senate Bill S3651

2011-2012 Legislative Session

Relates to refinancing of an existing mortgage loan

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Archive: Last Bill Status - In Committee


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

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Actions

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Assembly Actions - Lowercase
Senate Actions - UPPERCASE
Jan 04, 2012 referred to banks
Feb 28, 2011 referred to banks

S3651 - Bill Details

Current Committee:
Law Section:
Banking Law
Laws Affected:
Amd ยง595-a, Bank L
Versions Introduced in 2009-2010 Legislative Session:
S4875

S3651 - Bill Texts

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Relates to refinancing of an existing mortgage loan; provides for a separate disclosure which compares monthly payments under the previous mortgage with the combined monthly payments for the new mortgage loan, property tax and insurance.

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BILL NUMBER:S3651

TITLE OF BILL:
An act
to amend the banking law, in relation to refinancing of an existing
mortgage loan

PURPOSE:
To ensure that consumers are appropriately informed when refinancing a
mortgage and have the ability to compare the total monthly costs of
the previous loan with the total monthly costs of the new loan.

SUMMARY OF PROVISIONS:
Section 595-a(3) of the Banking Law is amended to require mortgage
brokers, mortgage bankers or exempt organizations to provide a
special disclosure for any mortgage refinancing where the mortgagor
will no longer be paying property tax or insurance premiums into an
escrow account. In those cases, the disclosure must compare the total
monthly payments under the previous loan with the combined monthly
payments for the new loan, real property taxes and insurance.

JUSTIFICATION:
Consumers may refinance a mortgage loan for numerous reasons. An
important consideration is the monthly cost of the new loan versus
the monthly cost of the previous loan.

Unfortunately, in some cases, this comparison may be misleading or
invalid because the homeowner does not realize or understand that the
new total does not include property tax or insurance payments, which
may have been included in the previous loan. There is concern that
Some lenders or mortgage brokers may obscure this information, or may
actively mislead the homeowner in order to pressure them into
refinance the existing loan. As a result, the new loan may appear to
be a better deal, but in reality may be a worse deal.

This bill seeks to ensure that consumers are adequately notified if
their new loan will no longer include property tax or insurance
payments, and that they are given a clear comparison of the full
monthly costs under the previous loan and the full monthly costs
under the new loan. This will assist homeowners in making an informed
decision.

LEGISLATIVE HISTORY:
S.5619 in 2007-2008: Referred to Banks
S.4875 in 2009-2010: Referred to Banks

FISCAL IMPLICATIONS:
None.

EFFECTIVE DATE:
On the 180th day after it shall have become a law.

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

                                  3651

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                            February 28, 2011
                               ___________

Introduced  by  Sen.  SMITH  -- read twice and ordered printed, and when
  printed to be committed to the Committee on Banks

AN ACT to amend the banking law, in relation to refinancing of an exist-
  ing mortgage loan

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

  Section  1.  Subdivision  3  of  section  595-a  of the banking law is
amended by adding a new paragraph (e) to read as follows:
  (E) FOR ANY REFINANCING OF AN EXISTING MORTGAGE LOAN, WHERE THE  MORT-
GAGOR  WILL  NO LONGER BE PAYING PROPERTY TAX OR INSURANCE PAYMENTS INTO
AN ESCROW ACCOUNT, EACH MORTGAGE  BROKER,  MORTGAGE  BANKER  AND  EXEMPT
ORGANIZATION  SHALL,  PRIOR  TO  CLOSING,  PROVIDE A SEPARATE DISCLOSURE
WHICH COMPARES THE TOTAL MONTHLY PAYMENTS UNDER  THE  PREVIOUS  MORTGAGE
WITH THE COMBINED MONTHLY PAYMENTS FOR THE NEW MORTGAGE LOAN, REAL PROP-
ERTY  TAXES  AND  INSURANCE.  THE  BANKING  BOARD  MAY SPECIFY THE FORM,
CONTENT AND TIMING OF SUCH DISCLOSURE.
  S 2. This act shall take effect on the one hundred eightieth day after
it shall have become a law.





 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD09856-01-1

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