* § 2405-b. Purchase of forward commitment mortgages. (1) A purpose of
the agency shall be to purchase forward commitment mortgages from banks
within the state during periods when there is an inadequate supply of
credit available for new residential mortgages or available for such
loans at carrying charges within the financial means of persons and
families of low and moderate income.

It is hereby found and declared that such activities by the agency
will alleviate a condition in this state which is contrary to the public
health, safety and general welfare and which has constituted in the past
and from time to time in the future can be expected to constitute a
public emergency. It is further found and declared that such purposes
are in all respects for the benefit of the people of the state of New
York and the agency shall be regarded as performing an essential
governmental function in carrying out its purposes and in exercising the
powers granted by this title.

(2) The agency shall purchase forward commitment mortgages from banks
at such prices and upon such terms and conditions as it shall determine;
provided, however, that the total purchase price, exclusive of any
amounts representing a refund of commitment or other fees paid by a bank
to the agency, for all mortgages which the agency commits to purchase
from a bank at any one time shall in no event be more than the total of
the unpaid principal balances thereof, plus accrued interest thereon.

(3) In conducting its program of purchasing forward commitment
mortgages, the agency shall be governed by the provisions of paragraph
(b) of subdivision three of section twenty-four hundred five of this
part; however, with respect to new construction loans for single-family
modular or manufactured housing purchased and sited on land, the agency
shall be governed by the provisions of only subparagraph (iii) of
paragraph (b) of subdivision three of section twenty-four hundred five
of this part.

(4) The agency shall require as a condition of purchase of forward
commitment mortgages from banks that each such bank certify that each
such forward commitment mortgage is to an individual borrower and is in
addition to the mortgages such certifying bank otherwise would have
made.

(5) Notwithstanding the maximum interest rate, if any, fixed by
section 5-501 of the general obligations law or any other law not
specifically amending or applicable to this section, the agency may set
the interest rate to be borne by forward commitment mortgages purchased
by the agency from banks at a rate or rates which the agency from time
to time shall determine, provided however, that if such mortgages are
financed through the issuance of the agency's bonds or notes, the
interest rate shall be at least sufficient, together with any other
available monies, to provide for the payment of its bonds and notes, and
forward commitment mortgages bearing such interest rate shall not be
deemed to violate any such law or to be unenforceable if originated by a
bank in good faith pursuant to an undertaking with the agency with
respect to the sale thereof notwithstanding any subsequent failure of
the agency to purchase the mortgage or any subsequent sale or
disposition of the mortgage by the agency to such bank or any other
person.

(6) The agency shall require the submission to it by each bank from
which the agency has purchased forward commitment mortgages evidence
satisfactory to the agency of the making, and if applicable, the
servicing, of such forward commitment mortgages in conformity with such
bank's undertaking with the agency and in connection therewith may,
through its employees or agents or those of the department of financial
services, inspect the books and records of any such bank.

(7) Compliance by any bank with the terms of its agreement with or
undertaking to the agency with respect to the sale, and if applicable,
the servicing, of forward commitment mortgages may be enforced by decree
of the supreme court. The agency may require as a condition of purchase
of forward commitment mortgages from any bank the consent of such bank
to the jurisdiction of the supreme court over any such proceeding. The
agency may also require agreement by any bank, as a condition of the
agency's purchase of forward commitment mortgages from such bank, to the
payment of penalties to the agency for violation by the bank of its
undertakings to the agency, and such penalties shall be recoverable at
the suit of the agency.

(8) The agency shall require as a condition of purchase of any forward
commitment mortgage from a bank that the bank represent and warrant to
the agency that:

(a) other than with respect to new construction loans for
single-family modular or manufactured housing purchased and sited on
land, the mortgage was not made in satisfaction of an obligation of the
bank under section twenty-four hundred five of this part;

(b) the unpaid principal balance of the mortgage and the interest rate
thereon have been accurately stated to the agency;

(c) the amount of the unpaid principal balance is justly due and
owing;

(d) the bank has no notice of the existence of any counterclaim,
offset or defense asserted by the mortgagor or any successor in
interest;

(e) the mortgage is evidenced by a bond or promissory note and a
mortgage document which has been properly recorded with the appropriate
public official or by an instrument which shall constitute or create a
security interest in tangible personal property constituting modular or
manufactured housing purchased by the agency;

(f) the mortgage constitutes a valid first lien, or second lien on the
real property or tangible personal property constituting modular or
manufactured housing, described to the agency in accordance with
subdivision five of section twenty-four hundred two of this part subject
only to real property taxes or other 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, tangible personal property constituting modular or
manufactured housing or improvements thereon;

(g) the mortgagor is not now in default in the payment of any
installment of principal or interest, escrow funds, real property taxes
or otherwise in the performance of his obligations under the mortgage
documents and has not to the knowledge of the bank been in default in
the performance of any such obligation for a period of longer than sixty
days during the life of the mortgage; and

(h) the improvements to, or new construction of single-family modular
or manufactured housing purchased and sited on land, the mortgaged real
property or tangible personal property constituting modular or
manufactured housing, are covered by a valid and subsisting policy of
insurance issued by a company authorized by the superintendent of
financial services to issue such policies in the state of New York and
providing fire and extended coverage to an amount not less than eighty
percent of the insurable value of the improvements to, or new
construction of, the mortgaged real property or tangible personal
property constituting modular or manufactured housing.

(9) Each bank shall be liable to the agency for any damages suffered
by the agency by reason of the untruth of any representation or the
breach of any warranty and, in the event that any representation shall
prove to be untrue when made or in the event of any breach of warranty,
the bank shall, at the option of the agency, repurchase the mortgage for
the original purchase price adjusted for amounts subsequently paid
thereon, as the agency shall determine.

(10) The agency need not require the recording of an assignment of any
forward commitment mortgage purchased by it from a bank pursuant to this
section and shall not be required to notify the mortgagor of its
purchase of the mortgage. The agency shall not be required to inspect or
take possession of the mortgage documents if the bank from which the
forward commitment mortgage is purchased by the agency shall enter a
contract to service such mortgage and account to the agency therefor.

(11) Notwithstanding any other provision of law, the agency is
authorized to require, as a condition to the purchase from banks of any
forward commitment mortgage, such restrictions upon assumability of the
mortgage, default provisions, rights to accelerate, and other terms
applicable to such forward commitment mortgages made by the bank
pursuant to undertakings with the agency with respect to the sale
thereof as the agency may determine to be necessary or desirable to
assure the repayment of its bonds and notes and the exemption from
federal income taxes of the interest payable on its bonds and notes.
All such terms shall be enforceable by the originating bank, the agency,
and any successor holder of the mortgage unless expressly waived in
writing by or on behalf of the agency.

* NB Repealed July 23, 2025