The New Jersey Department of Banking and Insurance recently issued Bulletin No. 23-01 to announce an adjustment to the definition of “high-cost home loan” under the Home Ownership Security Act of 2002 (the “Act”). High-cost home loans in New Jersey are subject to additional lender requirements under the Act. A residential mortgage loan is not subject to the triggering provision of the Act as a “high-cost home loan” if the principal loan amount exceeds a maximum threshold amount.
When the Act went into effect in 2003, the maximum principal amount of a loan that triggered the “high-cost home loan” provisions was $350,000, subject to an annual adjustment based upon the United States Department of Labor, Bureau of Labor Statistics’ Consumer Price Index for the New York – New Jersey Region (N.J.S.A. 45:10B-22 to -35).
For 2023, the definition of “high-cost home loan” has been adjusted to provide that the maximum principal amount of a loan that may be considered high-cost is $556,429.97, an increase from the 2022 principal amount threshold of $527,669.59.
The new maximum principal amount threshold is retroactively effective for all loans that may be subject to the Act with completed applications dated January 1, 2023 or later.
DocMagic updated the New Jersey High-Cost Test and applicable audits to consider the increased threshold on April 10, 2023.
If you have any questions, please contact DocMagic’s Compliance Department.
