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April 2, 2009

Re:  Mortgage Stabilization and Relief Act Notification Requirements

Dear Mayor:

On January 9 of this year, the Governor signed the above referenced law as Chapter 127, P.L. 2009. Section 17 of the law, mandating certain notifications, became effective yesterday.

We have been advised that the appropriate state agencies will be sending you more, details on this but in the meantime please communicate the following to your staff and bring this to the attention of your municipal attorney.

As mentioned, the new law contains a Notification section (17) which states, in part:

17. a. A creditor serving a notice of intention to foreclose on a mortgage on residential property in this State shall serve the public officer of the municipality in which the property is located, or, if the municipality has not designated a public officer pursuant to P.L.1942, c.112 (C.40:48-2.3 et seq.), the municipal clerk, with a copy of the notice at the same time it is served on the owner of the property. In the event that the property being foreclosed is an affordable unit pursuant to the “Fair Housing Act,” then the creditor shall identify that the property is subject to the “Fair Housing Act.” The copy served on the public officer or municipal clerk shall include the full name and contact information of an individual located within the State who is authorized to accept service on behalf of the creditor.

The “public officer” mentioned above, would be an “officer, officers, board or body” who has been designated, by ordinance. To exercise police powers with regards to buildings “unfit for human habitation.”

The act goes on:

b. If a residential property becomes vacant at any point subsequent to the creditor’s filing the notice of intention to foreclose, but prior to vesting of title in the creditor or any other third party, and the property is found to be a nuisance or in violation of any applicable State or local code, the local public officer or municipal clerk shall notify the creditor, which shall have the responsibility to abate the nuisance or correct the violation in the same manner and to the same extent as the title owner of the property, to such standard or specification as may be required by the public officer or municipal clerk.

So, subsection a. provides for the receipt of notice from the creditor and subsection b. requires notice to the creditor, should the property be found in violation of code.

Subsection c. reads:

c. If the municipality expends public funds in order to abate a nuisance or correct a violation on a residential property in situations in which the creditor was given notice pursuant to the provisions of subsection b. of this section but failed to abate the nuisance or correct the violation as directed, the public officer or municipal clerk shall have the same recourse against the creditor as it would have against the title owner of the property, including but not limited to the recourse provided under section 23 of P.L.2003, c.210 (C.55:19-100).

Again, you should expect more guidance from the state shortly.  Please consult with your municipal attorney and inform the appropriate administrative staff that they may soon receive notices from creditors on certain properties, if they have not yet already received them.  

Very truly yours,


William G. Dressel, Jr.
Executive Director


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