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Effective January 2, 2027, NJHMFA’s has adjusted the Early Payment Default (EPD) Policy as reflected in the updated Mortgage Purchase Agreement. The change is for billing purposes only. All loans which fail the GSE/Insurer’s EPD policy may be subject to immediate repurchase. Quality Control reviews will remain in place as required. There is no change to the First Payment Default policy.
Updated EPD Policy: EPD occurs when any of the first four (4) mortgage payments due to NJHMFA become ninety (90) calendar days or more delinquent. With Early Payment Default loans, NJHMFA may, in its sole discretion, require the Lender to repay the full premium amount of 2.75 points of the purchased Unpaid Principal Balance (UPB) plus a $2,000 EPD fee.
Police and Fire loans are subject to the $2,000 EPD penalty only and repurchase as applicable.
NJHMFA monitors loans for EPDs to mitigate risk. If an EPD is determined, NJHMFA’s Audit Division may perform a QC review of the file to determine additional risks and/or loan quality trends which may lead to immediate repurchase by the Lender.
Additional EPD Pre and Post-Purchase requirements:
NJHMFA tracks all pre-purchase and post purchase delinquencies. If any mortgage payments made prior to purchase by the Agency, or the first mortgage payment due to the Agency is delinquent whereby the delinquency is greater than or equal to thirty (30) calendar days, the Lender shall be subject to a $2,000 first payment delinquency fee. In addition, the Lender shall be obligated to indemnify the Agency for two (2) years from all liabilities, obligations, losses, damages, penalties, fines, forfeitures, court costs, and reasonable attorneys’ fees, judgements, suits, and any other cost or fees directly or indirectly resulting from delinquency of the loan. If the Lender does not accept the indemnification obligation requirement, immediate repurchase shall be required. If a loan has not been purchased by the Agency, the loan will not be purchased without the executed indemnification.
Lenders will continue to receive initial notifications and monthly invoicing for all purchased loans that meet criteria for EPDs.
Wiring of payment is preferred and instructions will be provided on the invoice, however, checks may also be sent for payment.
If sending checks, please make check payable to NJHMFA and mail to:
New Jersey Housing and Mortgage Finance Agency
Attn: Single Family, Finance - EPD
637 South Clinton Avenue
Trenton, New Jersey 08611-2085
The Seller Guide will be revised to reflect the updated EPD policy during the next scheduled Seller Guide enhancement of 2027.
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