This bill mandates that financial institutions in New Jersey must permit mortgagors to make biweekly and semi-monthly mortgage payments, as well as allow them to pay additional amounts towards the mortgage principal without incurring penalties. Specifically, for mortgagors in good standing, the bill stipulates that any excess payments made during biweekly or semi-monthly payments will be applied to the mortgage loan principal. Additionally, if an escrow analysis indicates an increase in required escrow payments due to rising property taxes or insurance premiums, the financial institution is required to notify the mortgagor of the new payment amounts and apply any additional payments first to unsatisfied escrow payments before addressing the mortgage principal.

The bill also introduces definitions for key terms such as "contractual mortgage payment," "escrow amount," and "principal," which clarify the financial obligations and processes involved in mortgage agreements. The act is set to take effect six months after its enactment and will apply to mortgage agreements entered into on or after that date. Overall, the legislation aims to provide more flexible payment options for mortgagors while ensuring transparency and accountability from financial institutions.