In mortgage lending, what is typically NOT allowed by NJ Administrative Code?

• A. Charging fees for late payment
• B. Assessing charges not specifically authorized
• C. Offering promotional discounts
• D. Setting competitive interest rates

Answer: (B)

In mortgage lending, the New Jersey Administrative Code places strict regulations on the types of fees and charges that lenders can impose on borrowers. Specifically, assessing charges that are not explicitly authorized by law is prohibited. This is to protect consumers from unexpected fees that were not disclosed or agreed upon in the mortgage agreement, ensuring transparency and fairness in lending practices.

Charging fees for late payment is a standard industry practice and is typically permitted as long as it is disclosed to borrowers upfront. Offering promotional discounts can be an effective marketing strategy for lenders and is generally allowed, provided that these promotions are clear and do not violate other legal provisions. Similarly, lenders are allowed to set competitive interest rates as a part of their business strategy, as long as they comply with all applicable regulations.

It's crucial for mortgage loan originators and lenders to be aware of these restrictions to foster trust with their clients and avoid legal repercussions associated with non-compliance.