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Personal Finance - Frequently Asked Questions

1. I need to have a lien release on my property, but the bank/lender is no longer in business. What can I do? Answer
2. I am having difficulties with my credit card company. Who can I ask for help or how can I file a complaint against the company? Answer
3. I believe that I have been the victim of identity theft. What should I do? Answer
4. What is a credit report? Answer
5. I have an old checking/savings account or CD with a bank that I forgot about and the bank is no longer in existence. How can I get my money? Answer
6. What is the criminal and civil usury rates in New Jersey? Answer
7. I have an issue(s) with the way in which a company is trying to collect on a debt. With whom can I file a complaint? Answer
8. I'm having a problem with the current mortgage company that is servicing my loan. What can I do? Answer
9. I am currently in default of my mortgage payments and the mortgage company/bank has begun foreclosure proceedings. What can I do? Answer
10. What are the maximum fees a bank can charge for such things as overdrafts, processing, in-sufficient funds, and unavailable funds, etc.? Answer
11. What should I do if I'm applying for a mortgage loan over the telephone and the representative requests my credit card number in order to charge for an application fee, appraisal fee, or credit report? Answer
12. Is it legal for an institution to charge a New Jersey consumer a prepayment penalty on a loan? Answer
13. I believe that I am the victim of an advanced fee scam (the advancement of funds for the promise of a loan, lottery winnings, credit card, or other products/services etc.). What can I do? Answer
14. What is a "subprime loan"? Answer
 
1. I need to have a lien release on my property, but the bank/lender is no longer in business. What can I do?


If the lien was placed by a bank you can try and obtain the release through contact with its successor. In order to determine a bank's successor you should utilize the "Bank Find" link found on the Federal Deposit Insurance Corporation (FDIC) web site.

If the most recent successor has no record of the loan and will not provide a release, you will need to contact your County Clerk's Office to file for a lien release. This process normally requires that an attorney or title agent attest through the filing of an affidavit noting that the loan has been paid off and the bank/lender is no longer in business, etc.

If a lender that is no longer in business placed the lien, you should follow the above instructions to obtain a lien release through your County Clerk's Office.


2. I am having difficulties with my credit card company. Who can I ask for help or how can I file a complaint against the company?

The Federal Trade Commission (FTC) handles all matters pertaining to credit cards. Please visit its web site for more information.

3. I believe that I have been the victim of identity theft. What should I do?

The Federal Trade Commission (FTC) also handles matters regarding identity theft.

4. What is a credit report?


A credit report is a report to a prospective lender on the credit standing of a prospective borrower used to aid in the determination of creditworthiness. Information in your credit report can affect your ability to get a job, a mortgage loan or other types of loans, a credit card or insurance. To make sure information is accurate in your report you may contact one of the three primary credit agencies.

Each request for information on your personal credit history is noted on your credit report; this request is called an "Inquiry." Such "Inquiries" typically follow your request for additional credit (e.g., opening an account at a department store or applying for an automobile loan). If the "Inquiry" has been made within the past 90 days, it is noted on the report to the lending entity. The lending entity wants to know the extent of other credit applications you may have outstanding so it can consider the impact of these potential obligations on your loan application.

If you find listings on your credit report that you wish to question or contest, you may wish to contact the credit agencies directly. Because these computerized services are fallible, the credit agencies have established mechanisms to handle such problems by having consumers start with a telephone call or letter to the credit agency to request either a copy of their credit report or to reinvestigate or correct the items in question. (More information on correcting credit reports...)

It is significant to note that your credit report may not be given to anyone who does not have a legitimate business need for it. Stores to which you are applying for may examine your record; curious neighbors may not. Prospective employers may examine your record with your permission.

  • For more information regarding this topic you can also refer to the Fair Credit Reporting Act of 1971 (15 U.S.C. § 1681 et seq.), which governs both credit grantors or those who provide the information and credit bureaus, as well as businesses who use credit reports. The Act regulates the compilation of information on individuals in order to offer legal protection to their privacy while not impeding the credit granting process.

It is recommended that you review your credit report at least once a year to make sure there are no errors or that you have not been made the victim of identity theft. In fact, you are entitled to one free copy of your credit report a year.

You can order a credit report through the central site for the three major credit reporting agencies, AnnualCreditReport.com:

Consumers should request their free reports in one of these three ways:
1. Go to www.annualcreditreport.com (the only authorized source for consumers to access their annual credit report online for free).
2. Call toll free 1-877-322-8228
3. Complete the form, available from the Federal Trade Commission (FTC), and mail it to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.

Although it is no longer necessary, New Jersey residents may wish to contact each of the credit reporting agencies directly. (As a New Jersey resident you are entitled to one free copy of each credit reporting agency's credit report once a year.)

Equifax
1-800-685-1111
Experian
1-888-397-3742
TransUnion
1-800-888-4213


5. I have an old checking/savings account or CD with a bank that I forgot about and the bank is no longer in existence. How can I get my money?


If the account/CD is less than seven (7) years old you should contact the bank's successor and see if they have any record of the account. If not, you should file a claim with the New Jersey Department of Treasury - Unclaimed Property Administration. Previously, banks were required by law to turn over funds from inactive/dormant accounts of seven (7) years or older to the State. The most recent law passed in 2002 has changed the timeframe to three (3) years.

You can contact the Unclaimed Property Administration by mail, telephone, or by accessing the unclaimed property online search as indicated below:

New Jersey Department of Treasury
Unclaimed Property Administration
PO Box 214
Trenton, NJ 08695
Web site: www.unclaimedproperty.nj.gov


If you have records for the account (passbook, account statements, the actual certificate etc.) and there is no record of the funds being turned over to the State, you should contact the Federal Deposit Insurance Corporation (FDIC). If the FDIC insured the institution, it may be able to provide you with the funds or additional leads in order to try and track the funds down.


6. What is the criminal and civil usury rates in New Jersey?


The criminal usury limitations (N.J.S.A. 2C:21-19) apply to all loans subject to State of New Jersey law. The maximum permissible rate is 50% for corporations and 30% for non-corporate borrowers.

The civil usury rates are governed by N.J.S.A. 31:1-1 et. Seq. (Title 31 - Interest and Usury). Those loans that fall into the category of N.J.S.A. 31:1-1(b) are determined the Department of Banking & Insurance according to the formula set forth therein. However, it should be noted that federal law preempts State usury law (see Depository Institution Deregulation and Monetary Control Act "DIDAMCA" - 12 U.S.C. 3803). As a result, financial institutions may make loans at any rate of interest up to the criminal usury limits, and other lenders, such as mortgage companies who are funded by federal programs, also are not subject to the New Jersey caps.


7. I have an issue(s) with the way in which a company is trying to collect on a debt. With whom can I file a complaint?


The Federal Trade Commission (FTC) promulgated and enforces The Fair Debt Collection Practices Act. If you feel a company has violated one of the tenants of this act you should file a complaint with the FTC.


8. I'm having a problem with the current mortgage company that is servicing my loan. What can I do?


First, it should be noted that there is currently no regulation of the mortgage loan servicing industry in the State of New Jersey. These matters normally have to be worked out between the consumer and the servicing company. If this can not be accomplished, either party has civil recourse as the matter would be dealt with as a contract issue.

If you feel that the servicing is in breach of your mortgage contract (for example, not applying your payments properly, charging you fees that are not indicated on the mortgage note, failing to make timely tax payments through your escrow account, etc.) you should consider consulting with legal counsel. This counsel should have expertise in dealing with mortgage loan contract issues. This counsel should have expertise in dealing with mortgage loan contract issues. (Find Lawyer Referral Service or legal aid (if applicable) in your county...)

You can also file for assistance with the Division of Banking. As a courtesy, this office will send a copy of your complaint along with a letter asking the subject mortgage company/bank to address the issues involved. Please note that you can file a complaint at the same time as filing a civil action against the company as the complaint investigation will not impact any legal proceeding that may subsequently occur.

NOTE: Certain mortgage loan servicing companies are under the jurisdiction of the Office of the Comptroller of the Currency.

9. I am currently in default of my mortgage payments and the mortgage company/bank has begun foreclosure proceedings. What can I do?


There are many legitimate reasons why borrowers may find themselves in default (loss of employment, sickness, death of a co-borrower, etc.).

It is the borrower's best interest to contact the institution servicing their mortgage and explain what the issue is before they are more than thirty days default on a payment.

It is strongly recommended that you notify the institution by sending it a certified letter to the appropriate area and then following it up with a telephone call. Most companies have specific units that handle these types of matters.

As a borrower you can request that the institution consider modifying the mortgage loan terms. An example would be the company allowing the borrower to refinance at no or low cost to obtain a lower interest in order to be able to continue making their monthly payments.

If you can not make any payment and believe that this can be rectified within a reasonable amount of time, you can request that the institution provide you with a period of forbearance. This would give you the opportunity to address the financial hardship and then begin making your regularly scheduled payments. The institution would then apply the missed payments to either the end of the loan or to be due in full at a later date.

If you and the institution can not agree on a specific type of loan modification or if your request for forbearance is denied you should immediately contact legal counsel for assistance (see above). When selecting an attorney, be sure to obtain the services of someone who has experience dealing with foreclosure cases and understands your rights pursuant to the Fair Foreclosure Act (NJSA 2A:50-53 et. Seq.) This act states that a creditor must give the debtor thirty (30) days notice before commencing a foreclosure and provide the possible availability of financial assistance by State, Federal or nonprofit organizations. (More information...)

 

10. What are the maximum fees a bank can charge for such things as overdrafts, processing, in-sufficient funds, and unavailable funds, etc.?


There is no state or federal law that limits what a bank can charge for its fees. The banks' policies regarding its fees should be available at each branch and should be provided at the time the account is opened. The open market normally dictates the limit of these fees as customers have the choice of what institution they wish to do business with.


11. What should I do if I'm applying for a mortgage loan over the telephone and the representative requests my credit card number in order to charge for an application fee, appraisal fee, or credit report?


It is not permissible pursuant to New Jersey Mortgage Processing Regulation N.J.A.C. 3:1-16.3 Application Process (a) & (b) for a mortgage broker or banker to collect any fees prior to providing the prospective borrower(s) with a written disclosure. This disclosure must indicate all of the fees to be collected from the borrower(s) during the application process and under what circumstances these fees are refundable. This disclosure then needs to be signed by the borrower(s) and returned to the lender prior to the fee being collected.

If a lender wishes to obtain a credit card number at the time of a telephone application it may do so as long as it does not charge the card until after it receives the signed disclosure. The "application disclosure" should be sent with a corresponding Good Faith Estimate within three (3) business days or prior to closing (whichever is earlier) of the application being taken. If you do not agree to the loan terms noted on the Good Faith Estimate and wish to cancel the application process, do not sign and return the application disclosure. If you do so, you are authorizing the company to collect this fee which may not be refundable if you withdraw your application.

If a lender charges your credit card before providing this disclosure and you subsequently withdraw your application you are entitled to a refund pursuant to the aforementioned regulation. If the lender does not promptly credit the subject card or send a reimbursement check you should file for assistance with the Division of Banking. Once this violation is proven, the broker or banker will be directed to refund you immediately and be subject to a fine and/or administrative action.


12. Is it legal for an institution to charge a New Jersey consumer a prepayment penalty on a loan?


Although New Jersey passed a law forbidding this type of fee pursuant to N.J.S.A. 46:10B-2 Prepayment of mortgage loan without penalty, there are certain types of loan products and lenders which this law does not apply.

Please be aware that the Alternative Mortgage Transactions Parity Act of 1982, which was enacted by Congress and codified 12 U.S.C. 3801 addresses the issue of prepayment penalties. This act basically notes that mortgage products other than fixed rate fixed term fully amortized conventional loans can include a prepayment penalty. This would cover any type of adjustable rate mortgage ("ARM") or mortgage product with a balloon note ("Balloon") for all mortgage loans that closed prior to July 1, 2003. As federal law preempts New Jersey State law, a prepayment penalty on these types of mortgage loan products would be legal.

You should be aware that in order to charge a prepayment penalty on an alternative type of mortgage (ARM or Balloon) it needs to be disclosed to the borrower on the Mortgage Note in the section "Borrowers Right to Repay." This section of the Mortgage Note will explain whether there is or is not a prepayment and how the amount of the penalty is calculated. The disclosure of a prepayment penalty can be also found in the Truth-in-Lending statement required by federal law to be sent to a borrower during the application process. This document will have a section titled "Prepayment" and indicate whether you may or will not have to pay a penalty if the loan is paid off early.

NOTE: Institutions regulated by the Office of the Comptroller of the Currency are not subject to New Jersey law. There are currently no federal laws disallowing lenders from charging prepayment penalties.


13. I believe that I am the victim of an advanced fee scam (the advancement of funds for the promise of a loan, lottery winnings, credit card, or other products/services etc.). What can I do?


If you believe that an illegitimate entity duped you in this regard, it is recommended that you consider the following course of action:

  • If you have not done so already, you should contact your local law enforcement agency and file a report/complaint against the company (theft by deception / fraud). You may also wish to follow up with your County Prosecutor’s Office to determine if it is willing to investigate.

  • Notify the source where you saw the advertisement so that it is aware that it should remove the ad so as other consumers are not victimized.

  • If you have not done so already, change any account numbers you provided to the subject entity to protect yourself from potential identity theft.

  • If you provided the company with your Social Security Number, then you should follow the steps detailed by the above links found in the "Identity Theft" section.

  • Contact your U.S. Postal Inspector by using the U.S. Postal Inspection Locator Service to determine if it is interested in investigating this matter.

  • Contact Phonebusters, a national anti-fraud call center educating the public about specific fraudulent telemarketing pitches, at 1-888-495-8501 to report this incident.

  • Contact your local FBI Office to determine if it is interested in investigating this matter.

  • Contact your local U.S. Secret Service Office to determine if it is interested in investigating this matter.

14. What is a "subprime loan"?


The term “subprime” refers to the credit characteristics of individual borrowers. Subprime borrowers typically have weakened credit histories that include payment delinquencies, and possibly more severe problems such as charge-offs, judgments, and bankruptcies. They may also display reduced repayment capacity as measured by credit scores, debt-to-income (DTI) ratios, or other criteria that may encompass borrowers with incomplete credit histories.

Subprime loans” are loans to borrowers displaying one or more of these characteristics at the time of origination or purchase. Such loans have a higher risk of default than loans to prime borrowers. Generally subprime borrowers display a range of credit risk characteristics, including one or more of the following:

  • Two or more 30-day delinquencies in the last 12 months, or one or more 60-day delinquencies in the last 24 months;
  • Judgment, foreclosure, repossession, or charge-off in the prior 24 months;
  • Bankruptcy in the last 5 years;
  • Relatively high default probability as evidenced by, for example, a credit bureau risk score (FICO) of 660 or below (depending on the product/collateral), or other bureau or proprietary scores with an equivalent default probability likelihood; and/or
  • Debt service-to-income ratio of 50% or greater, or otherwise limited ability to cover family living expenses after deducting total monthly debt-service requirements from monthly income.

Please Note: This list is illustrative rather than exhaustive and is not meant to define specific parameters for all subprime borrowers. Additionally, this definition may not match all market or institution specific subprime definitions, but should be viewed as a starting point from which the NJDOBI will expand examination efforts.

Get more information on the subprime market.

 
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