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Senate Bill S4038

Signed By Governor

2011-2012 Legislative Session

Prohibits home improvement contractors from acting on behalf of mortgage brokers

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Archive: Last Bill Status - Signed by Governor

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Bill Amendments

2011-S4038 - Details

Law Section:
Banking Law
Laws Affected:
Add §595-c, Bank L
Versions Introduced in 2009-2010 Legislative Session:
S5102

2011-S4038 - Summary

Prohibits home improvement contractors from also acting on behalf of mortgage brokers; prohibits a mortgage broker from paying a home improvement contractor directly unless they perform their own inspection of the completed work.

2011-S4038 - Sponsor Memo

2011-S4038 - Bill Text download pdf 

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

                                  4038

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                             March 15, 2011
                               ___________

Introduced  by  Sen.  SAVINO -- 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 the dealings of mortgage
  brokers and home improvement contractors

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

  Section 1. The banking law is amended by adding a new section 595-c to
read as follows:
  S  595-C. REGULATION OF DEALINGS OF MORTGAGE BROKERS AND HOME IMPROVE-
MENT CONTRACTORS. 1. A HOME IMPROVEMENT CONTRACTOR SHALL NOT REPRESENT A
MORTGAGE BROKER WHILE SOLICITING HOME IMPROVEMENT CONTRACTS.  THE  STAFF
OF  A  HOME IMPROVEMENT CONTRACTOR SHALL NOT ACT ON BEHALF OF A MORTGAGE
BROKER IN ANY TRANSACTION.
  2. A MORTGAGE BROKER SHALL  NOT  PAY  A  HOME  IMPROVEMENT  CONTRACTOR
DIRECTLY UNLESS THEY PERFORM THEIR OWN INSPECTION OF THE COMPLETED WORK.
  3.  FOR  THE  PURPOSE  OF  THIS SECTION, "HOME IMPROVEMENT CONTRACTOR"
MEANS A PERSON, FIRM OR  CORPORATION  WHICH  OWNS  OR  OPERATES  A  HOME
IMPROVEMENT BUSINESS OR WHO UNDERTAKES, OFFERS TO UNDERTAKE OR AGREES TO
PERFORM ANY HOME IMPROVEMENT FOR A FEE AND FOR WHOM THE TOTAL CASH PRICE
OF  ALL OF HIS HOME IMPROVEMENT CONTRACTS WITH ALL HIS CUSTOMERS EXCEEDS
ONE THOUSAND FIVE HUNDRED DOLLARS DURING ANY PERIOD  OF  TWELVE  CONSEC-
UTIVE  MONTHS.  HOME  IMPROVEMENT  CONTRACTOR DOES NOT INCLUDE A PERSON,
FIRM, CORPORATION, LANDLORD, COOPERATIVE CORPORATION, CONDOMINIUM  BOARD
OF  MANAGERS,  JOINT TENANT OR CO-TENANT THAT OWNS, IN WHOLE OR IN PART,
THE PROPERTY TO BE IMPROVED.
  S 2. This act shall take effect on the ninetieth day  after  it  shall
have become a law.


 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD04664-01-1

2011-S4038A - Details

Law Section:
Banking Law
Laws Affected:
Add §595-c, Bank L
Versions Introduced in 2009-2010 Legislative Session:
S5102

2011-S4038A - Summary

Prohibits home improvement contractors from also acting on behalf of mortgage brokers; prohibits a mortgage broker from paying a home improvement contractor directly unless they perform their own inspection of the completed work.

2011-S4038A - Sponsor Memo

2011-S4038A - Bill Text download pdf 

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

                                 4038--A

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                             March 15, 2011
                               ___________

Introduced  by  Sen.  SAVINO -- read twice and ordered printed, and when
  printed to be  committed  to  the  Committee  on  Banks  --  committee
  discharged, bill amended, ordered reprinted as amended and recommitted
  to said committee

AN ACT to amend the banking law, in relation to the dealings of mortgage
  brokers and home improvement contractors

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

  Section 1. The banking law is amended by adding a new section 595-c to
read as follows:
  S 595-C. REGULATION OF DEALINGS OF MORTGAGE BROKERS AND HOME  IMPROVE-
MENT  CONTRACTORS.  1.  NO HOME IMPROVEMENT CONTRACTOR NOR ANY AGENTS OR
SALESPERSONS THEREOF SHALL REPRESENT, ACT AS AN AGENT FOR, OR ADVERTISE,
PROMOTE OR ARRANGE FOR THE SERVICES OF A MORTGAGE BROKER OR  ITS  AFFIL-
IATE WHILE SOLICITING HOME IMPROVEMENT CONTRACTS NOR RECEIVE ANYTHING OF
VALUE  FROM  A  MORTGAGE  BROKER  OR ITS AFFILIATE FOR THE REFERRAL OF A
BORROWER TO A MORTGAGE BROKER. THE STAFF OF A HOME IMPROVEMENT  CONTRAC-
TOR SHALL NOT ACT ON BEHALF OF A MORTGAGE BROKER IN ANY TRANSACTION.
  2.  A  MORTGAGE  BROKER  SHALL  NOT  PAY A HOME IMPROVEMENT CONTRACTOR
DIRECTLY. A HOME IMPROVEMENT CONTRACTOR MAY  RECEIVE  PAYMENT  FROM  THE
PROCEEDS  OF  A HOME IMPROVEMENT LOAN PAYABLE SOLELY TO THE BORROWER OR,
AT THE ELECTION OF THE BORROWER,  THROUGH  AN  INDEPENDENT  THIRD  PARTY
ESCROW  AGENT  IN  ACCORDANCE  WITH  THE  TERMS ESTABLISHED IN A WRITTEN
AGREEMENT SIGNED BY THE BORROWER, THE LENDER AND THE CONTRACTOR PRIOR TO
DISBURSEMENT. A MORTGAGE BROKER SHALL NOT OFFER  A  HOMEOWNER  DIFFERENT
LOAN  TERMS  CONTINGENT  ON  THE  HOMEOWNER  EXECUTING  AN AGREEMENT FOR
PAYMENT THROUGH AN INDEPENDENT THIRD PARTY AS DESCRIBED IN THE PRECEDING
SENTENCE. ANY SUCH AGREEMENT  SHALL  CONTAIN  A  CLEAR  AND  CONSPICUOUS
DISCLOSURE:  YOU  ARE  NOT  REQUIRED  TO EXECUTE THIS AGREEMENT. YOU MAY
INSTEAD RECEIVE PAYMENT DIRECTLY FROM (NAME OF MORTGAGE BROKER).   (NAME

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD04664-03-1

co-Sponsors

2011-S4038B (ACTIVE) - Details

Law Section:
Banking Law
Laws Affected:
Add §595-c, Bank L
Versions Introduced in 2009-2010 Legislative Session:
S5102

2011-S4038B (ACTIVE) - Summary

Prohibits home improvement contractors from also acting on behalf of mortgage brokers; prohibits a mortgage broker from paying a home improvement contractor directly unless they perform their own inspection of the completed work.

2011-S4038B (ACTIVE) - Sponsor Memo

2011-S4038B (ACTIVE) - Bill Text download pdf 

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

                                 4038--B
    Cal. No. 781

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                             March 15, 2011
                               ___________

Introduced  by  Sen.  SAVINO -- read twice and ordered printed, and when
  printed to be  committed  to  the  Committee  on  Banks  --  committee
  discharged, bill amended, ordered reprinted as amended and recommitted
  to  said  committee -- reported favorably from said committee, ordered
  to first and second report, ordered to a third  reading,  amended  and
  ordered reprinted, retaining its place in the order of third reading

AN ACT to amend the banking law, in relation to the dealings of mortgage
  brokers and home improvement contractors

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

  Section 1. The banking law is amended by adding a new section 595-c to
read as follows:
  S 595-C. REGULATION OF DEALINGS OF MORTGAGE BROKERS AND HOME  IMPROVE-
MENT  CONTRACTORS.  1.  NO HOME IMPROVEMENT CONTRACTOR NOR ANY AGENTS OR
SALESPERSONS THEREOF SHALL REPRESENT, ACT AS AN AGENT FOR, OR ADVERTISE,
PROMOTE OR ARRANGE FOR THE SERVICES OF A MORTGAGE BROKER OR  ITS  AFFIL-
IATE WHILE SOLICITING HOME IMPROVEMENT CONTRACTS NOR RECEIVE ANYTHING OF
VALUE  FROM  A  MORTGAGE  BROKER  OR ITS AFFILIATE FOR THE REFERRAL OF A
BORROWER TO A MORTGAGE BROKER. THE STAFF OF A HOME IMPROVEMENT  CONTRAC-
TOR SHALL NOT ACT ON BEHALF OF A MORTGAGE BROKER IN ANY TRANSACTION.
  2. WHERE A MORTGAGE BROKER HAS SOLICITED, PROCESSED, PLACED OR NEGOTI-
ATED  A  MORTGAGE  LOAN, A HOME IMPROVEMENT CONTRACTOR SHALL NOT BE PAID
DIRECTLY BUT INSTEAD MAY RECEIVE PAYMENT FROM THE  PROCEEDS  OF  A  HOME
IMPROVEMENT  LOAN  PAYABLE SOLELY TO THE BORROWER OR, AT THE ELECTION OF
THE BORROWER, THROUGH AN INDEPENDENT THIRD PARTY ESCROW AGENT IN ACCORD-
ANCE WITH THE TERMS ESTABLISHED IN A WRITTEN  AGREEMENT  SIGNED  BY  THE
BORROWER,  THE  LENDER AND THE CONTRACTOR PRIOR TO DISBURSEMENT. A MORT-
GAGE BROKER SHALL NOT OFFER A HOMEOWNER DIFFERENT LOAN TERMS  CONTINGENT
ON THE HOMEOWNER EXECUTING AN AGREEMENT FOR PAYMENT THROUGH AN INDEPEND-
ENT  THIRD PARTY AS DESCRIBED IN THE PRECEDING SENTENCE. ANY SUCH AGREE-
MENT SHALL CONTAIN A CLEAR  AND  CONSPICUOUS  DISCLOSURE:  YOU  ARE  NOT

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

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