New Jersey Statutes 46:9-8.1. Definitions
Terms Used In New Jersey Statutes 46:9-8.1
- Interest rate: The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time. Interest is paid on loans or on debt instruments, such as notes or bonds, either at regular intervals or as part of a lump sum payment when the issue matures. Source: OCC
- Lien: A claim against real or personal property in satisfaction of a debt.
- Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
- Mortgage loan: A loan made by a lender to a borrower for the financing of real property. Source: OCC
- Mortgagee: The person to whom property is mortgaged and who has loaned the money.
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
- real property: include lands, tenements and hereditaments and all rights thereto and interests therein. See New Jersey Statutes 1:1-2
a. “Mortgage loan” means any loan or line of credit, except a construction loan, which states a maximum specified principal amount and which is secured by an interest in real property.
b. “Construction loan” means a loan for a fixed term of no more than three years which is secured by a lien on real property and which is made by the lender for the sole purpose of financing the erection, construction, completion, addition to, alteration or repair of improvements to real property.
c. “Line of credit” means an agreement whereby a lender is obligated to provide a specified amount of credit to a borrower from time to time. The agreement may include provisions to amend or change the interest rate or terms of repayment and shall be an obligation for the purposes of this section notwithstanding the inclusion of one or more of the following limitations and conditions:
(1) An expiration date of the agreement or an option of the lender to cancel the agreement on notice to the borrower;
(2) The financial condition of any borrower;
(3) Continued compliance by the borrower with the terms of the agreement and any mortgage or security agreement securing the amounts advanced pursuant to the agreement;
(4) The absence of an adverse change in the value or condition of any collateral securing the agreement;
(5) A requirement of certain procedures for activating the obligation to make advances pursuant to the agreement; or
(6) A decision of the lender not to continue to engage in the business of providing lines of credit on terms similar to the agreement.
d. “Modification” means:
(1) With respect to a mortgage loan other than a line of credit, a change in the interest rate, due date or other terms and conditions of a mortgage loan except an advance of principal; or
(2) With respect to a line of credit, a change in the interest rate, due date or other terms and conditions and an advance of principal made pursuant to the line of credit but only to the extent that the advance does not cause the principal balance due to exceed the principal amount stated in the line of credit plus accrued interest;
(3) Payments for taxes, assessments and insurance and other payments made by the mortgagee pursuant to the terms of the mortgage or line of credit are included with the amounts which have priority pursuant to section 2 of P.L.1985, c.353 (C. 46:9-8.2) and are not included in the phrase “advance of principal;”
(4) “Modification” does not include a substitution in the collateral.
L.1985,c.353,s.1; amended 1997, c.427, s.1; 1998, c.130.