NEW JERSEY INCREASES HIGH-COST THRESHOLD Levy & Watkinson Attorneys Woodbridge New Jersey

NEW JERSEY INCREASES HIGH-COST THRESHOLD

The Department of Banking and Insurance has Bulletin 08-25, which sets the 2009 maximum dollar limits for a high cost loan under the New Jersey Home Ownership Security Act of 2002 ("NJHOSA"). For all completed mortgage loan applications received by a lender in New Jersey on or after January 1, 2009, loans in excess of $428,615.60 are not considered high cost loans under NJHOSA, even if such loans meet either the interest rate or points and fees threshold. The high cost limit for 2008 was $411,777.45.

Loans with dollar amounts exceeding the New Jersey thresholds may still constitute high cost loans under 12 C.F.R. 226.32 of federal law ("Section 32") if such loans meet the interest rate or points and fees threshold under Section 32. Whereas NJHOSA has a points and fees threshold for loans in excess of $40,000 of 4.5%, the Section 32 points and fees threshold is 8%.

The high-cost dollar threshold under NJHOSA is adjusted annually based on the increase in the housing component of the Consumer Price Index for the New York-Northern New Jersey Region.