S T A T E O F N E W Y O R K
________________________________________________________________________
2632
2011-2012 Regular Sessions
I N A S S E M B L Y
January 19, 2011
___________
Introduced by M. of A. FITZPATRICK -- 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 section 1 of chapter 208 of the laws of 2010, 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 include 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 by a government sponsored enterprise or is
made at the same time as a new housing loan purchased by the agency
pursuant to section twenty-four hundred five-c of this part, provided
that, in the case of any second lien, the mortgagor shall be obligated
to contribute from his or her own verifiable funds an amount not less
than such percentage as the agency shall determine, of the lower of the
purchase price or appraised value of the property subject to the first
lien. "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) of section one thousand four hundred fifty-six of the tax
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD03500-01-1
A. 2632 2
law, "mortgage" shall include housing loans as defined below. Except for
the purposes of subdivision seven of section [two thousand four] TWEN-
TY-FOUR hundred five and subdivision eight of section [two thousand
four] TWENTY-FOUR hundred five-b 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 owner-
ship, 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 AGENCY 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
amended by section 2 of chapter 208 of the laws of 2010, 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 include 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 by a government sponsored enterprise or is
made at the same time as a new housing loan purchased by the agency
pursuant to section twenty-four hundred five-c of this part, provided
that, in the case of any second lien, the mortgagor shall be obligated
to contribute from his or her own verifiable funds an amount not less
than such percentage as the agency shall determine, of the lower of the
purchase price or appraised value of the property subject to the first
lien. "Real property" as used in this subdivision shall include air
rights.
Except for the purposes of subdivision seven of section [two thousand
four] TWENTY-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 owner-
ship, 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 AGENCY 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
A. 2632 3
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
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 subdivision 5 of section 2402 of the public authorities
law, made by section two of this act, shall not affect the expiration of
such subdivision and shall be deemed to expire therewith; 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 subdivi-
sion 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.