New Jersey Statutes Title 17. Corporations and Institutions for Finance and Insurance 17 § 12B-236

(a) There shall be no existing default in the performance of the terms and conditions of said mortgage and obligation;  and

(b) The applicant shall agree to perform all of the other terms and agreements of said mortgage and obligation;  and

(c) The applicant shall agree to pay monthly, in reduction of the principal sum due on said mortgage and obligation, such amount as the association shall require, not exceeding, however, 1% of the amount of the original loan secured by said mortgage.  Such amount shall be applied first to the payment of interest and other lawful charges, and the surplus to the reduction of the principal.  Nothing herein contained shall prevent the association and the applicant from agreeing upon the payment of larger monthly payments.

If, at the date of said dissolution, any default has existed for more than 2 months in the performance of any of the terms and conditions of said mortgage and obligation, the application for extension of time may be refused, or granted upon such terms as the association may prescribe.

The provisions of this section shall not be construed to prevent an association in liquidation from making any compromise which it is otherwise authorized to make.