S T A T E O F N E W Y O R K
________________________________________________________________________
1669
2019-2020 Regular Sessions
I N A S S E M B L Y
January 16, 2019
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Introduced by M. of A. HAWLEY -- read once and referred to the Committee
on Judiciary
AN ACT to amend the real property law, in relation to prohibiting mort-
gagees from requiring mortgagors of certain real property to purchase
flood insurance exceeding the amount required by federal law
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. The real property law is amended by adding a new section
283 to read as follows:
§ 283. LIMITS TO COMPULSORY FLOOD INSURANCE. 1. NO MORTGAGEE SHALL
REQUIRE A MORTGAGOR TO WHOM THE MORTGAGEE MAKES, INCREASES, EXTENDS, OR
RENEWS ANY LOAN SECURED BY IMPROVED REAL PROPERTY OR A MOBILE HOME
LOCATED OR TO BE LOCATED IN AN AREA THAT HAS BEEN IDENTIFIED BY THE
DIRECTOR OF THE FEDERAL EMERGENCY MANAGEMENT AGENCY AS AN AREA HAVING
SPECIAL FLOOD HAZARDS AND IN WHICH FLOOD INSURANCE HAS BEEN MADE AVAIL-
ABLE UNDER THE NATIONAL FLOOD INSURANCE ACT TO PURCHASE MORE COVERAGE
THAN THE MINIMUM AMOUNT OF COVERAGE REQUIRED BY THE NATIONAL FLOOD
INSURANCE ACT, THAT IS, AN AMOUNT EQUAL TO THE OUTSTANDING PRINCIPAL
BALANCE OF THE LOAN OR THE MAXIMUM LIMIT OF COVERAGE MADE AVAILABLE
UNDER THE NATIONAL FLOOD INSURANCE ACT, WHICHEVER IS LESS.
2. NO MORTGAGEE SHALL DENY A LOAN TO A MORTGAGOR OR PROSPECTIVE MORT-
GAGOR OF ANY LOAN SECURED BY IMPROVED REAL PROPERTY OR A MOBILE HOME
LOCATED OR TO BE LOCATED IN AN AREA THAT HAS BEEN IDENTIFIED BY THE
DIRECTOR OF THE FEDERAL EMERGENCY MANAGEMENT AGENCY AS AN AREA HAVING
SPECIAL FLOOD HAZARDS AND IN WHICH FLOOD INSURANCE HAS BEEN MADE AVAIL-
ABLE UNDER THE NATIONAL FLOOD INSURANCE ACT, ON THE BASIS THAT THE MORT-
GAGOR DECLINES TO PURCHASE FLOOD INSURANCE COVERAGE IN EXCESS OF AN
AMOUNT EQUAL TO THE OUTSTANDING PRINCIPAL BALANCE OF THE LOAN OR THE
MAXIMUM LIMIT OF COVERAGE MADE AVAILABLE UNDER THE NATIONAL FLOOD INSUR-
ANCE ACT, WHICHEVER IS LESS.
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD02104-01-9
A. 1669 2
3. ANY MORTGAGEE FOUND TO HAVE REQUIRED A MORTGAGOR TO PURCHASE FLOOD
INSURANCE IN EXCESS OF AN AMOUNT EQUAL TO THE OUTSTANDING PRINCIPAL
BALANCE OF THE LOAN OR THE MAXIMUM LIMIT OF COVERAGE MADE AVAILABLE
UNDER THE NATIONAL FLOOD INSURANCE ACT, WHICHEVER IS LESS, SHALL BE
PENALIZED BY A FINE NOT TO EXCEED TEN THOUSAND DOLLARS FOR THE FIRST
VIOLATION, AND NOT TO EXCEED TWENTY THOUSAND DOLLARS FOR ANY SUBSEQUENT
VIOLATION.
4. ANY MORTGAGEE FOUND TO HAVE DENIED A PROSPECTIVE MORTGAGOR A LOAN
SECURED BY IMPROVED REAL PROPERTY OR A MOBILE HOME ON THE BASIS OF THE
MORTGAGOR'S FAILURE TO PURCHASE FLOOD INSURANCE IN EXCESS OF AN AMOUNT
EQUAL TO THE OUTSTANDING PRINCIPAL BALANCE OF THE LOAN OR THE MAXIMUM
LIMIT OF COVERAGE MADE AVAILABLE UNDER THE NATIONAL FLOOD INSURANCE ACT,
WHICHEVER IS LESS, SHALL BE PENALIZED BY A FINE NOT TO EXCEED TEN THOU-
SAND DOLLARS FOR THE FIRST VIOLATION, AND NOT TO EXCEED TWENTY THOUSAND
DOLLARS FOR ANY SUBSEQUENT VIOLATION.
§ 2. This act shall take effect immediately.