New Jersey Administrative Code › Title 3 - BANKING › Chapter 1 - GENERAL PROVISIONS › Subchapter 16 - MORTGAGE LOANS, FEES, OBLIGATIONS › Section 3:1-16.5 - Commitment process

Current through Register Vol. 56, No. 14, July 15, 2024
(a) At or before
				issuance of a commitment, the lender shall disclose in writing the following:
1. The expiration date of the
				commitment;
2. The amount financed,
				which shall have the same meaning as that term is defined in Federal Regulation
				Z;
3. In the event the interest
				rate is not subject to increase before expiration of the commitment:
i. The finance charge, which shall mean the
				dollar amount the credit will cost the borrower;
ii. The annual percentage rate, which shall
				mean the cost of the credit to the borrower as a yearly rate; and
iii. The payment schedule, which shall mean
				the number, amounts and timing of payment scheduled to repay the
				obligation;
4. In the
				event the interest rate is subject to increase before expiration of the
				commitment:
i. The basis, index or method, if
				any, which will be used to determine the rate at closing. Such basis, index or
				method shall be established and disclosed with direct reference to the movement
				of an interest rate index or of a national or regional index that is available
				to and verifiable by the borrower and beyond the control of the lender;
				or
ii. A statement in at least
				10-point bold type that "The interest rate will be a rate established by the
				lender in its discretion" followed by a statement in the same type indicating
				when the prevailing rate would be set and advising the borrower of his or her
				right to demand redisclosure of the rate and points pursuant to subsection (c)
				below once they are so set; and
iii. In addition to the requirements of (a)4i
				or ii above, the finance charge, annual percentage rate and payment schedule
				based on the rate at which a lender is closing or committing loans on the date
				the disclosure is made, together with a statement in at least the same size
				type as the disclosure, either immediately above or immediately below the
				disclosure, to the effect that:
"These figures are for illustrative purposes only. They
				  reflect the rate now in effect, NOT necessarily the rate you will pay at
				  closing, which will be established as indicated in this commitment."
5. The amount of the
				commitment fee, if any, and whether and under what circumstances the commitment
				fee shall be refundable, provided that, where applicable, the latter disclosure
				may be made by referencing either
				3:1-16.6(a)  or
				3:1-16.6(b)  of
				these rules;
6. All other fees yet
				to be paid by the borrower, including, but not limited to, warehouse fees and
				discount points, except that fees previously disclosed by the lender need not
				be redisclosed;
7. In the event the
				interest rate, annual percentage rate or term may vary after closing,
i. An identification and specification of the
				terms which are variable;
ii. The
				circumstances under which the above terms may change;
iii. Any limitation on a change;
iv. The effect of a change; and
v. An example of the payment terms that would
				result from an increase;
8. The time, if any, within which the
				commitment must be accepted by the borrower; and
9. Whether any fees or discount points
				charged by the lender and set forth in the commitment are subject to change
				before closing and, if so, the circumstances under which such fees or discount
				points may change.