STATE OF NEW YORK
________________________________________________________________________
6045
2021-2022 Regular Sessions
IN ASSEMBLY
March 5, 2021
___________
Introduced by M. of A. ANDERSON -- read once and referred to the Commit-
tee on Housing
AN ACT to amend the private housing finance law, in relation to enacting
the "home mortgage bridge loan assistance act of 2021"; and to amend
the state finance law, in relation to establishing the home mortgage
bridge loan assistance fund
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The private housing finance law is amended by adding a new
2 article 28 to read as follows:
3 ARTICLE 28
4 HOME MORTGAGE BRIDGE LOAN
5 ASSISTANCE
6 Section 1250. Short title.
7 1251. Legislative findings and purpose.
8 1252. Definitions.
9 1253. Home mortgage bridge loan assistance.
10 1254. Notice, timing and stay of proceeding requirements.
11 1255. Eligibility.
12 1256. Temporary payments of assistance.
13 § 1250. Short title. This article shall be known and may be cited as
14 the "home mortgage bridge loan assistance act of 2021".
15 § 1251. Legislative findings and purpose. (1) Findings. The legisla-
16 ture hereby finds and declares that:
17 (a) this state and the United States have experienced the collapse of
18 a sizeable primary and secondary real estate market bubble which few
19 foresaw and many now suffer the wealth destructive effects of;
20 (b) this state and the United States are in consequence now suffering
21 an economic slowdown as consumers trim spending and concentrate upon
22 paying down debt, while financial institutions and other business firms
23 trim investment expenditures pending a return of consumer spending;
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD04759-01-1
A. 6045 2
1 (c) the economic slowdown afflicting this state and the United States
2 has driven large numbers of residents into temporary involuntary unem-
3 ployment or underemployment, thereby lowering incomes, spending and
4 investment yet further, while rendering debt payment correspondingly
5 more difficult for many;
6 (d) there is in consequence a danger that many otherwise credit worthy
7 homeowners' capacity to remain current on mortgage payments will deteri-
8 orate yet further, resulting in widespread default, multiple costly
9 foreclosure proceedings, distress sales of homes, consequent further
10 distress to financial institutions' balance sheets and solvency, growing
11 rates of avoidable homelessness, and significant deterioration of aban-
12 doned housing stock and neighborhoods;
13 (e) foreclosed homes, abandoned housing stock and consequently deteri-
14 orating buildings and neighborhoods not only detrimentally affect those
15 who needlessly lose their homes and the neighborhoods in which they
16 reside, but also drain wealth from otherwise healthy lending insti-
17 tutions and non-distressed home mortgage borrowers, thereby harming the
18 health of the broader economy yet further;
19 (f) while the current economic crisis demands immediate action to
20 avoid unnecessary foreclosures, help revitalize and stabilize our commu-
21 nities and reinvigorate mortgage lending, business cycles are part of
22 the economic fabric of the state and the nation and therefore, a tempo-
23 rary bridge loan mortgage payment assistance program would benefit home
24 mortgage borrowers, lenders and neighborhoods not only in the current
25 downturn, but also in future conventional economic downturns;
26 (g) empirical evidence reveals that many temporarily troubled mortgage
27 borrowers prove able to retain their homes and pay off their mortgages
28 without modification when offered bridge loan assistance until broader
29 economic conditions improve, thereby staving off growing default, fore-
30 closure, homelessness and neighborhood deterioration rates, as well as
31 yet further worsening of economic conditions;
32 (h) temporary bridge loan mortgage assistance programs have according-
33 ly proved highly successful in cost effectively limiting foreclosure
34 rates and attendant economic and social ills in several states, most
35 notably in Pennsylvania, Connecticut, Maryland and Nevada; and
36 (i) a temporary bridge loan mortgage payment assistance program is
37 highly likely to redound in a cost effective manner to the benefit of
38 home mortgage borrowers, lenders, neighborhoods, and the broader public
39 of this state.
40 2. Purpose. The legislature declares that the purpose of this article
41 shall be to establish a program to afford bridge loan assistance to home
42 mortgage debtors facing temporary difficulties in remaining current on
43 mortgage loan payments through no fault of their own so as to avoid many
44 avoidable public and private ills.
45 § 1252. Definitions. As used in this article, the following terms
46 shall have the following meanings:
47 1. "Commissioner" means the commissioner of housing and community
48 renewal.
49 2. "Division" means the division of housing and community renewal.
50 3. "Event" means a qualifying financial hardship beyond the
51 mortgagor's control as defined in paragraph (a) of subdivision three of
52 section twelve hundred fifty-three of this article.
53 4. "Gross household income" means the sum of the incomes of the appli-
54 cant, his or her spouse and children residing in the same household as
55 the applicant, as well as the incomes of any other residents of the
56 household declared by the applicant to be dependents for federal
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1 personal income taxation purposes. Included in such term are all forms
2 of monetary assistance received by such members of the applicant's
3 household.
4 5. "Net effective income" means an applicant's gross household income
5 less local, state and federal income and social security taxes.
6 6. "Total housing expenses" means the sum of the mortgagor's monthly
7 mortgage payments, including escrows, utility costs, property hazard
8 insurance premiums, real property taxes and homeowner's fees imposed for
9 the maintenance of any common areas.
10 § 1253. Home mortgage bridge loan assistance. 1. Authority. (a) The
11 commissioner shall establish, within the division, a program to afford
12 temporary supplemental mortgage payments of approved mortgagors. Such
13 program shall be called the "home mortgage bridge loan assistance
14 program". The assistance provided pursuant to this article shall be
15 called "home mortgage bridge loan assistance".
16 (b) The commissioner shall promulgate such rules and forms as shall be
17 necessary to implement the provisions of this article, and shall publish
18 and enforce such rules.
19 (c) The aggregate amount of home mortgage bridge loan assistance
20 provided to any mortgagor shall not exceed sixty thousand dollars, or
21 extend beyond twenty-four or thirty-six months, and shall ultimately be
22 recovered from beneficiaries after their employment resumes, as provided
23 pursuant to this article.
24 (d) The division is authorized to provide home mortgage bridge loan
25 assistance pursuant to this article only at such time as funds have been
26 appropriated or made available for the home mortgage bridge loan assist-
27 ance program.
28 2. Eligible mortgages. Except as otherwise provided in subdivision
29 four of section twelve hundred fifty-four of this article the division
30 shall make home mortgage bridge loan assistance available for the
31 payment of mortgages only on one, two, three and four family residences
32 and for single family residences in condominiums, housing cooperatives
33 or manufactured homes in connection with which:
34 (a) the mortgaged property is the mortgagor's principal place of resi-
35 dence;
36 (b) the mortgaged property is located in this state;
37 (c) the mortgagor, prior to the occurrence of an event had a total
38 pre-event income that was less than one hundred twenty percent of the
39 median family income for the metropolitan statistical area or statewide
40 nonmetropolitan area where the property is located, as most recently
41 determined and published by the department of housing and urban develop-
42 ment;
43 (d) the mortgagor does not own other residential property that is
44 subject to a mortgage lien;
45 (e) the mortgagee has given the mortgagor notice, pursuant to section
46 twelve hundred fifty-four of this article, that it intends to foreclose
47 on the mortgage;
48 (f) the mortgagor has applied to the division for assistance pursuant
49 to section twelve hundred fifty-five of this article;
50 (g) at least two full monthly installments due upon the mortgagor's
51 mortgage remain unpaid after application of any partial payments that
52 might have been accepted by the mortgagee but not yet applied to the
53 mortgagor's account;
54 (h) the mortgagor is suffering temporary financial hardship owing to
55 circumstances beyond his or her control, as defined in subdivision three
56 of this section, which renders the mortgagor unable to bring his or her
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1 account current within the sixty day period commencing with receipt of
2 the mortgagee's notice of intention to foreclose;
3 (i) the mortgagor has not been more than sixty days delinquent on a
4 residential mortgage within the five-year interval preceding the delin-
5 quency or the filing for unemployment insurance under subdivision four
6 of section twelve hundred fifty-four of this article in connection with
7 which assistance is requested of the division, unless the mortgagor
8 demonstrates that the prior delinquency also resulted from an event; and
9 (j) there is a reasonable likelihood that the mortgagor will be able
10 to resume full mortgage payments not later than twenty-four months (or
11 not later than thirty-six months, in periods of high unemployment, as
12 determined from time-to-time by the commissioner) after the commencement
13 of home mortgage bridge loan assistance payments by the division to the
14 mortgagee, and that the mortgagor will pay the mortgage in full either
15 by its maturity date or by a later date agreed to with the mortgagee.
16 3. Temporary financial hardship beyond control of mortgagor. The
17 commissioner shall determine whether that financial hardship which
18 impedes timely mortgage payment may be temporary and beyond the control
19 of the mortgagor by reference to verified impediments.
20 (a) Qualifying financial hardship beyond the mortgagor's control.
21 Circumstances beyond the mortgagor's control, not including termination
22 from paid employment, which result in financial hardship to the mortga-
23 gor include:
24 (i) involuntary loss of employment by the mortgagor;
25 (ii) involuntary reduction of salary, wage or other earnings on the
26 part of the mortgagor; or
27 (iii) any other financial hardship determined by regulation to be
28 beyond the mortgagor's control.
29 (b) Determination as to whether financial hardship may be temporary.
30 Factors that the commissioner shall consider when evaluating whether the
31 mortgagor has a reasonable prospect of resuming full mortgage payments
32 within twenty-four or thirty-six months, from the commencement of home
33 mortgage bridge loan assistance payments, and of being able to pay the
34 mortgage in full by maturity or by a later date agreed to by the mortga-
35 gee include:
36 (i) prior work history, experience, training, opportunities for
37 retraining and similar factors which may affect future employment oppor-
38 tunities;
39 (ii) debt reduction or other income changes sufficient to enable the
40 mortgagor to resume full mortgage payments;
41 (iii) noncash benefits that may reduce household expenses, such as
42 food stamps or free medical services for military or low-income fami-
43 lies;
44 (iv) changes in income or recurring expenses that may be affected by
45 changes in the age, composition or employment of members of the house-
46 hold;
47 (v) potential for repayment of short-term or installment debt;
48 (vi) delinquencies in other debts which seriously jeopardize continued
49 ownership of the home, which cannot be cured by a mortgage assistance
50 loan;
51 (vii) a favorable work and credit history;
52 (viii) a history of timely mortgage payments when employed;
53 (ix) lack of an impediment or disability that prevents reemployment;
54 (x) evidence that the mortgagor is actively seeking work; and
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1 (xi) any other consideration determined by the commissioner to be
2 relevant to evaluating whether the mortgagor's financial hardship is
3 temporary.
4 § 1254. Notice, timing and stay of proceeding requirements. 1.
5 Requirements. No mortgagee or agent thereof, or any mortgage servicer,
6 may accelerate any eligible mortgage obligation as defined in subdivi-
7 sion two of section twelve hundred fifty-three of this article, or
8 commence any legal action, including mortgage foreclosure, to recover on
9 such obligation, or take possession of any security of the mortgagor for
10 such mortgage obligation, until: (a) the mortgagor is notified as
11 prescribed in subdivision two of this section, pursuant to such form and
12 in such manner as the commissioner shall prescribe by rule; and (b) the
13 commissioner has made a determination not to extend home mortgage bridge
14 loan assistance, or until the applicable time periods prescribed in
15 subdivisions two and three of this section have expired, whichever is
16 earlier.
17 2. Timing and notice requirements. (a) Timing. No mortgagee or agent
18 thereof, or any mortgage servicer, may accelerate any eligible mortgage
19 obligation as defined in subdivision two of section twelve hundred
20 fifty-three of this article, or commence any legal action, including
21 mortgage foreclosure, to recover on such obligation, or take possession
22 of any security of the mortgagor for such mortgage obligation, until the
23 mortgagor is at least sixty days contractually delinquent in making his
24 or her mortgage payments, or in violation of some other contractual
25 provision of such mortgage.
26 (b) Notice. Any mortgagee or agent thereof, or any mortgage servicer,
27 before accelerating any eligible mortgage obligation as defined in
28 subdivision two of section twelve hundred fifty-three of this article,
29 or commencing any legal action, including mortgage foreclosure, to
30 recover on such obligation, or taking possession of any security of the
31 mortgagor for such mortgage obligation, shall, in addition to complying
32 with the requirements prescribed in subdivision one of this section and
33 paragraph (a) of this subdivision, comply with the following notice
34 requirements:
35 (i) notice shall be given by a uniform notice form, application form
36 and by any other documentation concerning home mortgage bridge loan
37 assistance, to be prepared by the commissioner;
38 (ii) the notice, which may be provided by (A) first class mail or (B)
39 in any other manner agreed to by the mortgagor in writing, shall advise
40 the mortgagor of his or her delinquency or other default under the mort-
41 gage;
42 (iii) the notice shall advise the mortgagor that he or she has thirty
43 calendar days from the date of the notice to meet face-to-face with a
44 designated consumer credit counseling agency designated by the commis-
45 sioner, with a view to resolving the delinquency or default by restruc-
46 turing the loan payment schedule or in some other manner through negoti-
47 ations with the mortgagee or its servicer or other agent who has sent
48 the notice; and
49 (iv) the notice shall advise the mortgagor that, should he or she be
50 unable to resolve the delinquency or default within thirty calendar days
51 of the first contact made with the consumer counseling agency, and wish
52 to be considered for home mortgage bridge loan assistance pursuant to
53 this article, he or she must apply for such assistance no later than ten
54 calendar days from the end of said thirty day period, to the division at
55 either an address, including an email address, or a telephone number,
56 both to be provided in the notice itself, to be considered.
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1 3. Mortgagor's receipt of default notice. (a) The consumer credit
2 counseling agency shall promptly notify any and all mortgagees secured
3 by the mortgagor's real property of the date that first contact was made
4 with the consumer counseling agency by the mortgagor and that the mort-
5 gagor is acting pursuant to the procedures stipulated in this section.
6 (b) No mortgagee notified pursuant to paragraph (a) of this subdivi-
7 sion shall commence or continue any legal proceeding against the
8 mortgagor's real property for at least ten calendar days from the end of
9 the thirty day period that commences from the first contact the mortga-
10 gor makes with a credit counseling agency as stated in such notice.
11 (c) Should the mortgagor apply for home mortgage bridge loan assist-
12 ance pursuant to subparagraph (iv) of paragraph (b) of subdivision two
13 of this section, the commissioner shall make a determination of eligi-
14 bility or non-eligibility within sixty calendar days of receipt of the
15 application. Upon receipt of the application, the commissioner also
16 shall promptly inform any and all mortgagees secured by the mortgagor's
17 real property that an application has been received pursuant to this
18 article, and shall inform the same of both the date of receipt and the
19 prohibition stated in paragraph (d) of this subdivision.
20 (d) During the period over which a mortgagor's application made to the
21 division pursuant to this article is pending, no mortgagee shall
22 commence or continue any foreclosure or related legal action upon its
23 mortgage with the mortgagor.
24 (e) If (i) the mortgagor fails to meet with a designated consumer
25 credit counseling agency within the designated time period prescribed by
26 subparagraph (iii) of paragraph (b) of subdivision two of this section;
27 (ii) the mortgagor does not apply for home mortgage bridge loan assist-
28 ance within the time period prescribed by subparagraph (iv) of paragraph
29 (b) of subdivision two of this section; or (iii) the mortgagor's appli-
30 cation pursuant to this subdivision is denied, then the mortgagee may
31 take any legal actions that are available to enforce the mortgage, free
32 of the requirements of this article.
33 4. Other eligible mortgages. (a) Any mortgagor who files for unem-
34 ployment insurance with the department of labor shall receive a notice
35 from such department stating that he or she may be eligible for home
36 mortgage bridge loan assistance pursuant to this article.
37 (b) Such notice shall be given by a uniform notice prescribed by the
38 commissioner.
39 (c) The notice shall describe the purpose of the home mortgage bridge
40 loan assistance program, include an application for home mortgage bridge
41 loan assistance and notify the filer that he or she may consult with a
42 consumer credit counseling agency with a view to applying for home mort-
43 gage bridge loan assistance.
44 (d) Notwithstanding the conditions for home mortgage bridge loan
45 assistance eligibility prescribed by this article, a mortgagor who is
46 not contractually in default on his or her mortgage loan and who is
47 faced with an event, may apply for home mortgage bridge loan assistance
48 on a form prescribed by the commissioner which includes the information
49 prescribed in subdivision one of section twelve hundred fifty-five and
50 section twelve hundred fifty-six of this article.
51 (e) The division shall make a determination of eligibility within
52 sixty calendar days of receipt of the application.
53 (f) Should the mortgagor's application for home mortgage bridge loan
54 assistance be denied, the mortgagor may reapply pursuant to this subdi-
55 vision for such assistance not less than six months from the date of
56 such determination, unless there is a material change of circumstances.
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1 § 1255. Eligibility. 1. Eligible mortgagors. With the partial excep-
2 tion of cases covered by subdivision four of section twelve hundred
3 fifty-four of this article, home mortgage bridge loan assistance shall
4 be made available to a mortgagor only when all of the following condi-
5 tions are met:
6 (a) the mortgagor is a permanent resident of this state;
7 (b) the property securing the mortgage is (i) located in this state;
8 (ii) a one-to-four-family owner-occupied residence or a single-family
9 residence in a condominium, housing cooperative or manufactured home;
10 and (iii) the primary residence of the mortgagor;
11 (c) a mortgagee has announced to the mortgagor its intention to fore-
12 close upon the mortgage, or payment on the mortgage has been contractu-
13 ally delinquent for sixty or more days;
14 (d) the mortgagee is not prohibited by law from foreclosing upon the
15 mortgage;
16 (e) the mortgagor is faced with financial hardship beyond his or her
17 control which either (i) prevents his or her correcting the delinquency
18 within a reasonable period of time and bringing the mortgage current; or
19 (ii) as determined by the commissioner after reviewing the mortgagor's
20 financial condition pursuant to subparagraph (ii) of paragraph (f) of
21 this subdivision, may cause the mortgagor to become at least sixty days
22 delinquent on his or her mortgage absent the liquidation of any part of
23 the mortgagor's assets;
24 (f) the mortgagor has applied to the division for home mortgage bridge
25 loan assistance upon an application form developed by the commissioner,
26 which form shall include:
27 (i) a financial statement disclosing all assets and liabilities of the
28 mortgagor whether singly or jointly held, and all household income irre-
29 spective of source;
30 (ii) a statement of financial hardship, supported by such documenta-
31 tion as the commissioner shall prescribe, detailing how either condition
32 stated in subparagraph (i) or (ii) of paragraph (e) of this subdivision
33 is satisfied;
34 (iii) a statement of prior mortgage credit history, supported by such
35 documentation as the commissioner shall prescribe, indicating that the
36 mortgagor either has enjoyed a favorable mortgage credit history over
37 the previous five years, or that any want of such history is itself
38 attributable to financial hardship as can be established by a statement
39 of financial hardship as described in subparagraph (ii) of this para-
40 graph;
41 (iv) a statement of prior education, employment, income and credit
42 history, supported by such documentation as the commissioner shall
43 prescribe, tending to show a reasonable likelihood that the mortgagor
44 will be able to resume full mortgage payments within twenty-four months
45 (or not later than thirty-six months, in periods of high unemployment,
46 as determined from time-to-time by the commissioner) after commencement
47 of home mortgage bridge loan assistance payments pursuant to this arti-
48 cle, and pay the mortgage in full either by its maturity date or by a
49 later date agreed by the mortgagor and the mortgagee; and
50 (v) any other information deemed necessary by the commissioner to
51 determine eligibility for home mortgage bridge loan assistance pursuant
52 to this act; and
53 (g) the commissioner has determined that the criteria established in
54 this subdivision, and any procedural requirements that have been promul-
55 gated, have been satisfied.
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1 2. Waiver of requirements. The commissioner is authorized to waive
2 noncompliance with the criteria in subdivision one of this section to
3 the extent that such waiver is consistent with the state administrative
4 procedure act, is not inconsistent with the purpose of this article and
5 is supported by equitable principles.
6 3. Reapplication. Should the commissioner determine that any of the
7 criteria elaborated in subdivision one of this section are not met, the
8 mortgagor may reapply for home mortgage bridge loan assistance not
9 before six months from the date of such determination, unless there is a
10 material change of circumstances. Nothing in this subdivision shall
11 prohibit a mortgagee from commencing legal action to enforce the mort-
12 gage prior to reapplication by the mortgagor.
13 4. Misrepresentation in application form. An applicant who misrepre-
14 sents any information provided in connection with an application for
15 home mortgage bridge loan assistance may be denied such assistance, or
16 be required immediately to return any such assistance proffered on the
17 basis of such misrepresentation; and the mortgagee may, any time there-
18 after, take any legal action to enforce the mortgage free of any further
19 restriction imposed by this act.
20 § 1256. Temporary payments of assistance. 1. Initial payment of
21 arrearages. Should the commissioner determine a mortgagor to be eligible
22 for home mortgage bridge loan assistance pursuant to section twelve
23 hundred fifty-five of this article, the division shall directly pay any
24 mortgagee secured by the mortgagor's real estate such amounts as are
25 necessary to bring the mortgage current, without regard to any acceler-
26 ation of the debt under the mortgage. In the alternative, the division
27 shall pay to the mortgagee any alternate mortgage payments agreed by the
28 mortgagee and mortgagor. In addition, the division shall pay reasonable
29 costs incurred by the mortgagee prior to the division's grant of home
30 mortgage bridge loan assistance to the mortgagor.
31 2. Mortgage payments subsequent to initial payment of arrearages.
32 After the division has paid any and all arrearages pursuant to subdivi-
33 sion one of this section, the division shall make monthly mortgage
34 assistance payments to the mortgagee on behalf of the mortgagor, and
35 shall collect monthly payments from the mortgagor in amounts determined
36 pursuant to the following formula: the mortgagor's monthly payments to
37 the division to cover the mortgagor's share of total housing expense
38 shall be in an amount that does not exceed forty percent of the
39 mortgagor's net effective income. The mortgagor's payments to the divi-
40 sion shall be made at least seven days prior to the due date of each
41 mortgage payment to the mortgagee, and upon receipt thereof the division
42 shall send the full mortgage payment directly to the mortgagee.
43 3. Mortgage bridge loan assistance payments as loans. (a) The amount
44 by which the sum of any home mortgage bridge loan assistance payments
45 made by the division to mortgagees exceeds the sum of payments made by
46 the mortgagor to the division, plus any amounts paid by the division to
47 the mortgagee under subdivision one of this section, shall constitute a
48 loan extended by the division to the mortgagor. Such loan shall be
49 evidenced by such documents as the commissioner shall determine. It
50 shall also be secured, and subject to repayment with interest, as
51 described in paragraphs (b) and (c) of this subdivision.
52 (b) Repayment of home mortgage bridge loan assistance shall be secured
53 by a mortgage lien on the mortgaged property and by such other obli-
54 gations as the commissioner may require. The priority of any such lien
55 obtained by the division pursuant to this article shall be determined in
56 the same manner as the lien of a general secured creditor of the mortga-
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1 gor. Neither this lien nor any other security interest taken by the
2 division shall be deemed to take priority over any other secured lien or
3 secured interest in effect against the mortgagor's property on the date
4 that home mortgage bridge loan assistance payments commence. The commis-
5 sioner may allow subordination of the home mortgage bridge loan assist-
6 ance lien if necessary to enable the mortgagor to obtain a home improve-
7 ment loan necessary to preserve the value of the property.
8 (c) Upon approval of an application for home mortgage bridge loan
9 assistance, the division shall enter into an agreement with the mortga-
10 gor for repayment of all such assistance provided by the division, with
11 interest, as follows:
12 (i) if forty percent of the mortgagor's net effective income equals an
13 amount that is greater than total housing expense, that amount shall be
14 paid to the division, unless otherwise determined by the commissioner
15 after examination of the mortgagor's financial circumstances and ability
16 to contribute to repayment of the assistance;
17 (ii) if forty percent of the mortgagor's net effective income equals
18 an amount that is less than total housing expense, repayment of home
19 mortgage bridge loan assistance shall be deferred until forty percent of
20 the mortgagor's net effective income equals an amount that is greater
21 than total housing expense;
22 (iii) the commissioner shall establish procedures for periodic review
23 of a mortgagor's total housing expense and net effective income with a
24 view to determining payment amounts that are due to the division pursu-
25 ant to this section;
26 (iv) if repayment of home mortgage bridge loan assistance has not been
27 made by the date that any mortgage has been paid, the mortgagor shall
28 make home mortgage bridge loan assistance repayments in an amount not
29 less than the mortgage payments until the assistance is repaid;
30 (v) interest shall accrue upon all home mortgage bridge loan assist-
31 ance payments made by the division on behalf of the mortgagor at a rate
32 per annum that is equal to the state's cost of funding or at some other
33 rate per annum which takes into consideration other relevant funding
34 costs, as determined by the commissioner. Interest shall accrue from the
35 time the mortgagor commences repayment under this section, and shall
36 accrue only during the period over which the mortgagor is required to
37 make such repayment. When any mortgage for which home mortgage bridge
38 loan assistance payments are made is paid, interest shall then accrue on
39 all such assistance due and owing at the same rate and on the same basis
40 as the mortgage for which the assistance payments were made; and
41 (vi) all moneys received from mortgagors for repayment of home mort-
42 gage bridge loan assistance shall be deposited in the home mortgage
43 bridge loan assistance fund established in section eighty-nine-j of the
44 state finance law.
45 4. Duration of home mortgage bridge loan assistance payments.
46 Payments made pursuant to this article shall be provided for a period
47 not to exceed thirty-six months, consecutively or non-consecutively in
48 an aggregate amount which does not exceed sixty thousand dollars. The
49 commissioner shall establish procedures for periodic review of the
50 mortgagor's financial circumstances for purposes of determining whether
51 continuation, termination or adjustment of home mortgage bridge loan
52 assistance payments is warranted in light of any eligibility require-
53 ments pursuant to this article.
54 5. Delinquency in payments owed to the division. Should a mortgagor
55 fail to pay to the division any amounts owed under this section within
56 fifteen days of the due date, the commissioner shall review the
A. 6045 10
1 mortgagor's financial circumstances in order to determine whether the
2 delinquency is a result of a change in the mortgagor's financial circum-
3 stances. If such a determination is made, the commissioner may modify
4 the mortgagor's required payments. If failure to pay is not determined
5 to be due to a material deterioration in the mortgagor's financial
6 circumstances, the commissioner shall terminate assistance and notify
7 the mortgagee that assistance has been terminated. The mortgagee may
8 thereafter take any legal action necessary to enforce its mortgage with-
9 out further restriction pursuant to this article.
10 6. Delinquency in meeting obligations to mortgagees. Should any mort-
11 gagee scheduled to receive payments from the division pursuant to this
12 article not receive any such payment within thirty days of its scheduled
13 due date, or should the mortgagor fail to observe and perform all terms,
14 covenants, and conditions of the mortgage, the mortgagee may, at any
15 time thereafter, take any legal action to enforce the mortgage without
16 further restriction pursuant to this article.
17 § 2. The state finance law is amended by adding a new section 89-j to
18 read as follows:
19 § 89-j. Home mortgage bridge loan assistance fund. 1. There is hereby
20 established in the custody of the state comptroller a special fund to be
21 known as the "home mortgage bridge loan assistance fund". Monies in such
22 fund shall be kept separate from and not commingled with other funds
23 held in the custody of the state comptroller.
24 2. The home mortgage bridge loan assistance fund shall consist of
25 moneys appropriated thereto, funds transferred from any other fund or
26 source, moneys paid to the division of housing and community renewal by
27 mortgagors for repayment of home mortgage bridge loan assistance
28 payments pursuant to article twenty-eight of the private housing finance
29 law, moneys received as grants and other provisions of funds by finan-
30 cial institutions for the purpose of receiving credit pursuant to the
31 Community Reinvestment Act of 1977, and all revenues received from
32 contributions, donations and all other moneys credited thereto.
33 3. The moneys of the home mortgage bridge loan assistance fund, upon
34 appropriation thereof, shall be expended by the division of housing and
35 community renewal solely for the purposes of article twenty-eight of the
36 private housing finance law.
37 4. The state comptroller, in consultation with the commissioner of
38 housing and community renewal, may establish accounts within the home
39 mortgage bridge loan assistance fund based on the sources of the revenue
40 into such fund or any other purpose which is consistent with the
41 provisions of article twenty-eight of the private housing finance law;
42 provided, however, that the comptroller shall establish a separate
43 account called the "community reinvestment act account" which shall
44 include the moneys deposited into the fund by financial institutions in
45 accordance with the provisions of the Community Reinvestment Act of
46 1977, as amended.
47 § 3. This act shall take effect immediately.
