N.Y. ISC Law § 6503 — New York Code / Act ISC / Article 65 / Section 6503
Limitations
Status: in_force

§ 6503. Limitations. (a) Mortgage guaranty insurance may be transacted\nin this state only by a company licensed to do so and shall be written\nonly:\n  (1) to insure loans secured by authorized real estate securities; or\n  (2) to insure pools of loans secured by instruments constituting a\nfirst lien on real estate and evidenced by pass-through certificates or\nother instruments, provided no part of the premiums for such insurance\nshall be paid directly or indirectly by the mortgagors and mortgage\nguaranty insurance for such pools of loans shall not be subject to the\nprovisions of subsection (c) of this section; or\n  (3) to insure a portfolio of loans secured by instruments constituting\na junior lien on real estate.\n  (b) A mortgage insurer shall not insure exposure on loans secured by\nliens on properties in a single housing tract or a contiguous tract in\nexcess of ten percent of its policyholders surplus. In calculating such\nexposure, the applicable claim settlement option shall be applied and\napplicable reinsurance shall be deducted. "Contiguous" means not\nseparated by more than one-half mile.\n  (c) A mortgage insurer providing coverage on loans secured by a first\nlien on real estate may elect to pay the entire indebtedness to the\ninsured and acquire title to the authorized real estate security. A\nmortgage insurer providing coverage on loans secured by a junior lien on\nreal estate may elect to insure a portfolio of loans secured by\ninstruments constituting a junior lien on real estate.\n  (d) Except for loans made pursuant to the state of New York mortgage\nagency's forward commitment program as defined in title seventeen of\narticle eight of the public authorities law, a mortgagor shall not be\nrequired to pay, directly or indirectly, the cost of continuing mortgage\nguaranty insurance on a loan secured by a first lien on real estate when\nthe unpaid principal amount of the real estate loan represents\nseventy-five percent or less of the real estate's appraised value at the\ntime the loan was made or such higher percentage of such appraised value\nas may be established from time to time by general regulation of the\nsuperintendent of financial services, which shall consider:\n  (1) the cost to mortgagors and the necessity of maintaining insurance;\n  (2) the applicable mortgage insurance requirements of the Federal\nNational Mortgage Association, the Government National Mortgage\nAssociation and the Federal Home Loan Mortgage Corporation to be met as\na precondition to the sale thereto by a regulated mortgage investor; and\n  (3) the need in light of prevailing economic conditions for regulated\nmortgage investors to resell such security.\n  (e) For loans made pursuant to the state of New York mortgage agency's\nforward commitment program as defined in title seventeen of article\neight of the public authorities law, a mortgagor shall not be required\nto pay, directly or indirectly, the cost of continuing mortgage guaranty\ninsurance on a loan secured by a first lien on real estate when the\nunpaid principal amount of the real estate loan represents sixty percent\nor less of the fair market value of the real estate at the time the loan\nwas made.\n  (f) A mortgagor shall not be required to pay, directly or indirectly,\nthe cost of mortgage guaranty insurance on a loan secured by a junior\nlien on real estate when the indebtedness evidencing that loan, combined\nwith all existing mortgage loan amounts at the time the loan is made, is\nless than sixty percent of the fair market value of the real estate at\nthe time the junior loan is made.\n  (g) A mortgage insurer may not obtain a deficiency judgment against a\nborrower in the event of foreclosure.\n  (h) This article shall not limit the right of any mortgage insurer to\nimpose reasonable requirements upon the lender with regard to the terms\nof any note or bond or other evidence of indebtedness secured by a\nmortgage or deed of trust.\n