New Jersey's Anti-Predatory Lending Act protects borrowers by:
Question & Answer
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Eliminating all closing costs
The APLA does not eliminate closing costs — it limits and regulates certain fees on high-cost loans to ensure they are not excessive or deceptive, but legitimate closing costs remain a normal part of mortgage transactions in New Jersey.
Limiting fees, prepayment penalties, and requiring disclosures
Guaranteeing low interest rates
No law can guarantee low interest rates, as rates are determined by market forces, the Federal Reserve, and individual borrower creditworthiness — the APLA regulates the fairness of loan terms and disclosures, not the market rate of interest.
Providing free legal services
The APLA does not provide free legal services to borrowers — while it may require referrals to housing counselors in some circumstances, the provision of free legal representation is not part of this statute and falls under separate legal aid programs.
Why is this correct?
Answer B is correct because the New Jersey Anti-Predatory Lending Act specifically targets the three most common predatory lending tools: excessive fees (capped as a percentage of the loan), prepayment penalties (restricted to prevent borrowers from being trapped), and inadequate disclosures (lenders must provide clear, timely information about loan terms). These provisions directly address the mechanisms lenders used to exploit vulnerable borrowers, and together they form the core of the statute's consumer protections. The law does not eliminate all costs or guarantee rates — it regulates the fairness and transparency of those costs.
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