The New Jersey Department of Banking and Insurance recently released Bulletin No. 20-01 regarding the annual review of the definition of a “high cost home loan” under the New Jersey Home Ownership Act of 2002 (the “Act”). The Act requires an annual review and, if necessary, an adjustment of the maximum principal amount that will be subject to the triggering provisions of the Act. Adjustments are based on the last published increase in the housing component of the national Consumer Price Index, New York – Northern New Jersey Region, which is meant to be representative of an average change in housing prices over time.
For 2020, the maximum principal loan amount that may be considered a high cost home loan has been increased from $498,610 (FY 2019) to $506,059.40. The amount of $506,059.40 shall be effective for all completed applications on loans that may be subject to the Act received by lenders on or after January 1, 2020. DocMagic has updated the New Jersey High Cost test and all applicable audits in response to this recent announcement.
