N.J. Admin. Code § 5:80-21.5

Current through Register Vol. 56, No. 24, December 18, 2024

Section 5:80-21.5 - Termination of servicing by Agency

(a) The Agency may terminate the servicing agreement with a servicer with or without cause. If termination is without cause the Agency shall pay to the servicer 50 basis points of the outstanding principal loan balance of any loan that is less than 84 months old and that is not in default by 60 or more days. No compensation shall be paid for any loan that is older than seven years.

(b) If the Agency terminates the servicing agreement with cause, in accordance with the agreement, no compensation adjustment shall be paid unless the Agency permits the servicer to transfer servicing, in which case the rules set forth in N.J.A.C. 5:80-21.1 through 21.4 shall apply.

(c) In the event that the Agency terminates the servicing agreement, the servicer shall compensate and indemnify the Agency for losses to the Agency or for which the Agency becomes responsible, which are attributable to the servicer. In addition, the servicer shall not receive a compensation adjustment as may have otherwise been provided under (a) above, unless the servicer shall have first made the Agency whole. The servicer shall not be permitted to set off any compensation adjustment under (a) above against its obligations to the Agency.

N.J. Admin. Code § 5:80-21.5

New Rule, R.1997 d.523, effective 12/15/1997.
See: 28 New Jersey Register 4833(a), 29 New Jersey Register 5285(a).