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S00161 Text:

                STATE OF NEW YORK
                               2023-2024 Regular Sessions
                    IN SENATE
                                     January 4, 2023
        Introduced  by  Sen. HOYLMAN -- read twice and ordered printed, and when
          printed to be committed to the Committee on Judiciary
        AN ACT to amend the general obligations law, in relation to  pre-payment
          penalties  for  mortgages  secured by real property owned in a cooper-
          ative form of ownership

          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
     1    Section 1. Paragraph b of subdivision 3 of section 5-501 of the gener-
     2  al  obligations  law,  as amended by chapter 472 of the laws of 2008, is
     3  amended to read as follows:
     4    b. notwithstanding any other provision of law, the unpaid  balance  of
     5  the  loan  or  forbearance  may  be prepaid, in whole or in part, at any
     6  time. If prepayment is made on or after one year from the date the  loan
     7  or forbearance is made, no penalty may be imposed. If prepayment is made
     8  prior  to such time, no penalty may be imposed unless provision therefor
     9  is expressly made in the loan contract, provided that no penalty may  be
    10  imposed if prohibited by sections six-l and six-m of the banking law. No
    11  prepayment  penalty  or  fee  shall be charged or collected on a loan or
    12  forbearance secured by real property owned  in  a  cooperative  form  of
    13  ownership  where  over  fifty percent of the units are shareholder occu-
    14  pied. Such prepayment penalty shall be unenforceable. In all cases,  the
    15  right  of  prepayment  shall  be stated in the instrument evidencing the
    16  loan or forbearance, provided, however,  that  the  provisions  of  this
    17  subdivision shall not apply to the extent such provisions are inconsist-
    18  ent with any federal law or regulation.
    19    § 2. This act shall take effect immediately.
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
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