Senate Bill S1221

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

                                  1221

                       2009-2010 Regular Sessions

                            I N  S E N A T E

                            January 28, 2009
                               ___________

Introduced  by Sens. THOMPSON, ONORATO, PARKER -- read twice and ordered
  printed, and when printed to be committed to the Committee on  Judici-
  ary

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
282 to read as follows:
  S  282.   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.
                                                           LBD03195-01-9
              

S. 1221                             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.
  S 2. This act shall take effect immediately.