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A05753 Summary:

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A05753 Floor Votes:

A05753 Text:

 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          5753
 
                               2009-2010 Regular Sessions
 
                   IN ASSEMBLY
 
                                    February 19, 2009
                                       ___________
 
        Introduced  by  M.  of  A.  V. LOPEZ, AUBRY, SWEENEY, HOYT, ENGLEBRIGHT,
          FIELDS, WRIGHT, RAMOS, CAHILL, KAVANAGH, ROSENTHAL --  Multi-Sponsored
          by  -- M. of A. BING, CLARK, COOK, CYMBROWITZ, GLICK, MARKEY, MILLMAN,
          PHEFFER -- read once and referred to the Committee on Housing
 
        AN ACT to amend the public authorities law, in relation to the powers of

          the state of New York mortgage agency
 
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
 
     1    Section  1.  Subdivision  5  of section 2402 of the public authorities
     2  law, as amended by chapter 353 of the laws of 1984, is amended  to  read
     3  as follows:
     4    (5) "Mortgage". A loan owed to a bank secured by a first lien on a fee
     5  simple  or  leasehold  estate  in real property located in the state and
     6  improved by a residential structure, whether or not insured  or  guaran-
     7  teed  by  the  United States of America or any agency thereof.  The term
     8  "mortgage" shall also include a loan owed to a bank secured by a  second
     9  lien on a fee simple or leasehold estate in real property located in the
    10  state and improved by a residential structure, whether or not insured or

    11  guaranteed  by  the  United  States  of  America  or any agency thereof,
    12  provided, however, that such second lien: (a) secures a  loan  purchased
    13  by the agency, and (b) is made at the same time as a first lien securing
    14  a  loan  purchased  by the agency pursuant to its programs or is made at
    15  the same time as a new housing loan purchased by the agency pursuant  to
    16  section  twenty-four  hundred five-c of this part, provided that, in the
    17  case of any second lien, the mortgagor shall be obligated to  contribute
    18  from  his  or  her  own  verifiable  funds  an amount not less than such
    19  percentage as the agency shall determine, of the lower of  the  purchase
    20  price  or  appraised  value  of  the property subject to the first lien.

    21  "Real property" as used in this subdivision shall include air rights.
    22    For the purposes of this title and of section one hundred  ninety  and
    23  subsection [a] (a) of section one thousand four hundred fifty-six of the
    24  tax law, "mortgage" shall include housing loans as defined below. Except
    25  for  the  purposes  of  subdivision  seven  of section two thousand four
    26  hundred five and subdivision eight of section two thousand four  hundred
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD08856-01-9
        A. 5753                             2
 
     1  five-b  of  this [title] part, "mortgage" shall also include a loan owed

     2  to a bank by an individual borrower incurred for the purpose of  financ-
     3  ing the purchase of certificates of stock or other evidence of ownership
     4  of  an  interest in, and a proprietary lease from, a cooperative housing
     5  corporation formed for the purpose of the cooperative ownership of resi-
     6  dential real estate in the state, secured by an assignment  or  transfer
     7  of the benefits of such cooperative ownership, and containing such terms
     8  and conditions as the agency may approve.
     9    §  2.  Subdivision 5 of section 2402 of the public authorities law, as
    10  separately amended by chapters 376 and 1023 of  the  laws  of  1971,  is
    11  amended to read as follows:
    12    (5) "Mortgage". A loan owed to a bank secured by a first lien on a fee
    13  simple  or  leasehold  estate  in real property located in the state and
    14  improved by a residential structure, whether or not insured  or  guaran-

    15  teed  by  the  United States of America or any agency thereof.  The term
    16  "mortgage" shall also include a loan owed to a bank secured by a  second
    17  lien on a fee simple or leasehold estate in real property located in the
    18  state and improved by a residential structure, whether or not insured or
    19  guaranteed  by  the  United  States  of  America  or any agency thereof,
    20  provided, however, that such second lien: (a) secures a  loan  purchased
    21  by the agency, and (b) is made at the same time as a first lien securing
    22  a  loan  purchased  by the agency pursuant to its programs or is made at
    23  the same time as a new housing loan purchased by the agency pursuant  to
    24  section  twenty-four  hundred five-c of this part, provided that, in the

    25  case of any second lien, the mortgagor shall be obligated to  contribute
    26  from  his  or  her  own  verifiable  funds  an amount not less than such
    27  percentage as the agency shall determine, of the lower of  the  purchase
    28  price  or  appraised  value  of  the property subject to the first lien.
    29  "Real property" as used in this subdivision shall include air rights.
    30    Except for the purposes of subdivision seven of section  two  thousand
    31  four  hundred  five  of  this part, "mortgage" shall also include a loan
    32  owed to a bank by an individual borrower incurred  for  the  purpose  of
    33  financing  the  purchase  of  certificates of stock or other evidence of
    34  ownership of an interest in, and a proprietary lease from, a cooperative
    35  housing corporation formed for the purpose of the cooperative  ownership

    36  of  residential  real  estate  in the state, secured by an assignment or
    37  transfer of the benefits of such cooperative ownership,  and  containing
    38  such terms and conditions as the agency may approve.
    39    §  3.  Paragraph  (e)  of  subdivision 7 of section 2405 of the public
    40  authorities law, as amended by chapter 915  of  the  laws  of  1982,  is
    41  amended to read as follows:
    42    (e)  the mortgage constitutes a valid first lien or second lien on the
    43  real property described to the agency  in  accordance  with  subdivision
    44  five  of  section  twenty-four  hundred two of this part subject only to
    45  real property taxes not yet due, installments  of  assessments  not  yet
    46  due,  and  easements  and  restrictions of record which do not adversely
    47  affect, to a material degree, the use or value of the real  property  or
    48  improvements thereon;

    49    §  4.  Paragraph  (e)  of  subdivision 7 of section 2405 of the public
    50  authorities law, as amended by chapter 1023 of  the  laws  of  1971,  is
    51  amended to read as follows:
    52    (e)  the mortgage constitutes a valid first lien or second lien on the
    53  real property described to the agency  in  accordance  with  subdivision
    54  five  of  section  twenty-four  hundred two of this part subject only to
    55  real property taxes not yet due, installments  of  assessments  not  yet
    56  due,  and  easements  and  restrictions of record which do not adversely
        A. 5753                             3
 
     1  affect, to a material degree, the use or value of the real  property  or
     2  improvements thereon;
     3    §  5.  Paragraph  (f) of subdivision 8 of section 2405-b of the public

     4  authorities law, as added by chapter 915 of the laws of 1982, is amended
     5  to read as follows:
     6    (f) the mortgage constitutes a valid first lien or second lien on  the
     7  real  property  described  to  the agency in accordance with subdivision
     8  five of section twenty-four hundred two of this  part  subject  only  to
     9  real  property  taxes  not  yet due, installments of assessments not yet
    10  due, and easements and restrictions of record  which  do  not  adversely
    11  affect, to a material degree, the use or value [or] of the real property
    12  or improvements thereon;
    13    §  6.  Subdivision 4 of section 2428 of the public authorities law, as
    14  amended by chapter 555 of the laws  of  1989,  is  amended  to  read  as
    15  follows:
    16    4.  To  be  eligible for insurance under this article, a mortgage loan

    17  shall (a) (i) be a first lien of the kind which  is  commonly  given  to
    18  secure advances on, or the unpaid purchase price of, real property under
    19  the laws of the state together with any credit instrument secured there-
    20  by, provided, however, that a mortgage loan may be a second lien if such
    21  mortgage  loan  was  purchased  by  the  agency or (ii) be secured by an
    22  assignment or transfer of stock certificates or other evidence of owner-
    23  ship interest of the borrower in, and a proprietary lease from, a corpo-
    24  ration formed for the purpose of the cooperative ownership  of  residen-
    25  tial   real  estate  in  the  state;  (b)  secure  a  rehabilitation  or
    26  preservation loan on real property held in fee simple or on a  leasehold
    27  under  a proprietary lease or a lease having a period of years to run at
    28  the time the mortgage is insured under this article of at  least  twenty

    29  per centum greater duration than the remaining term of the mortgage; (c)
    30  contain  terms  with  respect  to prepayment, insurance, repairs, alter-
    31  ations, payment of taxes, special assessments, service [charge] charges,
    32  default reserves, delinquency charges,  foreclosure  proceedings,  addi-
    33  tional  and secondary liens, and such other matters as the agency may in
    34  its discretion prescribe; (d) be accompanied by certificates, issued  by
    35  such  officers  of  the  mortgage  financial  institutions,  independent
    36  appraisers or other persons as the agency may require,  certifying  that
    37  (i) where appropriate, the annual income to be derived from the property
    38  equals  not  less  than  one  hundred  and five per centum of the annual
    39  charges and expenses, including provision for reserves, satisfactory  to
    40  the  agency, for the amortization of subordinate mortgage loans over the

    41  remaining terms of such loans notwithstanding  the  provisions  thereof;
    42  (ii)  the remaining useful life of the property is greater than the term
    43  of the mortgage; and (iii) the property does not contain any substantial
    44  violations of local building maintenance and construction codes,  except
    45  that  in  the  case of a loan made to the owner of a property containing
    46  any such violations, the agency may insure or commit to insure such loan
    47  if the mortgagee and the owner have submitted a  plan,  satisfactory  to
    48  the  agency to eliminate such violations and the issuance of such insur-
    49  ance shall be conditioned on removal of such violations to the satisfac-
    50  tion of the local code enforcement agency; and (e)  satisfy  such  addi-
    51  tional  terms  and  conditions  as  the  agency  may prescribe. For pool
    52  insurance, the requirements of paragraph (b) of this  subdivision  shall
    53  not be applicable.

    54    §  7.  Subdivision 4 of section 2428 of the public authorities law, as
    55  amended by chapter 354 of the laws  of  1984,  is  amended  to  read  as
    56  follows:
        A. 5753                             4
 
     1    4.  To  be  eligible for insurance under this article, a mortgage loan
     2  shall (a) (i) be a first lien of the kind which  is  commonly  given  to
     3  secure advances on, or the unpaid purchase price of, real property under
     4  the laws of the state together with any credit instrument secured there-
     5  by, provided, however, that a mortgage loan may be a second lien if such
     6  mortgage  loan  was  purchased  by  the  agency or (ii) be secured by an
     7  assignment or transfer of stock certificates or other evidence of owner-
     8  ship interest of the borrower in, and a proprietary lease from, a corpo-

     9  ration formed for the purpose of the cooperative ownership  of  residen-
    10  tial   real  estate  in  the  state;  (b)  secure  a  rehabilitation  or
    11  preservation loan on real property held in fee simple or on a  leasehold
    12  under  a proprietary lease or a lease having a period of years to run at
    13  the time the mortgage is insured under this article of at  least  twenty
    14  per centum greater duration than the remaining term of the mortgage; (c)
    15  contain  terms  with  respect  to prepayment, insurance, repairs, alter-
    16  ations, payment of taxes, special assessments, service [charge] charges,
    17  default reserves, delinquency charges,  foreclosure  proceedings,  addi-
    18  tional  and secondary liens, and such other matters as the agency may in
    19  its discretion prescribe; (d) be accompanied by certificates, issued  by
    20  such  officers  of  the  mortgage  financial  institutions,  independent

    21  appraisers or other persons as the agency may require,  certifying  that
    22  (i) where appropriate, the annual income to be derived from the property
    23  equals  not  less  than  one  hundred  and five per centum of the annual
    24  charges and expenses, including provision for reserves, satisfactory  to
    25  the  agency, for the amortization of subordinate mortgage loans over the
    26  remaining terms of such loans notwithstanding  the  provisions  thereof;
    27  (ii)  the remaining useful life of the property is greater than the term
    28  of the mortgage; and (iii) the property does not contain any substantial
    29  violations of local building maintenance and construction codes,  except
    30  that  in  the  case of a loan made to the owner of a property containing
    31  any such violations, the agency may insure or commit to insure such loan
    32  if the mortgagee and the owner have submitted a  plan,  satisfactory  to

    33  the  agency to eliminate such violations and the issuance of such insur-
    34  ance shall be conditioned on removal of such violations to the satisfac-
    35  tion of the local code enforcement agency; and (e)  satisfy  such  addi-
    36  tional terms and conditions as the agency may prescribe.
    37    § 8. This act shall take effect immediately, provided that:
    38    (a)  the  amendments  to  subdivision  5 of section 2402 of the public
    39  authorities law made by section one of this act shall be subject to  the
    40  expiration  and  reversion of such subdivision pursuant to section 16 of
    41  chapter 915 of the laws of 1982, as amended, when  upon  such  date  the
    42  provisions of section two of this act shall take effect;
    43    (b)  the  amendments to paragraph (e) of subdivision 7 of section 2405
    44  of the public authorities law made by section three of this act shall be

    45  subject to the expiration and reversion of such subdivision pursuant  to
    46  section  16  of  chapter  915 of the laws of 1982, as amended, when upon
    47  such date the provisions of section four of this act shall take effect;
    48    (c) the amendments to paragraph (f) of subdivision 8 of section 2405-b
    49  of the public authorities law made by section five of this act shall not
    50  affect the repeal of such section and shall be  deemed  repealed  there-
    51  with; and
    52    (d)  the  amendments  to  subdivision  4 of section 2428 of the public
    53  authorities law made by section six of this act shall be subject to  the
    54  expiration  and  reversion of such subdivision pursuant to section 19 of
    55  chapter 555 of the laws of 1989, as amended, when  upon  such  date  the
    56  provisions of section seven of this act shall take effect.