S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   5598
 
                        2021-2022 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             February 22, 2021
                                ___________
 
 Introduced  by M. of A. HAWLEY, MORINELLO, ASHBY, SALKA -- read once and
   referred to the Committee on Judiciary
 
 AN ACT to amend the real property law, in relation to prohibiting  mort-
   gagees  from requiring mortgagors of certain real property to purchase
   flood insurance exceeding the amount required by federal law

   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  The  real property law is amended by adding a new section
 283 to read as follows:
   § 283.  LIMITS TO COMPULSORY FLOOD INSURANCE. 1.  NO  MORTGAGEE  SHALL
 REQUIRE  A MORTGAGOR TO WHOM THE MORTGAGEE MAKES, INCREASES, EXTENDS, OR
 RENEWS ANY LOAN SECURED BY IMPROVED  REAL  PROPERTY  OR  A  MOBILE  HOME
 LOCATED  OR  TO  BE  LOCATED  IN AN AREA THAT HAS BEEN IDENTIFIED BY THE
 DIRECTOR OF THE FEDERAL EMERGENCY MANAGEMENT AGENCY AS  AN  AREA  HAVING
 SPECIAL  FLOOD HAZARDS AND IN WHICH FLOOD INSURANCE HAS BEEN MADE AVAIL-
 ABLE UNDER THE NATIONAL FLOOD INSURANCE ACT TO  PURCHASE  MORE  COVERAGE
 THAN  THE  MINIMUM  AMOUNT  OF  COVERAGE  REQUIRED BY THE NATIONAL FLOOD
 INSURANCE ACT, THAT IS, AN AMOUNT EQUAL  TO  THE  OUTSTANDING  PRINCIPAL
 BALANCE  OF  THE  LOAN  OR  THE MAXIMUM LIMIT OF COVERAGE MADE AVAILABLE
 UNDER THE NATIONAL FLOOD INSURANCE ACT, WHICHEVER IS LESS.
   2. NO MORTGAGEE SHALL DENY A LOAN TO A MORTGAGOR OR PROSPECTIVE  MORT-
 GAGOR  OF  ANY  LOAN  SECURED BY IMPROVED REAL PROPERTY OR A MOBILE HOME
 LOCATED OR TO BE LOCATED IN AN AREA THAT  HAS  BEEN  IDENTIFIED  BY  THE
 DIRECTOR  OF  THE  FEDERAL EMERGENCY MANAGEMENT AGENCY AS AN AREA HAVING
 SPECIAL FLOOD HAZARDS AND IN WHICH FLOOD INSURANCE HAS BEEN MADE  AVAIL-
 ABLE UNDER THE NATIONAL FLOOD INSURANCE ACT, ON THE BASIS THAT THE MORT-
 GAGOR  DECLINES  TO  PURCHASE  FLOOD  INSURANCE COVERAGE IN EXCESS OF AN
 AMOUNT EQUAL TO THE OUTSTANDING PRINCIPAL BALANCE OF  THE  LOAN  OR  THE
 MAXIMUM LIMIT OF COVERAGE MADE AVAILABLE UNDER THE NATIONAL FLOOD INSUR-
 ANCE ACT, WHICHEVER IS LESS.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD02054-01-1
              

 A. 5598                             2
 
   3.  ANY MORTGAGEE FOUND TO HAVE REQUIRED A MORTGAGOR TO PURCHASE FLOOD
 INSURANCE  IN  EXCESS  OF  AN  AMOUNT EQUAL TO THE OUTSTANDING PRINCIPAL
 BALANCE OF THE LOAN OR THE MAXIMUM  LIMIT  OF  COVERAGE  MADE  AVAILABLE
 UNDER  THE  NATIONAL  FLOOD  INSURANCE  ACT, WHICHEVER IS LESS, SHALL BE
 PENALIZED  BY  A  FINE  NOT TO EXCEED TEN THOUSAND DOLLARS FOR THE FIRST
 VIOLATION, AND NOT TO EXCEED TWENTY THOUSAND DOLLARS FOR ANY  SUBSEQUENT
 VIOLATION.
   4.  ANY  MORTGAGEE FOUND TO HAVE DENIED A PROSPECTIVE MORTGAGOR A LOAN
 SECURED BY IMPROVED REAL PROPERTY OR A MOBILE HOME ON THE BASIS  OF  THE
 MORTGAGOR'S  FAILURE  TO PURCHASE FLOOD INSURANCE IN EXCESS OF AN AMOUNT
 EQUAL TO THE OUTSTANDING PRINCIPAL BALANCE OF THE LOAN  OR  THE  MAXIMUM
 LIMIT OF COVERAGE MADE AVAILABLE UNDER THE NATIONAL FLOOD INSURANCE ACT,
 WHICHEVER  IS LESS, SHALL BE PENALIZED BY A FINE NOT TO EXCEED TEN THOU-
 SAND DOLLARS FOR THE FIRST VIOLATION, AND NOT TO EXCEED TWENTY  THOUSAND
 DOLLARS FOR ANY SUBSEQUENT VIOLATION.
   § 2. This act shall take effect immediately.