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New Jersey Court Says Federal Thrift Regulator Cannot Pre-Empt Prepay Laws.
A New Jersey Appellate Court has ruled that the Office of Thrift Supervision does not have the right to pre-empt state laws forbidding prepayment penalties on residential mortgages.
In the case in question, a borrower sued Equity One after the company charged him a prepayment penalty. A New Jersey Trial Court ruled for Equity One, saying that the New Jersey state law disallowing such penalties was pre- empted by OTS regulations. The recent decision by the Superior Court of the New Jersey Appellate Division overturns the ruling on the grounds that the OTS rule oversteps the authority given to the agency by the 1982 Alternative Mortgage Transaction Parity Act.
As part of the Parity Act, OTS established a rule in 1996 that said it would pre-empt all state laws regarding prepayment penalties and late fees. Last year, the federal agency removed the rule, originally effective Jan. 1 of this year. After complaints from the mortgage industry, that date was delayed to allow mortgage lenders more time to comply with state regulations. Currently, OTS pre-emption is set to end on July 1.
It appears that OTS' removal of the 1996 rule will be challenged by the National Home Equity Mortgage Association, who claims that OTS has exceeded its authority by ...
- Parity Act Preemption Upheld: New Jersey Supreme Court Reverses Appellate...
- News wire article from: Mondaq Business Briefing July 2, 2004 700+ words
The New Jersey Supreme Court...provided by the Parity Act and the 1996 OTS...et seq. (the "Parity Act"), which has...transactions as written. New Jersey's Appellate Division...in violation of New Jersey's prepayment...authority of the Parity Act ...
- New Jersey Supreme Court Ruling Seen In OTS Parity Act Prepay Penalty Suit.
- Magazine article from: National Mortgage News May 31, 2004 700+ words
...penalties. The New Jersey Supreme Court ruled...Mortgage Transaction Parity Act and "its interpretation...Plaintiffs sued a New Jersey lender to require...empted under the Parity Act. In 2003, the...illegal. But the New Jersey Supreme Court rejected...
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- Magazine article from: Community Banker Horn, Michael M. December 1, 2003 700+ words
...as well as the applicability of New Jersey's Parity Act and the recently proposed amended...preemption determination for New Jersey. New Jersey's Parity Act Three years ago, New Jersey enacted a Parity Act with the purpose of ...
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- News wire article from: Mondaq Business Briefing July 26, 2007 700+ words
...has issued a commitment. A New Jersey law prohibits charging prepayment...federal preemption by operation of New Jersey State Bank Parity Act.) Several months ago, the...from the Attorney General of New Jersey indicating that, while New...
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- News wire article from: Mondaq Business Briefing October 31, 2002 700+ words
...under the Alternative Mortgage Transaction Parity Act of 1982 (the "Parity Act") that are made by "state housing creditors...cost loan regulations were not preempted by the Parity Act on the novel theory that the provisions of the...
- U.S. Supreme Court Declines to Hear Case Challenging 'Parity Act'.
- Magazine article from: National Mortgage News October 8, 2001 700+ words
...challenged a federal law, known as the Parity Act, that pre-empts certain state restrictions...the Alternative Mortgage Transactions Parity Act facilitates nationwide lending by allowing...that the pre- emptive powers of the Parity Act prevent states from protecting their...
- OTS May Change Parity Act.(United States Office of Thrift Supervision)(Brief...
- Magazine article from: Origination News Collins, Brian May 1, 2002 700+ words
...is proposing once again to amend its Parity Act regulations because of concerns the rules...The Alternative Mortgage Transaction Parity Act (through its preemption powers) facilitates...courts upheld the preemptive powers of the Parity Act last year and blocked a Virginia regulator...
- OTS to Revisit Parity Act Due to 'Predatory' Concerns.(Office of Thrift...
- Magazine article from: Origination News Collins, Brian March 22, 2002 700+ words
...Supervision is once again taking a look at its Parity Act regulations because of concerns it is...the Alternative Mortgage Transaction Parity Act) to avoid compliance with state consumer...However, many lenders rely on the Parity Act, because it levels the playing field...
- The Mental Health Parity Act. (Health Insurance Troubleshooter)
- Magazine article from: The Exceptional Parent Epstein, Richard December 1, 1997 700+ words
...thought that when the new Mental Health Parity Act went into effect next month, many of...reports that suggest that the Mental Health Parity Act may be applied in such away that it may...reached. A step forward The Mental Health Parity Act, a federal law passed in October 1996...
- Parity Act: Judge Backs Revisions.
- Magazine article from: Origination News Collins, Brian August 1, 2003 700+ words
A Parity Act regulation has survived its first legal...the Alternative Mortgage Transaction Parity Act to pre-empt state laws that restrict...Federally-chartered lenders, which the Parity Act was designed to prevent. "The plaintiffs...
Source: HighBeam Research, New Jersey Court Says Federal Thrift Regulator Cannot Pre-Empt Prepay...