Jersey Court Ruling Exposes State Lenders, Brokers to New Liabilities
June 16, 2003
Federal thrift regulators were wrong in issuing a regulation in 1996 clarifying that state restrictions on prepayment fees are preempted under the federal Alternative Mortgage Transactions Parity Act, according to a New Jersey appeals court. The ruling in Glukowsky v. Equity One could make NJ-chartered lenders that made loans with prepayment features under federal preemption vulnerable to state lawsuits, according to lawyers.