This bill amends the definition of "mortgage loan" in New Jersey law to specify that such loans are primarily made for personal, family, or household purposes. The new legal language clarifies that a mortgage loan is secured by real property that may include residential structures with up to six dwelling units, and it establishes a threshold for interest rates. The bill aims to enhance clarity in lending laws, ensuring that consumer mortgage loans are protected from prepayment penalties, thereby providing greater consumer protection.

Additionally, the bill introduces flexibility regarding prepayment penalties for commercial mortgage loans, which is intended to support small real estate investors and foster economic growth. The changes will take effect immediately and apply to mortgage loans entered into on or after the enactment date. Overall, the bill seeks to modernize lending frameworks while safeguarding consumer interests in the mortgage market.

Statutes affected:
Introduced: 46:10B-1