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

                                  1240

                       2009-2010 Regular Sessions

                          I N  A S S E M B L Y

                               (PREFILED)

                             January 7, 2009
                               ___________

Introduced  by M. of A. LANCMAN -- read once and referred to the Commit-
  tee on Banks

AN ACT to amend the banking law, in relation to enacting the "disclosure
  in lending act"

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. This act shall be known and may be cited as the "disclosure
in lending act".
  S 2. The banking law is amended by adding a new section 6-n to read as
follows:
  S  6-N. DISCLOSURE TO BORROWERS. 1.  FOR PURPOSES OF THIS SECTION, THE
TERM "SUB-PRIME MORTGAGE" MEANS FOR MORTGAGES SECURED BY A FIRST LIEN ON
A DWELLING, THE TERM MEANS A MORTGAGE FOR WHICH THE APR IS GREATER  THAN
THREE  PERCENTAGE POINTS ABOVE THE YIELD ON UNITED STATES TREASURY SECU-
RITIES HAVING COMPARABLE PERIODS OF MATURITY, AS OF THE FIFTEENTH DAY OF
THE PRECEDING MONTH IF THE RATE IS SET BETWEEN THE FIRST AND  THE  FOUR-
TEENTH DAY OF THE MONTH AND AS OF THE FIFTEENTH DAY OF THE CURRENT MONTH
IF THE RATE IS SET ON OR AFTER THE FIFTEENTH DAY.
  FOR  MORTGAGES  SECURED  BY A SUBORDINATE LIEN ON A DWELLING, THE TERM
MEANS A MORTGAGE FOR WHICH THE  APR  IS  GREATER  THAN  FIVE  PERCENTAGE
POINTS  ABOVE  THE  YIELD  ON  UNITED  STATES TREASURY SECURITIES HAVING
COMPARABLE PERIODS OF MATURITY, AS OF THE FIFTEENTH DAY OF THE PRECEDING
MONTH IF THE RATE IS SET BETWEEN THE FIRST AND THE FOURTEENTH DAY OF THE
MONTH AND AS OF THE FIFTEENTH DAY OF THE CURRENT MONTH IF  THE  RATE  IS
SET ON OR AFTER THE FIFTEENTH DAY.
  2.  THE TERM "MORTGAGE BROKER" MEANS A PERSON WHO, FOR COMPENSATION OR
IN ANTICIPATION OF COMPENSATION, ARRANGES OR NEGOTIATES, OR ATTEMPTS  TO
ARRANGE OR NEGOTIATE, HOME MORTGAGE LOANS OR COMMITMENTS FOR SUCH LOANS,
OR  REFERS APPLICANTS OR PROSPECTIVE APPLICANTS TO CREDITORS, OR SELECTS
OR OFFERS TO SELECT CREDITORS TO WHOM REQUESTS FOR CREDIT MAY BE MADE.

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

                                                           LBD01050-01-9

A. 1240                             2

  3. EVERY MORTGAGE BROKER AND LENDER  SHALL  PROVIDE  A  DISCLOSURE  TO
BORROWERS  OF THE TRUE COSTS AND OBLIGATIONS OF LOANS AND MORTGAGES IN A
FORMAT TO BE  ESTABLISHED  BY  THE  DEPARTMENT.  SUCH  DISCLOSURE  SHALL
INCLUDE, BUT NOT BE LIMITED TO, A CLEAR DEPICTION, CHART OR TABLE OF THE
BORROWER'S PRE-ARM RESET AND POST-ARM RESET MONTHLY PAYMENTS, THE ANNUAL
PROPERTY  TAX, INSURANCE PAYMENTS, INFORMATION ON THE RECOMMENDED AMOUNT
OF MONTHLY INCOME WHICH A BORROWER SHOULD HAVE IN ORDER TO  ASSUME  SUCH
MORTGAGE, TAX AND INSURANCE OBLIGATIONS AND THE DEPARTMENT WEBSITE DEDI-
CATED  TO  EXPLAINING  THE RISKS OF SUB-PRIME MORTGAGES. SUCH DEPICTION,
CHART OR TABLE SHALL BE PRESENTED TO THE BORROWER IN WRITING AT THE TIME
OF EACH OFFER AND AT LEAST SIXTY DAYS PRIOR TO CLOSING.
  4. THE DEPARTMENT SHALL ESTABLISH A WEBSITE  DEDICATED  TO  EXPLAINING
THE  RISKS  OF  SUB-PRIME MORTGAGES. IT SHALL INCLUDE A CALCULATOR WHERE
BORROWERS MAY ENTER RELEVANT MORTGAGE PAYMENT AND INCOME INFORMATION  TO
DETERMINE WHETHER THE MORTGAGE IS WITHIN ESTABLISHED GUIDELINES FOR SUCH
BORROWER'S BUDGET.
  5.  LENDERS  AND  MORTGAGE BROKERS MAKING OR BROKERING SUB-PRIME MORT-
GAGES SHALL HAVE A PROMINENT LINK ON THEIR WEBSITE TO  THE  DEPARTMENT'S
SUB-PRIME WEBPAGE.
  6.  THE  ATTORNEY  GENERAL,  THE  SUPERINTENDENT,  OR  ANY  PARTY TO A
SUB-PRIME HOME MORTGAGE MAY ENFORCE THE PROVISIONS OF THIS SECTION.
  7. A PRIVATE ACTION AGAINST THE LENDER OR MORTGAGE BROKER PURSUANT  TO
THIS  SECTION  MUST  BE COMMENCED WITHIN SIX YEARS OF ORIGINATION OF THE
SUB-PRIME HOME MORTGAGE.
  8. ANY LENDER OR MORTGAGE BROKER  FOUND  BY  A  PREPONDERANCE  OF  THE
EVIDENCE  TO  HAVE VIOLATED THIS SECTION SHALL BE LIABLE TO THE BORROWER
FOR THE FOLLOWING:
  (A) ACTUAL DAMAGES, INCLUDING CONSEQUENTIAL  AND  INCIDENTAL  DAMAGES;
AND
  (B)  STATUTORY DAMAGES OF FIVE THOUSAND DOLLARS PER VIOLATION OR TWICE
THE AMOUNT OF POINTS AND FEES AND  CLOSING  COSTS  AS  DEFINED  IN  THIS
SECTION, WHICHEVER IS GREATER.
  9.  A  COURT MAY ALSO AWARD REASONABLE ATTORNEYS' FEES TO A PREVAILING
BORROWER.
  10. A BORROWER MAY BE GRANTED INJUNCTIVE, DECLARATORY AND  SUCH  OTHER
EQUITABLE  RELIEF AS THE COURT DEEMS APPROPRIATE IN AN ACTION TO ENFORCE
COMPLIANCE WITH THIS SECTION.
  11. UPON A FINDING BY THE COURT OF AN  INTENTIONAL  VIOLATION  BY  THE
LENDER OR MORTGAGE BROKER OF THIS SECTION, OR REGULATION THEREUNDER, THE
HOME  MORTGAGE  AGREEMENT  SHALL  BE RENDERED VOID, AND THE LENDER SHALL
HAVE NO RIGHT TO COLLECT, RECEIVE OR RETAIN ANY PRINCIPAL, INTEREST,  OR
OTHER  CHARGES WHATSOEVER WITH RESPECT TO THE MORTGAGE, AND THE BORROWER
MAY RECOVER ANY PAYMENTS MADE UNDER THE AGREEMENT.
  12. UPON A JUDICIAL FINDING THAT A SUB-PRIME  HOME  MORTGAGE  VIOLATES
ANY  PROVISION  OF  THIS SECTION, WHETHER SUCH VIOLATION IS RAISED AS AN
AFFIRMATIVE CLAIM OR AS A  DEFENSE,  THE  MORTGAGE  TRANSACTION  MAY  BE
RESCINDED.  SUCH  REMEDY  OF  RESCISSION SHALL BE AVAILABLE AS A DEFENSE
WITHOUT TIME LIMITATION.
  13. THE REMEDIES PROVIDED IN THIS SECTION ARE NOT INTENDED TO  BE  THE
EXCLUSIVE REMEDIES AVAILABLE TO A BORROWER OF A SUB-PRIME HOME MORTGAGE.
  14.  IN  ANY  ACTION  BY  AN  ASSIGNEE TO ENFORCE A MORTGAGE AGAINST A
BORROWER IN DEFAULT MORE THAN SIXTY DAYS OR IN FORECLOSURE,  A  BORROWER
MAY  ASSERT  ANY  CLAIMS IN RECOUPMENT AND DEFENSES TO PAYMENT UNDER THE
PROVISIONS OF THIS SECTION AND WITH RESPECT  TO  THE  MORTGAGE,  WITHOUT
TIME  LIMITATIONS,  THAT  THE BORROWER COULD ASSERT AGAINST THE ORIGINAL
LENDER OR MORTGAGE BROKER OF THE MORTGAGE.

A. 1240                             3

  15. THE PROVISIONS OF THIS SECTION SHALL  BE  SEVERABLE,  AND  IF  ANY
PHRASE,  CLAUSE, SENTENCE, OR PROVISION IS DECLARED TO BE INVALID, OR IS
PREEMPTED BY FEDERAL LAW OR REGULATION, THE VALIDITY OF THE REMAINDER OF
THIS SECTION SHALL NOT BE AFFECTED THEREBY. IF  ANY  PROVISION  OF  THIS
SECTION  IS  DECLARED TO BE INAPPLICABLE TO ANY SPECIFIC CATEGORY, TYPE,
OR KIND OF POINTS AND FEES, THE PROVISIONS OF THIS SECTION  SHALL  NONE-
THELESS CONTINUE TO APPLY WITH RESPECT TO ALL OTHER POINTS AND FEES.
  S 3. This act shall take effect on the one hundred eightieth day after
it shall have become a law; provided, however, that effective immediate-
ly,  the  addition,  amendment  and/or  repeal of any rule or regulation
necessary for the implementation of this act on its effective  date  are
authorized  and  directed  to  be  made  and completed on or before such
effective date.