88 N.J.L.J. 629
September 30, 1965
Foreclosing Usurious Mortgage
An attorney inquires whether it is proper for him to handle
the foreclosure of a mortgage involving a plainly usurious loan
(when he did not participate in the original mortgage transaction).
The mortgagee's taking of usury violated the express prohibition of N.J.S.A. 31:1-1 and was, therefore, an unlawful action. However, the only penalty imposed by the statute is the loss of the money which it prohibits the lender from taking. The Legislature has specifically provided that in all actions to enforce any such usurious mortgage loan the lender may recover the amount or value actually lent without interest or costs of the action, and no more. (N.J.S.A. 31:1-3)
Since the Legislature in terms thus permits the lender to institute the mortgage foreclosure proceeding in the courts of this State, it necessarily follows that he should be entitled to the assistance of an attorney to recover what the law permits him to recover. The attorney, not having participated in the original usurious transaction, may therefore properly represent him in the foreclosure of the mortgage.