S T A T E   O F   N E W   Y O R K
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                                  5787

                       2009-2010 Regular Sessions

                          I N  A S S E M B L Y

                            February 20, 2009
                               ___________

Introduced  by M. of A. FITZPATRICK, WALKER -- read once and referred to
  the Committee on Housing

AN ACT to amend the public authorities law, in relation to 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:

  Section 1. Subdivision 5 of section 2402  of  the  public  authorities
law,  as  amended by chapter 353 of the laws of 1984, is amended to read
as follows:
  (5) "Mortgage". A loan owed to a bank secured by a first lien on a fee
simple or leasehold estate in real property located  in  the  state  and
improved  by  a residential structure, whether or not insured or guaran-
teed by the United States of America or any  agency  thereof.  THE  TERM
"MORTGAGE"  SHALL  ALSO  MEAN  A  LOAN  OWED  TO A BANK OR TO THE AGENCY
SECURED BY A SECOND LIEN ON A FEE SIMPLE OR  LEASEHOLD  ESTATE  IN  REAL
PROPERTY  LOCATED  IN THE STATE AND IMPROVED BY A RESIDENTIAL STRUCTURE,
WHETHER OR NOT INSURED OR GUARANTEED BY THE UNITED STATES OF AMERICA  OR
ANY  AGENCY  THEREOF,  PROVIDED,  HOWEVER,  THAT  SUCH  SECOND LIEN: (A)
SECURES A LOAN ORIGINATED OR PURCHASED BY THE AGENCY, AND (B) IS MADE AT
THE SAME TIME AS A FIRST LIEN SECURING A LOAN PURCHASED  BY  THE  AGENCY
PURSUANT  TO  ITS  PROGRAMS  OR  IS MADE PURSUANT TO SECTION TWENTY-FOUR
HUNDRED FIVE-C OF THIS PART. "Real property" as used in this subdivision
shall include air rights.
  For the purposes of this title and of [section one hundred ninety and]
subsection [a] (A) of section one thousand four hundred fifty-six of the
tax law, "mortgage"  shall  include  housing  loans  as  defined  below.
Except  for  the  purposes  of subdivision seven of section two thousand
four hundred five and subdivision eight of  section  two  thousand  four
hundred  five-b of this [title] PART, "mortgage" shall also include: (A)
a loan owed to a bank by an individual borrower incurred for the purpose
of financing the purchase of certificates of stock or other evidence  of

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD04143-01-9
              

A. 5787                             2

ownership of an interest in, and a proprietary lease from, a cooperative
housing  corporation formed for the purpose of the cooperative ownership
of residential real estate in the state, secured  by  an  assignment  or
transfer  of  the benefits of such cooperative ownership, and containing
such terms and conditions as the agency may approve, AND (B) A LOAN OWED
TO THE AGENCY BY AN INDIVIDUAL AND SECURED BY A SECOND LIEN AND INCURRED
FOR SUCH PURPOSES, AND CONTAINING SUCH TERMS AND CONDITIONS AS THE AGEN-
CY MAY APPROVE, PROVIDED, HOWEVER, THAT: (I) SUCH LOAN WAS ORIGINATED OR
PURCHASED BY THE AGENCY WITH MONEY FROM AND (II) IS  MADE  AT  THE  SAME
TIME AS A FIRST LIEN SECURING A LOAN PURCHASED BY THE AGENCY PURSUANT TO
ITS  PROGRAMS  OR IS MADE PURSUANT TO SECTION TWENTY-FOUR HUNDRED FIVE-C
OF THIS PART.
  S 2. Subdivision 5 of section 2402 of the public authorities  law,  as
separately  amended  by  chapters  376  and 1023 of the laws of 1971, is
amended to read as follows:
  (5) "Mortgage". A loan owed to a bank secured by a first lien on a fee
simple or leasehold estate in real property located  in  the  state  and
improved  by  a residential structure, whether or not insured or guaran-
teed by the United States of America or any agency thereof.    THE  TERM
"MORTGAGE"  SHALL  ALSO  MEAN  A  LOAN  OWED  TO A BANK OR TO THE AGENCY
SECURED BY A SECOND LIEN ON A FEE SIMPLE OR  LEASEHOLD  ESTATE  IN  REAL
PROPERTY  LOCATED  IN THE STATE AND IMPROVED BY A RESIDENTIAL STRUCTURE,
WHETHER OR NOT INSURED OR GUARANTEED BY THE UNITED STATES OF AMERICA  OR
ANY  AGENCY  THEREOF,  PROVIDED,  HOWEVER,  THAT SUCH SECOND LIEN:   (A)
SECURES A LOAN ORIGINATED OR PURCHASED BY THE AGENCY, AND (B) IS MADE AT
THE SAME TIME AS A FIRST LIEN SECURING A LOAN PURCHASED  BY  THE  AGENCY
PURSUANT  TO  ITS  PROGRAMS  OR  IS MADE PURSUANT TO SECTION TWENTY-FOUR
HUNDRED FIVE-C OF THIS PART. "Real property" as used in this subdivision
shall include air rights.
  Except for the purposes of subdivision seven of section  two  thousand
four  hundred  five  OF  THIS PART, "mortgage" shall also include: (A) a
loan owed to a bank by an individual borrower incurred for  the  purpose
of  financing the purchase of certificates of stock or other evidence of
ownership of an interest in, and a proprietary lease from, a cooperative
housing corporation formed for the purpose of the cooperative  ownership
of  residential  real  estate  in the state, secured by an assignment or
transfer of the benefits of such cooperative ownership,  and  containing
such terms and conditions as the agency may approve, AND (B) A LOAN OWED
TO THE AGENCY BY AN INDIVIDUAL AND SECURED BY A SECOND LIEN AND INCURRED
FOR SUCH PURPOSES, AND CONTAINING SUCH TERMS AND CONDITIONS AS THE AGEN-
CY MAY APPROVE, PROVIDED, HOWEVER, THAT: (I) SUCH LOAN WAS ORIGINATED OR
PURCHASED  BY  THE  AGENCY  WITH MONEY FROM AND (II) IS MADE AT THE SAME
TIME AS A FIRST LIEN SECURING A LOAN PURCHASED BY THE AGENCY PURSUANT TO
ITS PROGRAMS OR IS MADE PURSUANT TO SECTION TWENTY-FOUR  HUNDRED  FIVE-C
OF THIS PART.
  S  3. Subdivision 30 of section 2404 of the public authorities law, as
renumbered by chapter 229 of the laws of 2007, is renumbered subdivision
31 and a new subdivision 30 is added to read as follows:
  (30) TO ORIGINATE MORTGAGES CONSTITUTING A SECOND LIEN  IN  ACCORDANCE
WITH  SUBDIVISION  FIVE OF SECTION TWENTY-FOUR HUNDRED TWO OF THIS PART,
PURSUANT TO ANY PROGRAM AUTHORIZED BY THIS TITLE.
  S 4. Paragraph (e) of subdivision 7 of  section  2405  of  the  public
authorities  law,  as  amended  by  chapter  915 of the laws of 1982, is
amended to read as follows:
  (e) the mortgage constitutes a valid first OR SECOND lien on the  real
property  described to the agency IN ACCORDANCE WITH SUBDIVISION FIVE OF

A. 5787                             3

SECTION TWENTY-FOUR HUNDRED TWO OF THIS PART subject only to real  prop-
erty  taxes  not  yet  due, installments of assessments not yet due, and
easements and restrictions of record which do not adversely affect, to a
material  degree,  the use or value of the real property or improvements
thereon;
  S 5. Paragraph (e) of subdivision 7 of  section  2405  of  the  public
authorities  law,  as  amended  by  chapter 1023 of the laws of 1971, is
amended to read as follows:
  (e) the mortgage constitutes a valid first OR SECOND lien on the  real
property  described to the agency IN ACCORDANCE WITH SUBDIVISION FIVE OF
SECTION TWENTY-FOUR HUNDRED TWO OF THIS PART subject only to real  prop-
erty  taxes  not  yet  due, installments of assessments not yet due, and
easements and restrictions of record which do not adversely affect, to a
material degree, the use or value of the real property  or  improvements
thereon;
  S  6.  Paragraph  (f) of subdivision 8 of section 2405-b of the public
authorities law, as added by chapter 915 of the laws of 1982, is amended
to read as follows:
  (f) the mortgage constitutes a valid first OR SECOND lien on the  real
property  described to the agency IN ACCORDANCE WITH SUBDIVISION FIVE OF
SECTION TWENTY-FOUR HUNDRED TWO OF THIS PART subject only to real  prop-
erty  taxes  not  yet  due, installments of assessments not yet due, and
easements and restrictions of record which do not adversely affect, to a
material degree, the use or value [or] OF the real property or  improve-
ments thereon;
  S  7. This act shall take effect immediately, provided that the amend-
ments to subdivision 5 of section 2402 of the  public  authorities  law,
made  by section one of this act, shall be subject to the expiration and
reversion of such subdivision pursuant to section 16 of chapter  915  of
the  laws  of  1982,  as  amended, when upon such date the provisions of
section two of this act shall take effect; provided, further,  that  the
amendments  to  paragraph  (e)  of  subdivision 7 of section 2405 of the
public authorities law, made by section  four  of  this  act,  shall  be
subject  to the expiration and reversion of such subdivision pursuant to
section 16 of chapter 915 of the laws of 1982,  as  amended,  when  upon
such  date the provisions of section five of this act shall take effect;
and provided, further, however, that the amendments to paragraph (f)  of
subdivision  8 of section 2405-b of the  public authorities law, made by
section six of this act, shall not affect the repeal of such section and
shall be deemed repealed therewith.