senate Bill S7148

2013-2014 Legislative Session

Relates to powers of the state of New York mortgage agency

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Archive: Last Bill Status - Passed Senate

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

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Assembly Actions - Lowercase
Senate Actions - UPPERCASE
Jun 17, 2014 referred to housing
delivered to assembly
passed senate
May 21, 2014 advanced to third reading
May 20, 2014 2nd report cal.
May 19, 2014 1st report cal.781
May 01, 2014 referred to housing, construction and community development


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May 19, 2014 - Housing, Construction and Community Development committee Vote

Aye with Reservations
show Housing, Construction and Community Development committee vote details

Housing, Construction and Community Development Committee Vote: May 19, 2014

nay (2)
excused (2)

S7148 - Bill Details

See Assembly Version of this Bill:
Current Committee:
Law Section:
Public Authorities Law
Laws Affected:
Amd ยง2404, Pub Auth L

S7148 - Bill Texts

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Relates to powers of the state of New York mortgage agency.

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TITLE OF BILL: An act to amend the public authorities law, in
relation to the powers of the state of New York mortgage agency

Purpose of the Bill:

The bill would grant the State of New York Mortgage Agency ("SONYMA"
or "Agency") authority to sell its mortgages at private sales.

Summary of Provisions:

Section 1 of the bill would amend Section 2404(9) of the 'Public
Authorities Law to remove the limitation on the Agency's authority to
sell mortgages at private sales.

Section 2 of the bill provides for an immediate effective date.

Existing Law:

SONYMA can only sell mortgages in private sales to an agency of the
federal government, the Federal National Mortgage Association or to a
bank from which it has purchased loans.

Legislative History:


Statement in Support:

The global credit and liquidity crisis severely impacted the way
SONYMA funded its programs. The disruption in the short-term debt
markets resulted in higher interest rates and shut off access to the
capital markets for extended periods of time. SONYMA found itself
unable to use the capital markets to issue bonds to fund its programs.

SONYMA's mortgage programs are available to mortgagors throughout New
York. Qualifying mortgage loans made to low and moderate income
homebuyers are delivered to SONYMA by its participating banks on a
weekly basis for purchase by SONYMA, at stated rates of interest.
SONYMA funds the loan purchases primarily through issuing tax-exempt
bonds in the capital markets. Throughout its history, SONYMA had never
been precluded from issuing bonds on a regular basis and when needed
to fund bond purchases.

For the first time, during the fall of 2008 and continuing into 2009,
SONYMA and other housing bond issuers could not schedule a bond
issuance to fund mortgages due to the credit crisis. SONYMA had to use
excess available funds, which would normally be used to subsidize
programs to acquire its mortgage loans. Only when the federal
government stepped in with its New Issue Bond Program (NIBP) (a
private placement bond program), was SONYMA able to come to market
with bond issues.

The NIBP bond program ended in 2011 and since then, SONYMA has had to
limit itself to funding its programs through fixed rate bonds.
SONYMA, like other housing bond issuers, depended on issuing a certain

amount of variable rate bonds as part of its bond issues. This device
allows it to lower overall costs. An effect of the credit crisis has
been to make variable rate bonds initially both more expensive and
less available to issuers, primarily due to the dearth of liquidity
facility providers. These entities provide back-up for SONYMA in cases
where variable rate bonds are tendered by bondholders. As of now, the
market is practically nonexistent.

This proposal would allow the Agency to sell its loans to banks or
other entities when the Agency is unable to issue bonds, or when bonds
are not the best financing option. The mortgages would be sold at par.
A number of New York State lenders have expressed interest in
purchasing SONYMA loans for their own portfolios

Budget Implications:


Local Impact:


Effective Date:


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


                            I N  S E N A T E

                               May 1, 2014

Introduced  by Sen. YOUNG -- (at request of the New York State Homes and
  Community Renewal) -- read twice and ordered printed, and when printed
  to be committed to the Committee on Housing, Construction and Communi-
  ty Development

AN ACT to amend the public authorities law, in relation to the powers of
  the state of New York mortgage agency


  Section  1.  Subdivision  9  of section 2404 of the public authorities
law, as amended by chapter 1023 of the laws of 1971, is amended to  read
as follows:
  (9)  Subject to any agreement with bondholders or noteholders, to sell
any mortgages or other personal  property  acquired  by  the  agency  at
public  or  private  sale and at such price or prices as it shall deter-
mine[, provided, however, that a private sale shall  be  limited  to  an
agency  of the federal government, the federal national mortgage associ-
ation, or a sale of a mortgage to a bank from which  it  was  originally
purchased]. If the agency determines to sell mortgages at public sale, a
notice  of such sale shall be published at least once at least five days
prior to the date of such sale  in  a  financial  newspaper  or  journal
published in the city of New York;
  S 2. This act shall take effect immediately.

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


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