount of the fee and the identity of the payor.

(f) A high-cost home loan credit counselor shall not issue a certification of alternate counseling unless all counseling required by 46:10B-26 and this subchapter has been provided with regard to the hypothetical loans.

(g) For a period of 90 days subsequent to its being issued as provided in this section, a certification of alternate counseling issued by a registered high-cost home loan credit counselor may be used by the borrower for one or more loan transactions in satisfaction of the certification requirements of N.J.S.A. 46:10B-26g.

N.J. Admin. Code § 3:25-4.4

Amended by R.2009 d.322, effective 10/19/2009.
See: 41 N.J.R. 2370(a), 41 N.J.R. 3897(a).
In (e)2, substituted "manner" for "place" and inserted ", indicating whether the consultation occurred in person, by telephone, on the Internet, or by other identified means".