New Jersey Statutes Title 17. Corporations and Institutions for Finance and Insurance 17 § 16F-18

a. Each mortgagee or servicing organization requiring a mortgagor to make payments into an escrow account shall make each disbursement from the escrow account before the amount due becomes delinquent, provided that funds paid into the escrow account by the mortgagor are sufficient for the disbursement. If there is a shortage of funds which will result in a failure to make a payment on behalf of the mortgagor, the mortgagee or servicing organization shall promptly notify the mortgagor of the shortage. The mortgagee or servicing organization is permitted, but not required, to make a payment on behalf of the mortgagor even though there are not sufficient funds in the particular escrow account to cover the payment. Penalties or interest, or both, for late payments for amounts due and payable from an escrow account shall be paid, but shall not be charged to the mortgagor unless it can be shown that the penalty was a direct result of the mortgagor's error or omission.

b. A mortgagee or servicing organization shall notify a mortgagor in writing within 30 days after his escrow account is charged a penalty for late payment.

c. If a mortgagor is aggrieved by a violation of this section, which violation is not remedied in a reasonable, timely, and good faith manner by the mortgagee or the servicing organization, after a good faith effort to resolve the dispute is made by the mortgagor, the mortgagor may bring an action in a court of competent jurisdiction, and, if the court finds that actual damages have occurred, the court shall award, in addition to actual damages, the amount of $500, together with court costs and reasonable attorneys' fees. No selling servicing organization shall be liable under this section for any act or omission of the purchasing servicing organization.