• New Jersey's Anti-Predatory Lending Law Takes Effect: Are You Ready?
  • December 14, 2003 | Authors: Leonard A. Bernstein; Robert M. Jaworski; Patricia E. Obara
  • Law Firms: Reed Smith LLP - Philadelphia Office ; Reed Smith LLP - Princeton Office
  • New Jersey's anti-predatory lending law, officially known as the "New Jersey Home Ownership Security Act of 2002," c.64, P.L. 2003, (the "NJ Act") was effective on November 27, 2003. Briefly, the NJ Act places restrictions on "home loans," "covered home loans" and "high-cost home loans," with the latter two categories including loans which exceed either an APR or a "points and fees" threshold. Because the NJ Act is in many respects vague and ambiguous, imposes severe penalties, and in some situations can extend potentially unlimited or at least unquantifiable liability upon loan purchasers, it could significantly damage the New Jersey market for non-prime lending.