senate Bill S5035A

Enacts the "home mortgage bridge loan assistance act of 2014"

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Bill Status


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor
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actions

  • 07 / May / 2013
    • REFERRED TO HOUSING, CONSTRUCTION AND COMMUNITY DEVELOPMENT
  • 08 / Jan / 2014
    • REFERRED TO HOUSING, CONSTRUCTION AND COMMUNITY DEVELOPMENT
  • 23 / Jan / 2014
    • AMEND (T) AND RECOMMIT TO HOUSING, CONSTRUCTION AND COMMUNITY DEVELOPMENT
  • 23 / Jan / 2014
    • PRINT NUMBER 5035A

Summary

Enacts the "home mortgage bridge loan assistance act of 2014".

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Bill Details

Versions:
S5035
S5035A
Legislative Cycle:
2013-2014
Current Committee:
Senate Housing, Construction And Community Development
Law Section:
Private Housing Finance Law
Laws Affected:
Add Art 28 §§1250 - 1256, Priv Hous Fin L; add §89-h, St Fin L

Sponsor Memo

BILL NUMBER:S5035A

TITLE OF BILL: An act to amend the private housing finance law, in
relation to enacting the "home mortgage bridge loan assistance act of
2014"; and to amend the state finance law, in relation to establishing
the home mortgage bridge loan assistance fund

PURPOSE OF THE BILL:

Establishes a program to prevent avoidable home mortgage foreclosures
by providing temporary bridge loan assistance in making supplemental
home mortgage loan payments on behalf of homeowners experiencing
temporary financial difficulty, through no fault of their own, that
materially affects their ability to make such payments.

SUMMARY OF PROVISIONS OF BILL:

Section 1 of the bill amends the private housing finance law to add a
new article 28, which establishes the Home Mortgage Bridge Loan
Assistance Act of 2014 by amending the private housing finance law to
add a new Article 28.

Bridge loans under this Act would be available for the payment of
mortgages on one to four-family residences and for single-family
residences in condominiums, housing cooperatives or manufactured homes
located in New York. The mortgaged property would also have to be the
mortgagor's principal residence; the mortgagor could not own other
residential property subject to a mortgage lien. The mortgagor must be
suffering temporary financial hardship due to unemployment,
underemployment, or other circumstances beyond his or her control.
Furthermore, the mortgagor must not have been more than sixty days
delinquent on any residential mortgage within five years preceding the
delinquency for which assistance is requested or within five years
prior to filing for unemployment insurance, which is one of triggers
for the bridge loan assistance application process.

Bridge loan assistance will only be available to mortgagors whose
income prior to the triggering financial hardship was less than one
hundred twenty percent of the median family income in the area where
the property is located, and the aggregate amount of bridge loan
assistance provided to any qualified mortgagor will not be greater
than sixty thousand dollars. Additionally, mortgagors who receive
bridge loan assistance will be carefully screened to ensure that they
will be able to resume their own mortgage payments and to pay off
their bridge loans after overcoming the temporary financial hardship.

Section 2 of the bill amends the state finance law to add a new
section 89-h, which establishes the Home Mortgage Bridge Loan
Assistance Fund. This fund consists of initial appropriations but will
eventually be funded primarily by repayments of bridge loan assistance
loans. Additionally, the program will be funded by moneys received as
grants and provisions from financial institutions for purposes of
receiving Community Reinvestment Act credits.

JUSTIFICATION:


In 2008 New York and the nation experienced a devastating collapse in
the real estate market due to the sub-prime mortgage crisis. One
consequence of that collapse was been an extended economic downturn in
which many businesses reduced investments and employment, which
reduced income levels and made it difficult for many homeowners to
keep up with their mortgage payments. Foreclosures further depressed
home prices, which kept the economic recovery sluggish. Depressed
housing prices and continued high unemployment lead to more abandoned
houses and buildings, loss of tax base, and various related social
problems like homelessness and crime.

Whereas the initial wave of foreclosures during the mortgage crisis
were due to sub-prime mortgage defaults, temporary loss of homeowner
income is now the primary cause of foreclosure. Thousands of New
Yorkers have been become temporarily and involuntarily unemployed or
underemployed and have either fallen into or come close to mortgage
delinquency as a result.

While the sluggish aftermath of the most recent economic crisis demand
immediate action to avoid unnecessary foreclosures, to help stabilize
and revitalize our communities, and to reinvigorate mortgage lending,
it is important to note that business cycles are a normal part of the
economy. Therefore, establishing a temporary bridge loan mortgage
payment assistance program will benefit homeowners, mortgage lenders,
and neighborhoods and communities-not only in the current economic
downturn, but also in future conventional downturns.

One of the major benefits of a home mortgage bridge loan assistance
program is that it helps to avoid both unnecessary foreclosures and
other restructuring. related complications by eliminating the need to
negotiate loan modification terms with lenders and loan servicers at
all. More broadly, such a program avoids unnecessary foreclosures
precisely by capitalizing upon the fact that many foreclosures stem
not from unsound mortgage loan structures or the fundamental
non-creditworthiness of borrowers, but simply from temporary income
loss. For the same reason, moreover, a well-structured bridge loan
assistance program can also become substantially self-perpetuating
through borrower repayment of principal and interest on underlying
loans once regular incomes are restored.

Empirical evidence demonstrates that many temporarily troubled
mortgage borrowers prove able to retain their homes and pay off their
mortgages in full, without a loan agreement modification, when offered
bridge loan assistance. Pennsylvania's Homeowners' Emergency Mortgage
Assistance Program (HEMAP) has proved highly successful, over the
course of three decades, in cost-effectively limiting foreclosures and
the economic and social problems that come from high foreclosure
rates. This bill will improve upon the HEMAP model and will extend a
bridge back to stability to thousands of struggling New York
homeowners who are experiencing a temporary loss of income through no
fault of their own.

LEGISLATIVE HISTORY:

New bill.

FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:


It is estimated that the Home Mortgage Bridge Loan Assistance Program
will require startup funding of up to approximately $130 million,
depending upon how many mortgagors qualify, when the respective loans
are originated, and what the respective loan terms are. Thereafter,
the Program will be funded with (1) all moneys paid by mortgagors in
repayment of home mortgage bridge loan assistance payments made on
their behalves; (2) state appropriations, in an amount to be
determined and to the extent the Program has not become fully
self-funding; (3) any grant or other provision of funds by a financial
institution for the purpose of receiving Community Reinvestment Act
credit; (4) any contributions made by business firms or other entities
to the Program in return for tax credits, to the extent such tax
credits are available; and (5) any contributions made by any other
person or entity to provide funding for the Program.

EFFECTIVE DATE:

This act shall take effect immediately.

view bill text
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                 5035--A

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                               May 7, 2013
                               ___________

Introduced  by  Sen. PERALTA -- read twice and ordered printed, and when
  printed to be committed to the Committee on Housing, Construction  and
  Community  Development  --  recommitted  to  the Committee on Housing,
  Construction and Community Development in accordance with Senate  Rule
  6,  sec. 8 -- committee discharged, bill amended, ordered reprinted as
  amended and recommitted to said committee

AN ACT to amend the private housing finance law, in relation to enacting
  the "home mortgage bridge loan assistance act of 2014"; 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:

  Section 1.  The private housing finance law is amended by adding a new
article 28 to read as follows:
                               ARTICLE 28
                        HOME MORTGAGE BRIDGE LOAN
                               ASSISTANCE
SECTION 1250. SHORT TITLE.
        1251. LEGISLATIVE FINDINGS AND PURPOSE.
        1252. DEFINITIONS.
        1253. HOME MORTGAGE BRIDGE LOAN ASSISTANCE.
        1254. NOTICE, TIMING AND STAY OF PROCEEDING REQUIREMENTS.
        1255. ELIGIBILITY.
        1256. TEMPORARY PAYMENTS OF ASSISTANCE.
  S  1250.  SHORT TITLE. THIS ARTICLE SHALL BE KNOWN AND MAY BE CITED AS
THE "HOME MORTGAGE BRIDGE LOAN ASSISTANCE ACT OF 2014".
  S 1251. LEGISLATIVE FINDINGS AND PURPOSE. (1) FINDINGS.  THE  LEGISLA-
TURE HEREBY FINDS AND DECLARES THAT:
  (A)  THIS STATE AND THE UNITED STATES HAVE EXPERIENCED THE COLLAPSE OF
A SIZEABLE PRIMARY AND SECONDARY REAL ESTATE  MARKET  BUBBLE  WHICH  FEW
FORESAW AND MANY NOW SUFFER THE WEALTH DESTRUCTIVE EFFECTS OF;

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD10624-03-4

S. 5035--A                          2

  (B)  THIS STATE AND THE UNITED STATES ARE IN CONSEQUENCE NOW SUFFERING
AN ECONOMIC SLOWDOWN AS CONSUMERS TRIM  SPENDING  AND  CONCENTRATE  UPON
PAYING  DOWN DEBT, WHILE FINANCIAL INSTITUTIONS AND OTHER BUSINESS FIRMS
TRIM INVESTMENT EXPENDITURES PENDING A RETURN OF CONSUMER SPENDING;
  (C)  THE ECONOMIC SLOWDOWN AFFLICTING THIS STATE AND THE UNITED STATES
HAS DRIVEN LARGE NUMBERS OF RESIDENTS INTO TEMPORARY  INVOLUNTARY  UNEM-
PLOYMENT  OR  UNDEREMPLOYMENT,  THEREBY  LOWERING  INCOMES, SPENDING AND
INVESTMENT YET FURTHER, WHILE  RENDERING  DEBT  PAYMENT  CORRESPONDINGLY
MORE DIFFICULT FOR MANY;
  (D) THERE IS IN CONSEQUENCE A DANGER THAT MANY OTHERWISE CREDIT WORTHY
HOMEOWNERS' CAPACITY TO REMAIN CURRENT ON MORTGAGE PAYMENTS WILL DETERI-
ORATE  YET  FURTHER,  RESULTING  IN  WIDESPREAD DEFAULT, MULTIPLE COSTLY
FORECLOSURE PROCEEDINGS, DISTRESS SALES  OF  HOMES,  CONSEQUENT  FURTHER
DISTRESS TO FINANCIAL INSTITUTIONS' BALANCE SHEETS AND SOLVENCY, GROWING
RATES  OF AVOIDABLE HOMELESSNESS, AND SIGNIFICANT DETERIORATION OF ABAN-
DONED HOUSING STOCK AND NEIGHBORHOODS;
  (E) FORECLOSED HOMES, ABANDONED HOUSING STOCK AND CONSEQUENTLY DETERI-
ORATING BUILDINGS AND NEIGHBORHOODS NOT ONLY DETRIMENTALLY AFFECT  THOSE
WHO  NEEDLESSLY  LOSE  THEIR  HOMES  AND THE NEIGHBORHOODS IN WHICH THEY
RESIDE, BUT ALSO DRAIN WEALTH  FROM  OTHERWISE  HEALTHY  LENDING  INSTI-
TUTIONS  AND NON-DISTRESSED HOME MORTGAGE BORROWERS, THEREBY HARMING THE
HEALTH OF THE BROADER ECONOMY YET FURTHER;
  (F) WHILE THE CURRENT ECONOMIC  CRISIS  DEMANDS  IMMEDIATE  ACTION  TO
AVOID UNNECESSARY FORECLOSURES, HELP REVITALIZE AND STABILIZE OUR COMMU-
NITIES  AND  REINVIGORATE  MORTGAGE LENDING, BUSINESS CYCLES ARE PART OF
THE ECONOMIC FABRIC OF THE STATE AND THE NATION AND THEREFORE, A  TEMPO-
RARY  BRIDGE LOAN MORTGAGE PAYMENT ASSISTANCE PROGRAM WOULD BENEFIT HOME
MORTGAGE BORROWERS, LENDERS AND NEIGHBORHOODS NOT ONLY  IN  THE  CURRENT
DOWNTURN, BUT ALSO IN FUTURE CONVENTIONAL ECONOMIC DOWNTURNS;
  (G) EMPIRICAL EVIDENCE REVEALS THAT MANY TEMPORARILY TROUBLED MORTGAGE
BORROWERS  PROVE  ABLE TO RETAIN THEIR HOMES AND PAY OFF THEIR MORTGAGES
WITHOUT MODIFICATION WHEN OFFERED BRIDGE LOAN ASSISTANCE  UNTIL  BROADER
ECONOMIC  CONDITIONS IMPROVE, THEREBY STAVING OFF GROWING DEFAULT, FORE-
CLOSURE, HOMELESSNESS AND NEIGHBORHOOD DETERIORATION RATES, AS  WELL  AS
YET FURTHER WORSENING OF ECONOMIC CONDITIONS;
  (H) TEMPORARY BRIDGE LOAN MORTGAGE ASSISTANCE PROGRAMS HAVE ACCORDING-
LY  PROVED  HIGHLY  SUCCESSFUL  IN COST EFFECTIVELY LIMITING FORECLOSURE
RATES AND ATTENDANT ECONOMIC AND SOCIAL ILLS  IN  SEVERAL  STATES,  MOST
NOTABLY IN PENNSYLVANIA, CONNECTICUT, MARYLAND AND NEVADA; AND
  (I)  A  TEMPORARY  BRIDGE  LOAN MORTGAGE PAYMENT ASSISTANCE PROGRAM IS
HIGHLY LIKELY TO REDOUND IN A COST EFFECTIVE MANNER TO  THE  BENEFIT  OF
HOME  MORTGAGE BORROWERS, LENDERS, NEIGHBORHOODS, AND THE BROADER PUBLIC
OF THIS STATE.
  2. PURPOSE. THE LEGISLATURE DECLARES THAT THE PURPOSE OF THIS  ARTICLE
SHALL BE TO ESTABLISH A PROGRAM TO AFFORD BRIDGE LOAN ASSISTANCE TO HOME
MORTGAGE  DEBTORS  FACING TEMPORARY DIFFICULTIES IN REMAINING CURRENT ON
MORTGAGE LOAN PAYMENTS THROUGH NO FAULT OF THEIR OWN SO AS TO AVOID MANY
AVOIDABLE PUBLIC AND PRIVATE ILLS.
  S 1252.  DEFINITIONS.  AS USED IN THIS ARTICLE,  THE  FOLLOWING  TERMS
SHALL HAVE THE FOLLOWING MEANINGS:
  1.  "COMMISSIONER"  MEANS  THE  COMMISSIONER  OF HOUSING AND COMMUNITY
RENEWAL.
  2. "DIVISION" MEANS THE DIVISION OF HOUSING AND COMMUNITY RENEWAL.
  3.  "EVENT"  MEANS  A  QUALIFYING  FINANCIAL   HARDSHIP   BEYOND   THE
MORTGAGOR'S  CONTROL AS DEFINED IN PARAGRAPH (A) OF SUBDIVISION THREE OF
SECTION TWELVE HUNDRED FIFTY-THREE OF THIS ARTICLE.

S. 5035--A                          3

  4. "GROSS HOUSEHOLD INCOME" MEANS THE SUM OF THE INCOMES OF THE APPLI-
CANT, HIS OR HER SPOUSE AND CHILDREN RESIDING IN THE SAME  HOUSEHOLD  AS
THE  APPLICANT,  AS  WELL  AS  THE INCOMES OF ANY OTHER RESIDENTS OF THE
HOUSEHOLD DECLARED  BY  THE  APPLICANT  TO  BE  DEPENDENTS  FOR  FEDERAL
PERSONAL  INCOME  TAXATION PURPOSES. INCLUDED IN SUCH TERM ARE ALL FORMS
OF MONETARY ASSISTANCE RECEIVED  BY  SUCH  MEMBERS  OF  THE  APPLICANT'S
HOUSEHOLD.
  5.  "NET EFFECTIVE INCOME" MEANS AN APPLICANT'S GROSS HOUSEHOLD INCOME
LESS LOCAL, STATE AND FEDERAL INCOME AND SOCIAL SECURITY TAXES.
  6. "TOTAL HOUSING EXPENSES" MEANS THE SUM OF THE  MORTGAGOR'S  MONTHLY
MORTGAGE  PAYMENTS,  INCLUDING  ESCROWS,  UTILITY COSTS, PROPERTY HAZARD
INSURANCE PREMIUMS, REAL PROPERTY TAXES AND HOMEOWNER'S FEES IMPOSED FOR
THE MAINTENANCE OF ANY COMMON AREAS.
  S 1253. HOME MORTGAGE BRIDGE LOAN ASSISTANCE. 1.  AUTHORITY.  (A)  THE
COMMISSIONER  SHALL  ESTABLISH, WITHIN THE DIVISION, A PROGRAM TO AFFORD
TEMPORARY SUPPLEMENTAL MORTGAGE PAYMENTS OF  APPROVED  MORTGAGORS.  SUCH
PROGRAM  SHALL  BE  CALLED  THE  "HOME  MORTGAGE  BRIDGE LOAN ASSISTANCE
PROGRAM". THE ASSISTANCE PROVIDED PURSUANT TO THIS ACT SHALL  BE  CALLED
"HOME MORTGAGE BRIDGE LOAN ASSISTANCE".
  (B) THE COMMISSIONER SHALL PROMULGATE SUCH RULES AND FORMS AS SHALL BE
NECESSARY TO IMPLEMENT THE PROVISIONS OF THIS ARTICLE, AND SHALL PUBLISH
AND ENFORCE SUCH RULES.
  (C)  THE  AGGREGATE  AMOUNT  OF  HOME  MORTGAGE BRIDGE LOAN ASSISTANCE
PROVIDED TO ANY MORTGAGOR SHALL NOT EXCEED SIXTY  THOUSAND  DOLLARS,  OR
EXTEND  BEYOND TWENTY-FOUR OR THIRTY-SIX MONTHS, AND SHALL ULTIMATELY BE
RECOVERED FROM BENEFICIARIES AFTER THEIR EMPLOYMENT RESUMES, AS PROVIDED
PURSUANT TO THIS ARTICLE.
  (D) THE DIVISION IS AUTHORIZED TO PROVIDE HOME  MORTGAGE  BRIDGE  LOAN
ASSISTANCE PURSUANT TO THIS ARTICLE ONLY AT SUCH TIME AS FUNDS HAVE BEEN
APPROPRIATED OR MADE AVAILABLE FOR THE HOME MORTGAGE BRIDGE LOAN ASSIST-
ANCE PROGRAM.
  2.  ELIGIBLE  MORTGAGES.  EXCEPT  AS OTHERWISE PROVIDED IN SUBDIVISION
FOUR OF SECTION TWELVE HUNDRED FIFTY-FOUR OF THIS ARTICLE  THE  DIVISION
SHALL  MAKE  HOME  MORTGAGE  BRIDGE  LOAN  ASSISTANCE  AVAILABLE FOR THE
PAYMENT OF MORTGAGES ONLY ON ONE, TWO, THREE AND FOUR FAMILY  RESIDENCES
AND  FOR  SINGLE FAMILY RESIDENCES IN CONDOMINIUMS, HOUSING COOPERATIVES
OR MANUFACTURED HOMES IN CONNECTION WITH WHICH:
  (A) THE MORTGAGED PROPERTY IS THE MORTGAGOR'S PRINCIPAL PLACE OF RESI-
DENCE;
  (B) THE MORTGAGED PROPERTY IS LOCATED IN THIS STATE;
  (C) THE MORTGAGOR, PRIOR TO THE OCCURRENCE OF AN  EVENT  HAD  A  TOTAL
PRE-EVENT  INCOME  THAT  WAS LESS THAN ONE HUNDRED TWENTY PERCENT OF THE
MEDIAN FAMILY INCOME FOR THE METROPOLITAN STATISTICAL AREA OR  STATEWIDE
NONMETROPOLITAN  AREA  WHERE  THE  PROPERTY IS LOCATED, AS MOST RECENTLY
DETERMINED AND PUBLISHED BY THE DEPARTMENT OF HOUSING AND URBAN DEVELOP-
MENT;
  (D) THE MORTGAGOR DOES NOT OWN  OTHER  RESIDENTIAL  PROPERTY  THAT  IS
SUBJECT TO A MORTGAGE LIEN;
  (E)  THE MORTGAGEE HAS GIVEN THE MORTGAGOR NOTICE, PURSUANT TO SECTION
TWELVE HUNDRED FIFTY-FOUR OF THIS ARTICLE, THAT IT INTENDS TO  FORECLOSE
ON THE MORTGAGE;
  (F)  THE MORTGAGOR HAS APPLIED TO THE DIVISION FOR ASSISTANCE PURSUANT
TO SECTION TWELVE HUNDRED FIFTY-FIVE OF THIS ARTICLE;
  (G) AT LEAST TWO FULL MONTHLY INSTALLMENTS DUE  UPON  THE  MORTGAGOR'S
MORTGAGE  REMAIN  UNPAID  AFTER APPLICATION OF ANY PARTIAL PAYMENTS THAT

S. 5035--A                          4

MIGHT HAVE BEEN ACCEPTED BY THE MORTGAGEE BUT NOT  YET  APPLIED  TO  THE
MORTGAGOR'S ACCOUNT;
  (H)  THE  MORTGAGOR IS SUFFERING TEMPORARY FINANCIAL HARDSHIP OWING TO
CIRCUMSTANCES BEYOND HIS OR HER CONTROL, AS DEFINED IN SUBDIVISION THREE
OF THIS SECTION, WHICH RENDERS THE MORTGAGOR UNABLE TO BRING HIS OR  HER
ACCOUNT  CURRENT  WITHIN THE SIXTY DAY PERIOD COMMENCING WITH RECEIPT OF
THE MORTGAGEE'S NOTICE OF INTENTION TO FORECLOSE;
  (I) THE MORTGAGOR HAS NOT BEEN MORE THAN SIXTY DAYS  DELINQUENT  ON  A
RESIDENTIAL  MORTGAGE WITHIN THE FIVE-YEAR INTERVAL PRECEDING THE DELIN-
QUENCY OR THE FILING FOR UNEMPLOYMENT INSURANCE UNDER  SUBDIVISION  FOUR
OF  SECTION TWELVE HUNDRED FIFTY-FOUR OF THIS ARTICLE IN CONNECTION WITH
WHICH ASSISTANCE IS REQUESTED OF  THE  DIVISION,  UNLESS  THE  MORTGAGOR
DEMONSTRATES THAT THE PRIOR DELINQUENCY ALSO RESULTED FROM AN EVENT; AND
  (J)  THERE  IS A REASONABLE LIKELIHOOD THAT THE MORTGAGOR WILL BE ABLE
TO RESUME FULL MORTGAGE PAYMENTS NOT LATER THAN TWENTY-FOUR  MONTHS  (OR
NOT  LATER  THAN  THIRTY-SIX MONTHS, IN PERIODS OF HIGH UNEMPLOYMENT, AS
DETERMINED FROM TIME-TO-TIME BY THE COMMISSIONER) AFTER THE COMMENCEMENT
OF HOME MORTGAGE BRIDGE LOAN ASSISTANCE PAYMENTS BY THE DIVISION TO  THE
MORTGAGEE,  AND  THAT THE MORTGAGOR WILL PAY THE MORTGAGE IN FULL EITHER
BY ITS MATURITY DATE OR BY A LATER DATE AGREED TO WITH THE MORTGAGEE.
  3. TEMPORARY FINANCIAL  HARDSHIP  BEYOND  CONTROL  OF  MORTGAGOR.  THE
COMMISSIONER  SHALL  DETERMINE  WHETHER  THAT  FINANCIAL  HARDSHIP WHICH
IMPEDES TIMELY MORTGAGE PAYMENT MAY BE TEMPORARY AND BEYOND THE  CONTROL
OF THE MORTGAGOR BY REFERENCE TO VERIFIED IMPEDIMENTS.
  (A)  QUALIFYING  FINANCIAL  HARDSHIP  BEYOND  THE MORTGAGOR'S CONTROL.
CIRCUMSTANCES BEYOND THE MORTGAGOR'S CONTROL, NOT INCLUDING  TERMINATION
FROM  PAID EMPLOYMENT, WHICH RESULT IN FINANCIAL HARDSHIP TO THE MORTGA-
GOR INCLUDE:
  (I) INVOLUNTARY LOSS OF EMPLOYMENT BY THE MORTGAGOR;
  (II) INVOLUNTARY REDUCTION OF SALARY, WAGE OR OTHER  EARNINGS  ON  THE
PART OF THE MORTGAGOR; OR
  (III)  ANY  OTHER  FINANCIAL  HARDSHIP  DETERMINED BY REGULATION TO BE
BEYOND THE MORTGAGOR'S CONTROL.
  (B) DETERMINATION AS TO WHETHER FINANCIAL HARDSHIP MAY  BE  TEMPORARY.
FACTORS THAT THE COMMISSIONER SHALL CONSIDER WHEN EVALUATING WHETHER THE
MORTGAGOR  HAS  A REASONABLE PROSPECT OF RESUMING FULL MORTGAGE PAYMENTS
WITHIN TWENTY-FOUR OR THIRTY-SIX MONTHS, FROM THE COMMENCEMENT  OF  HOME
MORTGAGE  BRIDGE  LOAN ASSISTANCE PAYMENTS, AND OF BEING ABLE TO PAY THE
MORTGAGE IN FULL BY MATURITY OR BY A LATER DATE AGREED TO BY THE MORTGA-
GEE INCLUDE:
  (I)  PRIOR  WORK  HISTORY,  EXPERIENCE,  TRAINING,  OPPORTUNITIES  FOR
RETRAINING AND SIMILAR FACTORS WHICH MAY AFFECT FUTURE EMPLOYMENT OPPOR-
TUNITIES;
  (II)  DEBT  REDUCTION OR OTHER INCOME CHANGES SUFFICIENT TO ENABLE THE
MORTGAGOR TO RESUME FULL MORTGAGE PAYMENTS;
  (III) NONCASH BENEFITS THAT MAY REDUCE  HOUSEHOLD  EXPENSES,  SUCH  AS
FOOD  STAMPS  OR  FREE MEDICAL SERVICES FOR MILITARY OR LOW-INCOME FAMI-
LIES;
  (IV) CHANGES IN INCOME OR RECURRING EXPENSES THAT MAY BE  AFFECTED  BY
CHANGES  IN  THE AGE, COMPOSITION OR EMPLOYMENT OF MEMBERS OF THE HOUSE-
HOLD;
  (V) POTENTIAL FOR REPAYMENT OF SHORT-TERM OR INSTALLMENT DEBT;
  (VI) DELINQUENCIES IN OTHER DEBTS WHICH SERIOUSLY JEOPARDIZE CONTINUED
OWNERSHIP OF THE HOME, WHICH CANNOT BE CURED BY  A  MORTGAGE  ASSISTANCE
LOAN;
  (VII) A FAVORABLE WORK AND CREDIT HISTORY;

S. 5035--A                          5

  (VIII) A HISTORY OF TIMELY MORTGAGE PAYMENTS WHEN EMPLOYED;
  (IX) LACK OF AN IMPEDIMENT OR DISABILITY THAT PREVENTS REEMPLOYMENT;
  (X) EVIDENCE THAT THE MORTGAGOR IS ACTIVELY SEEKING WORK; AND
  (XI)  ANY  OTHER  CONSIDERATION  DETERMINED  BY THE COMMISSIONER TO BE
RELEVANT TO EVALUATING WHETHER THE  MORTGAGOR'S  FINANCIAL  HARDSHIP  IS
TEMPORARY.
  S  1254.  NOTICE,  TIMING  AND  STAY  OF PROCEEDING REQUIREMENTS.   1.
REQUIREMENTS.  NO MORTGAGEE OR AGENT THEREOF, OR ANY MORTGAGE  SERVICER,
MAY  ACCELERATE  ANY ELIGIBLE MORTGAGE OBLIGATION AS DEFINED IN SUBDIVI-
SION TWO OF SECTION TWELVE  HUNDRED  FIFTY-THREE  OF  THIS  ARTICLE,  OR
COMMENCE ANY LEGAL ACTION, INCLUDING MORTGAGE FORECLOSURE, TO RECOVER ON
SUCH OBLIGATION, OR TAKE POSSESSION OF ANY SECURITY OF THE MORTGAGOR FOR
SUCH  MORTGAGE  OBLIGATION,  UNTIL:  (I)  THE  MORTGAGOR  IS NOTIFIED AS
PRESCRIBED IN SUBDIVISION TWO OF THIS SECTION, PURSUANT TO SUCH FORM AND
IN SUCH MANNER AS THE COMMISSIONER SHALL PRESCRIBE BY RULE; AND (II) THE
COMMISSIONER HAS MADE A DETERMINATION NOT TO EXTEND HOME MORTGAGE BRIDGE
LOAN ASSISTANCE, OR UNTIL THE  APPLICABLE  TIME  PERIODS  PRESCRIBED  IN
SUBDIVISIONS  TWO  AND  THREE OF THIS SECTION HAVE EXPIRED, WHICHEVER IS
EARLIER.
  2. TIMING AND NOTICE REQUIREMENTS.  (A) TIMING. NO MORTGAGEE OR  AGENT
THEREOF,  OR ANY MORTGAGE SERVICER, MAY ACCELERATE ANY ELIGIBLE MORTGAGE
OBLIGATION AS DEFINED IN  SUBDIVISION  TWO  OF  SECTION  TWELVE  HUNDRED
FIFTY-THREE  OF  THIS  ARTICLE,  OR COMMENCE ANY LEGAL ACTION, INCLUDING
MORTGAGE FORECLOSURE, TO RECOVER ON SUCH OBLIGATION, OR TAKE  POSSESSION
OF ANY SECURITY OF THE MORTGAGOR FOR SUCH MORTGAGE OBLIGATION, UNTIL THE
MORTGAGOR  IS AT LEAST SIXTY DAYS CONTRACTUALLY DELINQUENT IN MAKING HIS
OR HER MORTGAGE PAYMENTS, OR IN  VIOLATION  OF  SOME  OTHER  CONTRACTUAL
PROVISION OF SUCH MORTGAGE.
  (B)  NOTICE. ANY MORTGAGEE OR AGENT THEREOF, OR ANY MORTGAGE SERVICER,
BEFORE ACCELERATING ANY  ELIGIBLE  MORTGAGE  OBLIGATION  AS  DEFINED  IN
SUBDIVISION  TWO  OF SECTION TWELVE HUNDRED FIFTY-THREE OF THIS ARTICLE,
OR COMMENCING ANY  LEGAL  ACTION,  INCLUDING  MORTGAGE  FORECLOSURE,  TO
RECOVER  ON SUCH OBLIGATION, OR TAKING POSSESSION OF ANY SECURITY OF THE
MORTGAGOR FOR SUCH MORTGAGE OBLIGATION, SHALL, IN ADDITION TO  COMPLYING
WITH  THE REQUIREMENTS PRESCRIBED IN SUBDIVISION ONE OF THIS SECTION AND
PARAGRAPH (A) OF THIS SUBDIVISION,  COMPLY  WITH  THE  FOLLOWING  NOTICE
REQUIREMENTS:
  (I)  NOTICE  SHALL BE GIVEN BY A UNIFORM NOTICE FORM, APPLICATION FORM
AND BY ANY OTHER DOCUMENTATION  CONCERNING  HOME  MORTGAGE  BRIDGE  LOAN
ASSISTANCE, TO BE PREPARED BY THE COMMISSIONER;
  (II)  THE NOTICE, WHICH MAY BE PROVIDED BY (A) FIRST CLASS MAIL OR (B)
IN ANY OTHER MANNER AGREED TO BY THE MORTGAGOR IN WRITING, SHALL  ADVISE
THE MORTGAGOR OF HIS OR HER DELINQUENCY OR OTHER DEFAULT UNDER THE MORT-
GAGE;
  (III)  THE NOTICE SHALL ADVISE THE MORTGAGOR THAT HE OR SHE HAS THIRTY
CALENDAR DAYS FROM THE DATE OF THE NOTICE TO MEET  FACE-TO-FACE  WITH  A
DESIGNATED  CONSUMER  CREDIT COUNSELING AGENCY DESIGNATED BY THE COMMIS-
SIONER, WITH A VIEW TO RESOLVING THE DELINQUENCY OR DEFAULT BY  RESTRUC-
TURING THE LOAN PAYMENT SCHEDULE OR IN SOME OTHER MANNER THROUGH NEGOTI-
ATIONS  WITH  THE  MORTGAGEE OR ITS SERVICER OR OTHER AGENT WHO HAS SENT
THE NOTICE; AND
  (IV) THE NOTICE SHALL ADVISE THE MORTGAGOR THAT, SHOULD HE OR  SHE  BE
UNABLE TO RESOLVE THE DELINQUENCY OR DEFAULT WITHIN THIRTY CALENDAR DAYS
OF  THE FIRST CONTACT MADE WITH THE CONSUMER COUNSELING AGENCY, AND WISH
TO BE CONSIDERED FOR HOME MORTGAGE BRIDGE LOAN  ASSISTANCE  PURSUANT  TO
THIS ARTICLE, HE OR SHE MUST APPLY FOR SUCH ASSISTANCE NO LATER THAN TEN

S. 5035--A                          6

CALENDAR DAYS FROM THE END OF SAID THIRTY DAY PERIOD, TO THE DIVISION AT
EITHER  AN  ADDRESS,  INCLUDING AN EMAIL ADDRESS, OR A TELEPHONE NUMBER,
BOTH TO BE PROVIDED IN THE NOTICE ITSELF, TO BE CONSIDERED.
  3.  MORTGAGOR'S  RECEIPT  OF DEFAULT NOTICE.   (A) THE CONSUMER CREDIT
COUNSELING AGENCY SHALL PROMPTLY NOTIFY ANY AND ALL  MORTGAGEES  SECURED
BY THE MORTGAGOR'S REAL PROPERTY OF THE DATE THAT FIRST CONTACT WAS MADE
WITH  THE CONSUMER COUNSELING AGENCY BY THE MORTGAGOR AND THAT THE MORT-
GAGOR IS ACTING PURSUANT TO THE PROCEDURES STIPULATED IN THIS SECTION.
  (B) NO MORTGAGEE NOTIFIED PURSUANT TO PARAGRAPH (A) OF  THIS  SUBDIVI-
SION  SHALL  COMMENCE  OR  CONTINUE  ANY  LEGAL  PROCEEDING  AGAINST THE
MORTGAGOR'S REAL PROPERTY FOR AT LEAST TEN CALENDAR DAYS FROM THE END OF
THE THIRTY DAY PERIOD THAT COMMENCES FROM THE FIRST CONTACT THE  MORTGA-
GOR MAKES WITH A CREDIT COUNSELING AGENCY AS STATED IN SUCH NOTICE.
  (C)  SHOULD  THE MORTGAGOR APPLY FOR HOME MORTGAGE BRIDGE LOAN ASSIST-
ANCE PURSUANT TO SUBPARAGRAPH (IV) OF PARAGRAPH (B) OF  SUBDIVISION  TWO
OF  THIS  SECTION, THE COMMISSIONER SHALL MAKE A DETERMINATION OF ELIGI-
BILITY OR NON-ELIGIBILITY WITHIN SIXTY CALENDAR DAYS OF RECEIPT  OF  THE
APPLICATION.    UPON  RECEIPT  OF THE APPLICATION, THE COMMISSIONER ALSO
SHALL PROMPTLY INFORM ANY AND ALL MORTGAGEES SECURED BY THE  MORTGAGOR'S
REAL  PROPERTY  THAT  AN  APPLICATION HAS BEEN RECEIVED PURSUANT TO THIS
ARTICLE, AND SHALL INFORM THE SAME OF BOTH THE DATE OF RECEIPT  AND  THE
PROHIBITION STATED IN PARAGRAPH (D) OF THIS SUBDIVISION.
  (D) DURING THE PERIOD OVER WHICH A MORTGAGOR'S APPLICATION MADE TO THE
DIVISION  PURSUANT  TO  THIS  ARTICLE  IS  PENDING,  NO  MORTGAGEE SHALL
COMMENCE OR CONTINUE ANY FORECLOSURE OR RELATED LEGAL  ACTION  UPON  ITS
MORTGAGE WITH THE MORTGAGOR.
  (E)  IF  (I)  THE  MORTGAGOR  FAILS TO MEET WITH A DESIGNATED CONSUMER
CREDIT COUNSELING AGENCY WITHIN THE DESIGNATED TIME PERIOD PRESCRIBED BY
SUBPARAGRAPH (III) OF PARAGRAPH (B) OF SUBDIVISION TWO OF THIS  SECTION;
(II)  THE MORTGAGOR DOES NOT APPLY FOR HOME MORTGAGE BRIDGE LOAN ASSIST-
ANCE WITHIN THE TIME PERIOD PRESCRIBED BY SUBPARAGRAPH (IV) OF PARAGRAPH
(B) OF SUBDIVISION TWO OF THIS SECTION; OR (III) THE MORTGAGOR'S  APPLI-
CATION  PURSUANT  TO  THIS SUBDIVISION IS DENIED, THEN THE MORTGAGEE MAY
TAKE ANY LEGAL ACTIONS THAT ARE AVAILABLE TO ENFORCE THE MORTGAGE,  FREE
OF THE REQUIREMENTS OF THIS ARTICLE.
  4.  OTHER  ELIGIBLE MORTGAGES.   (A) ANY MORTGAGOR WHO FILES FOR UNEM-
PLOYMENT INSURANCE WITH THE DEPARTMENT OF LABOR SHALL RECEIVE  A  NOTICE
FROM  SUCH  DEPARTMENT  STATING  THAT HE OR SHE MAY BE ELIGIBLE FOR HOME
MORTGAGE BRIDGE LOAN ASSISTANCE PURSUANT TO THIS ARTICLE.
  (B) SUCH NOTICE SHALL BE GIVEN BY A UNIFORM NOTICE PRESCRIBED  BY  THE
COMMISSIONER.
  (C)  THE NOTICE SHALL DESCRIBE THE PURPOSE OF THE HOME MORTGAGE BRIDGE
LOAN ASSISTANCE PROGRAM, INCLUDE AN APPLICATION FOR HOME MORTGAGE BRIDGE
LOAN ASSISTANCE AND NOTIFY THE FILER THAT HE OR SHE MAY CONSULT  WITH  A
CONSUMER CREDIT COUNSELING AGENCY WITH A VIEW TO APPLYING FOR HOME MORT-
GAGE BRIDGE LOAN ASSISTANCE.
  (D)  NOTWITHSTANDING  THE  CONDITIONS  FOR  HOME  MORTGAGE BRIDGE LOAN
ASSISTANCE ELIGIBILITY PRESCRIBED BY THIS ARTICLE, A  MORTGAGOR  WHO  IS
NOT  CONTRACTUALLY  IN  DEFAULT  ON  HIS OR HER MORTGAGE LOAN AND WHO IS
FACED WITH AN EVENT, MAY APPLY FOR HOME MORTGAGE BRIDGE LOAN  ASSISTANCE
ON  A FORM PRESCRIBED BY THE COMMISSIONER WHICH INCLUDES THE INFORMATION
PRESCRIBED IN SUBDIVISION ONE OF SECTION TWELVE HUNDRED  FIFTY-FIVE  AND
SECTION TWELVE HUNDRED FIFTY-SIX OF THIS ARTICLE.
  (E)  THE  DIVISION  SHALL  MAKE  A DETERMINATION OF ELIGIBILITY WITHIN
SIXTY CALENDAR DAYS OF RECEIPT OF THE APPLICATION.

S. 5035--A                          7

  (F) SHOULD THE MORTGAGOR'S APPLICATION FOR HOME MORTGAGE  BRIDGE  LOAN
ASSISTANCE  BE DENIED, THE MORTGAGOR MAY REAPPLY PURSUANT TO THIS SUBDI-
VISION FOR SUCH ASSISTANCE NOT LESS THAN SIX MONTHS  FROM  THE  DATE  OF
SUCH DETERMINATION, UNLESS THERE IS A MATERIAL CHANGE OF CIRCUMSTANCES.
  S  1255. ELIGIBILITY.  1. ELIGIBLE MORTGAGORS. WITH THE PARTIAL EXCEP-
TION OF CASES COVERED BY SUBDIVISION  FOUR  OF  SECTION  TWELVE  HUNDRED
FIFTY-FOUR  OF  THIS ARTICLE, HOME MORTGAGE BRIDGE LOAN ASSISTANCE SHALL
BE MADE AVAILABLE TO A MORTGAGOR ONLY WHEN ALL OF THE  FOLLOWING  CONDI-
TIONS ARE MET:
  (A) THE MORTGAGOR IS A PERMANENT RESIDENT OF THIS STATE;
  (B)  THE  PROPERTY SECURING THE MORTGAGE IS (I) LOCATED IN THIS STATE;
(II) A ONE-TO-FOUR-FAMILY OWNER-OCCUPIED RESIDENCE  OR  A  SINGLE-FAMILY
RESIDENCE  IN  A  CONDOMINIUM, HOUSING COOPERATIVE OR MANUFACTURED HOME;
AND (III) THE PRIMARY RESIDENCE OF THE MORTGAGOR;
  (C) A MORTGAGEE HAS ANNOUNCED TO THE MORTGAGOR ITS INTENTION TO  FORE-
CLOSE  UPON THE MORTGAGE, OR PAYMENT ON THE MORTGAGE HAS BEEN CONTRACTU-
ALLY DELINQUENT FOR SIXTY OR MORE DAYS;
  (D) THE MORTGAGEE IS NOT PROHIBITED BY LAW FROM FORECLOSING  UPON  THE
MORTGAGE;
  (E)  THE  MORTGAGOR IS FACED WITH FINANCIAL HARDSHIP BEYOND HIS OR HER
CONTROL WHICH EITHER (I) PREVENTS HIS OR HER CORRECTING THE  DELINQUENCY
WITHIN A REASONABLE PERIOD OF TIME AND BRINGING THE MORTGAGE CURRENT; OR
(II)  AS  DETERMINED BY THE COMMISSIONER AFTER REVIEWING THE MORTGAGOR'S
FINANCIAL CONDITION PURSUANT TO SUBPARAGRAPH (II) OF  PARAGRAPH  (F)  OF
THIS  SUBDIVISION, MAY CAUSE THE MORTGAGOR TO BECOME AT LEAST SIXTY DAYS
DELINQUENT ON HIS OR HER MORTGAGE ABSENT THE LIQUIDATION OF ANY PART  OF
THE MORTGAGOR'S ASSETS;
  (F) THE MORTGAGOR HAS APPLIED TO THE DIVISION FOR HOME MORTGAGE BRIDGE
LOAN  ASSISTANCE UPON AN APPLICATION FORM DEVELOPED BY THE COMMISSIONER,
WHICH FORM SHALL INCLUDE:
  (I) A FINANCIAL STATEMENT DISCLOSING ALL ASSETS AND LIABILITIES OF THE
MORTGAGOR WHETHER SINGLY OR JOINTLY HELD, AND ALL HOUSEHOLD INCOME IRRE-
SPECTIVE OF SOURCE;
  (II) A STATEMENT OF FINANCIAL HARDSHIP, SUPPORTED BY  SUCH  DOCUMENTA-
TION AS THE COMMISSIONER SHALL PRESCRIBE, DETAILING HOW EITHER CONDITION
STATED  IN SUBPARAGRAPH (I) OR (II) OF PARAGRAPH (E) OF THIS SUBDIVISION
IS SATISFIED;
  (III) A STATEMENT OF PRIOR MORTGAGE CREDIT HISTORY, SUPPORTED BY  SUCH
DOCUMENTATION  AS  THE COMMISSIONER SHALL PRESCRIBE, INDICATING THAT THE
MORTGAGOR EITHER HAS ENJOYED A FAVORABLE MORTGAGE  CREDIT  HISTORY  OVER
THE  PREVIOUS  FIVE  YEARS,  OR  THAT ANY WANT OF SUCH HISTORY IS ITSELF
ATTRIBUTABLE TO FINANCIAL HARDSHIP AS CAN BE ESTABLISHED BY A  STATEMENT
OF  FINANCIAL  HARDSHIP  AS DESCRIBED IN SUBPARAGRAPH (II) OF THIS PARA-
GRAPH;
  (IV) A STATEMENT OF PRIOR EDUCATION,  EMPLOYMENT,  INCOME  AND  CREDIT
HISTORY,  SUPPORTED  BY  SUCH  DOCUMENTATION  AS  THE COMMISSIONER SHALL
PRESCRIBE, TENDING TO SHOW A REASONABLE LIKELIHOOD  THAT  THE  MORTGAGOR
WILL  BE ABLE TO RESUME FULL MORTGAGE PAYMENTS WITHIN TWENTY-FOUR MONTHS
(OR NOT LATER THAN THIRTY-SIX MONTHS, IN PERIODS OF  HIGH  UNEMPLOYMENT,
AS  DETERMINED FROM TIME-TO-TIME BY THE COMMISSIONER) AFTER COMMENCEMENT
OF HOME MORTGAGE BRIDGE LOAN ASSISTANCE PAYMENTS PURSUANT TO THIS  ARTI-
CLE,  AND  PAY  THE MORTGAGE IN FULL EITHER BY ITS MATURITY DATE OR BY A
LATER DATE AGREED BY THE MORTGAGOR AND THE MORTGAGEE; AND
  (V) ANY OTHER INFORMATION DEEMED  NECESSARY  BY  THE  COMMISSIONER  TO
DETERMINE  ELIGIBILITY FOR HOME MORTGAGE BRIDGE LOAN ASSISTANCE PURSUANT
TO THIS ACT; AND

S. 5035--A                          8

  (G) THE COMMISSIONER HAS DETERMINED THAT THE CRITERIA  ESTABLISHED  IN
THIS SUBDIVISION, AND ANY PROCEDURAL REQUIREMENTS THAT HAVE BEEN PROMUL-
GATED, HAVE BEEN SATISFIED.
  2.  WAIVER  OF  REQUIREMENTS.  THE COMMISSIONER IS AUTHORIZED TO WAIVE
NONCOMPLIANCE WITH THE CRITERIA IN SUBDIVISION ONE OF  THIS  SECTION  TO
THE  EXTENT THAT SUCH WAIVER IS CONSISTENT WITH THE STATE ADMINISTRATIVE
PROCEDURE ACT, IS NOT INCONSISTENT WITH THE PURPOSE OF THIS ARTICLE  AND
IS SUPPORTED BY EQUITABLE PRINCIPLES.
  3.  REAPPLICATION.  SHOULD  THE COMMISSIONER DETERMINE THAT ANY OF THE
CRITERIA ELABORATED IN SUBDIVISION ONE OF THIS SECTION ARE NOT MET,  THE
MORTGAGOR  MAY  REAPPLY  FOR  HOME  MORTGAGE  BRIDGE LOAN ASSISTANCE NOT
BEFORE SIX MONTHS FROM THE DATE OF SUCH DETERMINATION, UNLESS THERE IS A
MATERIAL CHANGE OF CIRCUMSTANCES.  NOTHING  IN  THIS  SUBDIVISION  SHALL
PROHIBIT  A  MORTGAGEE FROM COMMENCING LEGAL ACTION TO ENFORCE THE MORT-
GAGE PRIOR TO REAPPLICATION BY THE MORTGAGOR.
  4. MISREPRESENTATION IN APPLICATION FORM. AN APPLICANT  WHO  MISREPRE-
SENTS  ANY  INFORMATION  PROVIDED  IN CONNECTION WITH AN APPLICATION FOR
HOME MORTGAGE BRIDGE LOAN ASSISTANCE MAY BE DENIED SUCH  ASSISTANCE,  OR
BE  REQUIRED  IMMEDIATELY TO RETURN ANY SUCH ASSISTANCE PROFFERED ON THE
BASIS OF SUCH MISREPRESENTATION; AND THE MORTGAGEE MAY, ANY TIME  THERE-
AFTER, TAKE ANY LEGAL ACTION TO ENFORCE THE MORTGAGE FREE OF ANY FURTHER
RESTRICTION IMPOSED BY THIS ACT.
  S  1256.  TEMPORARY  PAYMENTS OF ASSISTANCE.   1.   INITIAL PAYMENT OF
ARREARAGES. SHOULD THE COMMISSIONER DETERMINE A MORTGAGOR TO BE ELIGIBLE
FOR HOME MORTGAGE BRIDGE LOAN  ASSISTANCE  PURSUANT  TO  SECTION  TWELVE
HUNDRED  FIFTY-FIVE OF THIS ARTICLE, THE DIVISION SHALL DIRECTLY PAY ANY
MORTGAGEE SECURED BY THE MORTGAGOR'S REAL ESTATE  SUCH  AMOUNTS  AS  ARE
NECESSARY  TO BRING THE MORTGAGE CURRENT, WITHOUT REGARD TO ANY ACCELER-
ATION OF THE DEBT UNDER THE MORTGAGE. IN THE ALTERNATIVE,  THE  DIVISION
SHALL PAY TO THE MORTGAGEE ANY ALTERNATE MORTGAGE PAYMENTS AGREED BY THE
MORTGAGEE  AND MORTGAGOR. IN ADDITION, THE DIVISION SHALL PAY REASONABLE
COSTS INCURRED BY THE MORTGAGEE PRIOR TO THE DIVISION'S  GRANT  OF  HOME
MORTGAGE BRIDGE LOAN ASSISTANCE TO THE MORTGAGOR.
  2.  MORTGAGE  PAYMENTS  SUBSEQUENT  TO  INITIAL PAYMENT OF ARREARAGES.
AFTER THE DIVISION HAS PAID ANY AND ALL ARREARAGES PURSUANT TO  SUBDIVI-
SION  ONE  OF  THIS  SECTION,  THE  DIVISION SHALL MAKE MONTHLY MORTGAGE
ASSISTANCE PAYMENTS TO THE MORTGAGEE ON BEHALF  OF  THE  MORTGAGOR,  AND
SHALL  COLLECT MONTHLY PAYMENTS FROM THE MORTGAGOR IN AMOUNTS DETERMINED
PURSUANT TO THE FOLLOWING FORMULA: THE MORTGAGOR'S MONTHLY  PAYMENTS  TO
THE  DIVISION  TO  COVER  THE MORTGAGOR'S SHARE OF TOTAL HOUSING EXPENSE
SHALL BE IN AN  AMOUNT  THAT  DOES  NOT  EXCEED  FORTY  PERCENT  OF  THE
MORTGAGOR'S NET EFFECTIVE INCOME.  THE MORTGAGOR'S PAYMENTS TO THE DIVI-
SION  SHALL  BE  MADE  AT LEAST SEVEN DAYS PRIOR TO THE DUE DATE OF EACH
MORTGAGE PAYMENT TO THE MORTGAGEE, AND UPON RECEIPT THEREOF THE DIVISION
SHALL SEND THE FULL MORTGAGE PAYMENT DIRECTLY TO THE MORTGAGEE.
  3. MORTGAGE BRIDGE LOAN ASSISTANCE PAYMENTS AS LOANS.  (A) THE  AMOUNT
BY  WHICH  THE  SUM OF ANY HOME MORTGAGE BRIDGE LOAN ASSISTANCE PAYMENTS
MADE BY THE DIVISION TO MORTGAGEES EXCEEDS THE SUM OF PAYMENTS  MADE  BY
THE  MORTGAGOR TO THE DIVISION, PLUS ANY AMOUNTS PAID BY THE DIVISION TO
THE MORTGAGEE UNDER SUBDIVISION ONE OF THIS SECTION, SHALL CONSTITUTE  A
LOAN  EXTENDED  BY  THE  DIVISION  TO  THE MORTGAGOR. SUCH LOAN SHALL BE
EVIDENCED BY SUCH DOCUMENTS AS  THE  COMMISSIONER  SHALL  DETERMINE.  IT
SHALL  ALSO  BE  SECURED,  AND  SUBJECT  TO  REPAYMENT WITH INTEREST, AS
DESCRIBED IN PARAGRAPHS (B) AND (C) OF THIS SUBDIVISION.
  (B) REPAYMENT OF HOME MORTGAGE BRIDGE LOAN ASSISTANCE SHALL BE SECURED
BY A MORTGAGE LIEN ON THE MORTGAGED PROPERTY AND  BY  SUCH  OTHER  OBLI-

S. 5035--A                          9

GATIONS  AS  THE COMMISSIONER MAY REQUIRE. THE PRIORITY OF ANY SUCH LIEN
OBTAINED BY THE DIVISION PURSUANT TO THIS ARTICLE SHALL BE DETERMINED IN
THE SAME MANNER AS THE LIEN OF A GENERAL SECURED CREDITOR OF THE MORTGA-
GOR.    NEITHER  THIS  LIEN NOR ANY OTHER SECURITY INTEREST TAKEN BY THE
DIVISION SHALL BE DEEMED TO TAKE PRIORITY OVER ANY OTHER SECURED LIEN OR
SECURED INTEREST IN EFFECT AGAINST THE MORTGAGOR'S PROPERTY ON THE  DATE
THAT HOME MORTGAGE BRIDGE LOAN ASSISTANCE PAYMENTS COMMENCE. THE COMMIS-
SIONER  MAY ALLOW SUBORDINATION OF THE HOME MORTGAGE BRIDGE LOAN ASSIST-
ANCE LIEN IF NECESSARY TO ENABLE THE MORTGAGOR TO OBTAIN A HOME IMPROVE-
MENT LOAN NECESSARY TO PRESERVE THE VALUE OF THE PROPERTY.
  (C) UPON APPROVAL OF AN APPLICATION  FOR  HOME  MORTGAGE  BRIDGE  LOAN
ASSISTANCE,  THE DIVISION SHALL ENTER INTO AN AGREEMENT WITH THE MORTGA-
GOR FOR REPAYMENT OF ALL SUCH ASSISTANCE PROVIDED BY THE DIVISION,  WITH
INTEREST, AS FOLLOWS:
  (I) IF FORTY PERCENT OF THE MORTGAGOR'S NET EFFECTIVE INCOME EQUALS AN
AMOUNT  THAT IS GREATER THAN TOTAL HOUSING EXPENSE, THAT AMOUNT SHALL BE
PAID TO THE DIVISION, UNLESS OTHERWISE DETERMINED  BY  THE  COMMISSIONER
AFTER EXAMINATION OF THE MORTGAGOR'S FINANCIAL CIRCUMSTANCES AND ABILITY
TO CONTRIBUTE TO REPAYMENT OF THE ASSISTANCE;
  (II)  IF  FORTY PERCENT OF THE MORTGAGOR'S NET EFFECTIVE INCOME EQUALS
AN AMOUNT THAT IS LESS THAN TOTAL HOUSING  EXPENSE,  REPAYMENT  OF  HOME
MORTGAGE BRIDGE LOAN ASSISTANCE SHALL BE DEFERRED UNTIL FORTY PERCENT OF
THE  MORTGAGOR'S  NET  EFFECTIVE INCOME EQUALS AN AMOUNT THAT IS GREATER
THAN TOTAL HOUSING EXPENSE;
  (III) THE COMMISSIONER SHALL ESTABLISH PROCEDURES FOR PERIODIC  REVIEW
OF  A  MORTGAGOR'S TOTAL HOUSING EXPENSE AND NET EFFECTIVE INCOME WITH A
VIEW TO DETERMINING PAYMENT AMOUNTS THAT ARE DUE TO THE DIVISION  PURSU-
ANT TO THIS SECTION;
  (IV) IF REPAYMENT OF HOME MORTGAGE BRIDGE LOAN ASSISTANCE HAS NOT BEEN
MADE  BY  THE  DATE THAT ANY MORTGAGE HAS BEEN PAID, THE MORTGAGOR SHALL
MAKE HOME MORTGAGE BRIDGE LOAN ASSISTANCE REPAYMENTS IN  AN  AMOUNT  NOT
LESS THAN THE MORTGAGE PAYMENTS UNTIL THE ASSISTANCE IS REPAID;
  (V)  INTEREST  SHALL ACCRUE UPON ALL HOME MORTGAGE BRIDGE LOAN ASSIST-
ANCE PAYMENTS MADE BY THE DIVISION ON BEHALF OF THE MORTGAGOR AT A  RATE
PER  ANNUM THAT IS EQUAL TO THE STATE'S COST OF FUNDING OR AT SOME OTHER
RATE PER ANNUM WHICH TAKES INTO  CONSIDERATION  OTHER  RELEVANT  FUNDING
COSTS, AS DETERMINED BY THE COMMISSIONER. INTEREST SHALL ACCRUE FROM THE
TIME  THE  MORTGAGOR  COMMENCES  REPAYMENT UNDER THIS SECTION, AND SHALL
ACCRUE ONLY DURING THE PERIOD OVER WHICH THE MORTGAGOR  IS  REQUIRED  TO
MAKE  SUCH  REPAYMENT.  WHEN ANY MORTGAGE FOR WHICH HOME MORTGAGE BRIDGE
LOAN ASSISTANCE PAYMENTS ARE MADE IS PAID, INTEREST SHALL THEN ACCRUE ON
ALL SUCH ASSISTANCE DUE AND OWING AT THE SAME RATE AND ON THE SAME BASIS
AS THE MORTGAGE FOR WHICH THE ASSISTANCE PAYMENTS WERE MADE; AND
  (VI) ALL MONEYS RECEIVED FROM MORTGAGORS FOR REPAYMENT OF  HOME  MORT-
GAGE  BRIDGE  LOAN  ASSISTANCE  SHALL  BE DEPOSITED IN THE HOME MORTGAGE
BRIDGE LOAN ASSISTANCE FUND ESTABLISHED IN SECTION EIGHTY-NINE-H OF  THE
STATE FINANCE LAW.
  4.   DURATION  OF  HOME  MORTGAGE  BRIDGE  LOAN  ASSISTANCE  PAYMENTS.
PAYMENTS MADE PURSUANT TO THIS ARTICLE SHALL BE PROVIDED  FOR  A  PERIOD
NOT  TO  EXCEED THIRTY-SIX MONTHS, CONSECUTIVELY OR NON-CONSECUTIVELY IN
AN AGGREGATE AMOUNT WHICH DOES NOT EXCEED SIXTY  THOUSAND  DOLLARS.  THE
COMMISSIONER  SHALL  ESTABLISH  PROCEDURES  FOR  PERIODIC  REVIEW OF THE
MORTGAGOR'S FINANCIAL CIRCUMSTANCES FOR PURPOSES OF DETERMINING  WHETHER
CONTINUATION,  TERMINATION  OR  ADJUSTMENT  OF HOME MORTGAGE BRIDGE LOAN
ASSISTANCE PAYMENTS IS WARRANTED IN LIGHT OF  ANY  ELIGIBILITY  REQUIRE-
MENTS PURSUANT TO THIS ARTICLE.

S. 5035--A                         10

  5.  DELINQUENCY  IN  PAYMENTS OWED TO THE DIVISION. SHOULD A MORTGAGOR
FAIL TO PAY TO THE DIVISION ANY AMOUNTS OWED UNDER THIS  SECTION  WITHIN
FIFTEEN  DAYS  OF  THE  DUE  DATE,  THE  COMMISSIONER  SHALL  REVIEW THE
MORTGAGOR'S FINANCIAL CIRCUMSTANCES IN ORDER TO  DETERMINE  WHETHER  THE
DELINQUENCY IS A RESULT OF A CHANGE IN THE MORTGAGOR'S FINANCIAL CIRCUM-
STANCES.  IF  SUCH  A DETERMINATION IS MADE, THE COMMISSIONER MAY MODIFY
THE MORTGAGOR'S REQUIRED PAYMENTS. IF FAILURE TO PAY IS  NOT  DETERMINED
TO  BE  DUE  TO  A  MATERIAL  DETERIORATION IN THE MORTGAGOR'S FINANCIAL
CIRCUMSTANCES, THE COMMISSIONER SHALL TERMINATE  ASSISTANCE  AND  NOTIFY
THE  MORTGAGEE  THAT  ASSISTANCE  HAS BEEN TERMINATED. THE MORTGAGEE MAY
THEREAFTER TAKE ANY LEGAL ACTION NECESSARY TO ENFORCE ITS MORTGAGE WITH-
OUT FURTHER RESTRICTION PURSUANT TO THIS ARTICLE.
  6. DELINQUENCY IN MEETING OBLIGATIONS TO MORTGAGEES. SHOULD ANY  MORT-
GAGEE  SCHEDULED  TO RECEIVE PAYMENTS FROM THE DIVISION PURSUANT TO THIS
ARTICLE NOT RECEIVE ANY SUCH PAYMENT WITHIN THIRTY DAYS OF ITS SCHEDULED
DUE DATE, OR SHOULD THE MORTGAGOR FAIL TO OBSERVE AND PERFORM ALL TERMS,
COVENANTS, AND CONDITIONS OF THE MORTGAGE, THE  MORTGAGEE  MAY,  AT  ANY
TIME  THEREAFTER,  TAKE ANY LEGAL ACTION TO ENFORCE THE MORTGAGE WITHOUT
FURTHER RESTRICTION PURSUANT TO THIS ARTICLE.
  S 2. The state finance law is amended by adding a new section 89-h  to
read as follows:
  S 89-H. HOME MORTGAGE BRIDGE LOAN ASSISTANCE FUND.  1. THERE IS HEREBY
ESTABLISHED IN THE CUSTODY OF THE STATE COMPTROLLER A SPECIAL FUND TO BE
KNOWN AS THE "HOME MORTGAGE BRIDGE LOAN ASSISTANCE FUND". MONIES IN SUCH
FUND  SHALL  BE  KEPT  SEPARATE FROM AND NOT COMMINGLED WITH OTHER FUNDS
HELD IN THE CUSTODY OF THE STATE COMPTROLLER.
  2. THE HOME MORTGAGE BRIDGE LOAN  ASSISTANCE  FUND  SHALL  CONSIST  OF
MONEYS  APPROPRIATED  THERETO,  FUNDS TRANSFERRED FROM ANY OTHER FUND OR
SOURCE, MONEYS PAID TO THE DIVISION OF HOUSING AND COMMUNITY RENEWAL  BY
MORTGAGORS  FOR  REPAYMENT  OF  HOME  MORTGAGE  BRIDGE  LOAN  ASSISTANCE
PAYMENTS PURSUANT TO ARTICLE TWENTY-EIGHT OF THE PRIVATE HOUSING FINANCE
LAW, MONEYS RECEIVED AS GRANTS AND OTHER PROVISIONS OF FUNDS  BY  FINAN-
CIAL  INSTITUTIONS  FOR  THE PURPOSE OF RECEIVING CREDIT PURSUANT TO THE
COMMUNITY REINVESTMENT ACT OF  1977,  AND  ALL  REVENUES  RECEIVED  FROM
CONTRIBUTIONS, DONATIONS AND ALL OTHER MONEYS CREDITED THERETO.
  3.  THE  MONEYS OF THE HOME MORTGAGE BRIDGE LOAN ASSISTANCE FUND, UPON
APPROPRIATION THEREOF, SHALL BE EXPENDED BY THE DIVISION OF HOUSING  AND
COMMUNITY RENEWAL SOLELY FOR THE PURPOSES OF ARTICLE TWENTY-EIGHT OF THE
PRIVATE HOUSING FINANCE LAW.
  4.  THE  STATE  COMPTROLLER,  IN CONSULTATION WITH THE COMMISSIONER OF
HOUSING AND COMMUNITY RENEWAL, MAY ESTABLISH ACCOUNTS  WITHIN  THE  HOME
MORTGAGE BRIDGE LOAN ASSISTANCE FUND BASED ON THE SOURCES OF THE REVENUE
INTO  SUCH  FUND  OR  ANY  OTHER  PURPOSE  WHICH  IS CONSISTENT WITH THE
PROVISIONS OF ARTICLE TWENTY-EIGHT OF THE PRIVATE HOUSING  FINANCE  LAW;
PROVIDED,  HOWEVER,  THAT  THE  COMPTROLLER  SHALL  ESTABLISH A SEPARATE
ACCOUNT CALLED THE "COMMUNITY  REINVESTMENT  ACT  ACCOUNT"  WHICH  SHALL
INCLUDE  THE MONEYS DEPOSITED INTO THE FUND BY FINANCIAL INSTITUTIONS IN
ACCORDANCE WITH THE PROVISIONS OF  THE  COMMUNITY  REINVESTMENT  ACT  OF
1977, AS AMENDED.
  S 3. This act shall take effect immediately.

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