US Bank, N.A. v. Nikia Hough (067029; A-82-83-10)

US Bank, N.A. v. Nikia Hough (067029; A-82-83-10)

  According to the plain language of N.J.A.C. 5:80-

26.18(e), the portion of the loan exceeding the

permissible limits of N.J.A.C. 5:80-26.8(b) is void

and not collectible by the lender; the remainder of

the loan is valid and secured by the affordable

housing unit.5-22-12

US BANK, N.A. V. NIKIA HOUGH, ET AL. A-5623-08T3

US BANK, N.A. V. NIKIA HOUGH, ET AL.

A-5623-08T3 09-14-10

This is a real property foreclosure action. The primary

question presented is whether a commercial lender, which makes a

loan secured by a mortgage on an affordable housing unit in

excess of the amount permitted by N.J.A.C. 5:80-26.8(b), is

prohibited from seeking to foreclose upon the mortgage. We

answered the question in the affirmative, holding that the

mortgage is void pursuant to N.J.A.C. 5:80-26.18(e).

A secondary question raised in the appeal is whether

N.J.A.C. 5:80-26.18(e) also prohibits the lender from seeking to

collect upon the underlying debt instrument. We answered that

question in the negative, holding that the regulation does not

bar the lender from seeking to collect upon the underlying

obligation.