Assembly Bill A7329

Signed By Governor
2011-2012 Legislative Session

Prohibits compensation based on home loan terms by a mortgage broker or mortgage lender

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Archive: Last Bill Status Via S886 - Signed by Governor

  • Introduced
    • In Committee Assembly
    • In Committee Senate
    • On Floor Calendar Assembly
    • On Floor Calendar Senate
    • Passed Assembly
    • Passed Senate
  • Delivered to Governor
  • Signed By Governor

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2011-A7329 (ACTIVE) - Details

See Senate Version of this Bill:
S886
Law Section:
Banking Law
Laws Affected:
Amd §§590-b, 6-l & 6-m, Bank L
Versions Introduced in 2009-2010 Legislative Session:
A10977, S7669

2011-A7329 (ACTIVE) - Summary

Prohibits compensation based on home loan terms by mortgage brokers or mortgage lenders.

2011-A7329 (ACTIVE) - Bill Text download pdf 

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

                                  7329

                       2011-2012 Regular Sessions

                          I N  A S S E M B L Y

                             April 29, 2011
                               ___________

Introduced by M. of A. BARRON -- read once and referred to the Committee
  on Banks

AN ACT to amend the banking law, in relation to prohibiting compensation
  based  on  the  terms  of a home loan by mortgage brokers and mortgage
  lenders

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

  Section 1. Section 590-b of the banking law is amended by adding a new
subdivision 3-a to read as follows:
  3-A.  IN  CONNECTION  WITH  THE MAKING OR BROKERING OF A HOME LOAN, NO
PERSON MAY PROVIDE, AND  NO  MORTGAGE  BROKER  OR  MORTGAGE  LENDER  MAY
RECEIVE,  DIRECTLY  OR INDIRECTLY, ANY COMPENSATION THAT IS BASED ON, OR
VARIES WITH, THE TERMS OF ANY HOME  LOAN.  THIS  SUBDIVISION  SHALL  NOT
PROHIBIT COMPENSATION BASED ON THE PRINCIPAL BALANCE OF THE LOAN.
  S 2. Paragraph (s) of subdivision 2 of section 6-l of the banking law,
as  amended  by  chapter  507 of the laws of 2009, is amended to read as
follows:
  (s) No [abusive] yield spread premiums. [In arranging a high-cost home
loan, the mortgage broker shall, within three days after receipt  of  an
application,  disclose the exact amount and methodology of total compen-
sation that the broker will receive. Such amount may be paid  as  direct
compensation  from the lender, direct compensation from the borrower, or
a combination of the two if permitted by applicable law.  The provisions
of this paragraph shall not  restrict  the  ability  of  a  borrower  to
utilize  a yield spread premium in order to offset any up front costs by
accepting a higher interest rate if permitted by applicable law. If  the
borrower  chooses  this  option,  any  compensation from the lender that
exceeds the amount of total compensation owed  to  the  broker  must  be
credited  to  the  borrower. The superintendent shall prescribe the form
that such disclosure shall take. This provision  shall  not  restrict  a
broker  from  accepting  a lesser amount of compensation.] IN CONNECTION

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD03866-01-1

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