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This entry was published on 2014-09-22
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SECTION 6-A
Investment in obligations of certain persons sixty-five years of age or over incurred to satisfy real property tax indebtedness
Banking (BNK) CHAPTER 2, ARTICLE 1
§ 6-a. Investment in obligations of certain persons sixty-five years
of age or over incurred to satisfy real property tax indebtedness. 1.
Subject to such regulations and restrictions as the superintendent of
financial services finds to be necessary and proper and notwithstanding
any inconsistent provision of this chapter to the contrary, any bank,
trust company, savings bank, savings and loan association, or life
insurance company authorized to do business in this state may make loans
described in subdivision two of this section.

2. Banking institutions described in subdivision one may make loans
under this section to natural persons aged sixty-five or older subject
to the following conditions:

(a) the principal amount of the loan shall not exceed the aggregate
amount of all real property taxes, special ad valorem levies, and
special assessments paid or owing by the borrower for the current or
prior years or both with respect to real property owned individually or
jointly by such borrower which constitutes the principal residence of
such borrower; provided, however, that the loan agreement may provide
for such principal amount to be modified to include the amount of
additional real property taxes, special ad valorem levies, and special
assessments pertaining to such property as they are incurred; and

(b) such loan shall be secured by a first or second mortgage on the
property which mortgage expressly states in like or similar terms "this
mortgage is given to secure a loan made pursuant to the provisions of
section six-a of the banking law"; and

(c) the annual interest chargeable on such loan shall not exceed the
allowable interest chargeable by such lender to any other person, not
including a corporation, on an obligation secured by a first mortgage
lien; and

(d) a loan which is undertaken pursuant to this section shall not be
payable until the sale or other disposition of such property, provided
however that any borrower may discharge any indebtedness he has
undertaken pursuant to the provisions of this section at any time
without payment of any charges other than principal and interest.

3. Subject to regulations of the superintendent of financial services,
banking institutions described in subdivision one of this section which
make loans pursuant to this section may, pursuant to the loan agreement,
utilize part or all of the proceeds of such loan to make direct payment
of real property taxes, special ad valorem levies, and special
assessments on the property which secures such loan. Any such
institution which retains part or all of the proceeds of such loan for
the purpose of making direct payment of such real property taxes,
special ad valorem levies, and special assessments shall be liable to
such borrower, upon failure to pay such taxes, levies, and assessments
for the amount of such taxes, levies, and assessments plus penalties and
interest imposed thereon.

4. Every banking institution which makes direct payment of real
property taxes, special ad valorem levies, and special assessments
pursuant to subdivision three shall at least annually provide to the
borrower any paid bill it has received for the payment of such taxes,
levies, and assessments. Such bill shall be contained in a succeeding
loan statement as may be sent to such borrower. This section shall not
apply to billings for real property taxes, special ad valorem levies,
and special assessments transmitted by computer tape by a city with a
population of one million or more persons.