New Jersey Administrative Code › Title 3 - BANKING › Chapter 1 - GENERAL PROVISIONS › Subchapter 16 - MORTGAGE LOANS, FEES, OBLIGATIONS › Section 3:1-16.2 - Fees

Current through Register Vol. 56, No. 14, July 15, 2024
(a) No lender shall
				charge a borrower any fees incident to the origination, processing or closing
				of a mortgage loan other than the following, except as otherwise authorized by
				State or Federal law, either explicitly or as interpreted by the appropriate
				regulator in official staff commentary, regulatory bulletins, or memoranda.
1. Application fee: Defined as a fee imposed
				by a lender or broker for accepting or processing a mortgage loan application.
				The application fee shall not be based upon a percentage of the principal
				amount of the loan or the amount financed;
2. Credit report fee, which shall not exceed
				the amount paid, or to be paid to the credit reporting agency by the party who
				receives the credit report directly from the credit reporting agency. The
				initial charge to the borrower may be based on a reasonable estimate provided
				that any amount in excess of the amount paid to the party providing the credit
				report is refunded to the borrower at or prior to closing;
3. Appraisal fee: Defined as a fee charged to
				a borrower by a lender or broker to recover the direct cost of the fee charged
				by a duly credentialed real estate appraiser for an appraisal in connection
				with a mortgage loan application. An appraisal fee may be charged to a borrower
				by a residential mortgage lender or by a residential mortgage broker, but not
				by both in connection with the same mortgage loan application. The initial
				charge to the borrower may be based on a reasonable estimate, provided that any
				amount in excess of the direct cost of the appraisal performed by a duly
				credentialed appraiser is refunded to the borrower at or prior to closing. The
				direct cost of any subsequent appraisal may be charged to a borrower in
				connection with the same property subject to the same mortgage loan application
				only for good cause shown. In determining good cause for such purposes, the
				following factors shall be considered:
i. Any
				changed circumstances shown to materially affect the value of the appraised
				property;
ii. The period of time
				since any prior appraisal was performed in connection with the same property
				subject to the same mortgage loan application, provided no material delay was
				caused by the lender;
iii.
				Compliance with applicable Federal regulations; and
iv. Such other factors as may reasonably be
				deemed material to the specific determination.
4. Commitment fee: Defined as a fee,
				exclusive of third-party fees, imposed by a lender as consideration for binding
				the lender to make a loan in accordance with the terms and conditions of its
				commitment and payable on or after acceptance of the commitment, except a
				lock-in fee charged pursuant to (a)5 below. The amount of any commitment fee
				shall be reasonably related to its purpose and may be based upon a percentage
				of the principal amount of the loan or the amount financed;
5. Lock-in fee: Defined as that portion of
				the commitment fee charged by a lender as the consideration for execution and
				fulfillment of the terms of the lock-in agreement. A lock-in fee may comprise
				all of the commitment fee. No lock-in fee shall be received by a lender prior
				to inception of the lock-in period;
6. Warehouse fee: Defined as a fee charged by
				a lender not to exceed the cost associated with holding the particular mortgage
				loan pending sale to a permanent investor and payable at closing. The fee shall
				be based on the actual holding period and warehouse rate and the initial coupon
				rate on the mortgage loan. No profit shall accrue to the lender from the
				fee;
7. Third party fees: Limited
				to the following fees paid or actually incurred by a lender on behalf of a
				borrower:
i. Overnight delivery, messenger,
				fax, and other special delivery fees, provided that the type of service is
				authorized by the borrower in advance in writing or the specific service is
				authorized by the borrower in writing;
ii. Flood certification fees;
iii. Pest inspection or certification
				fees;
iv. Final inspection fee, not
				to exceed the amount of the fee paid or actually incurred to a third party or,
				if the final inspection is done in-house, not to exceed the going charge for
				such inspections by third parties;
v. Outside counsels' fees as permitted by
				46:10A-6;
vi. Certified check fees, not to exceed the
				amount of the fee paid or actually incurred by the lender to the issuer of the
				certified check or, if the lender issues the certified check, not to exceed its
				usual fee for providing this service to its customers;
vii. Update fees to update the borrower's
				credit report and appraisal, not to exceed the amount of the fee paid or
				actually incurred by the lender to the credit reporting agency or appraiser or,
				if the appraisal is done in-house, not to exceed the going charge for such
				updates by third parties;
viii.
				One-time mortgage insurance premiums or, if the premiums are not collected on a
				one-time basis, not more than one-year of premiums;
ix. Survey fees;
x. Recording fees which shall not exceed the
				statutory amount for recording the deed, mortgage, and note, and which shall
				not include any amount for recording an assignment of the mortgage;
xi. Title and title search fees, including
				title insurance premiums;
xii.
				Taxes;
xiii. Tax service
				fees;
xiv. Radon test fees;
				and
xv. Fees not included among the
				above third party fees may be charged provided that prior written approval is
				obtained from the Department. The Department will only approve third party fees
				which are of benefit to the borrower and represent a cost not associated with
				the lender's overhead. Accordingly, the Department will not approve fees for
				document preparation, processing, underwriting, file updates, lender reviews,
				copying, funding, and miscellaneous.
8. Discount points or fractions thereof: A
				discount point is defined as an amount of money equal to one percent of the
				principal amount of the loan and payable only at closing.
9. A service fee not to exceed $ 25.00 to
				cancel the mortgage, providing that the borrower has received prior written
				notice of the fee required by the lender, and providing further that if the
				lender collects the service fee at the time of the mortgage transaction and
				transfers the servicing rights prior to cancellation, the lender shall refund
				the service fee to the borrower.