NY Pub Auth L § 2405-C (2021)
2021 New York Laws PBA - Public Authorities Article 8 - Miscellaneous Authorities Title 17 - State of New York Mortgage Agency Act Part 1 2405-C - Purchase of New Housing Loans.

* §  2405-c.  Purchase  of new housing loans. (1) The agency is hereby directed, to the extent it finds it practicable, to establish a  program whereby  it  purchases  new  housing  loans  from banks within the state during periods when there is an inadequate supply  of  credit  available for  new  residential  improvement  loans or available for such loans at carrying charges within the financial means of persons and  families  of low or 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 new housing loans  from  banks  at  such prices  and  upon  such  terms  and  conditions  as  it shall determine; provided, however, that each borrower receiving a housing loan purchased by the agency shall be a person of low or moderate income  and  provided further  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 housing loans 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 new housing loans, the agency shall not be governed or limited by the provisions of clause (i), (ii)  or  (iii)  of  paragraph  (b)  of  subdivision  three  of  section twenty-four hundred five of this title.  (4) The agency shall require as a condition of purchase of new housing loans  from banks that each such bank certify that each such new housing loan is to an individual borrower and is  in  addition  to  the  housing loans 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 new  housing  loans  purchased  by  the agency  from banks at a rate or rates which the agency from time to time shall determine to be at  least  sufficient,  together  with  any  other available monies, to provide for the payment of its bonds and notes, and new  housing  loans  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 housing loan or any subsequent sale or disposition  of  the housing loan 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 new housing loans  evidence  satisfactory to  the  agency of the making, and if applicable, the servicing, of such new housing loans 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  new  housing loans may be enforced by decree of the supreme court. The agency may require as a condition of purchase of  new housing  loans  from  any  national 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 new  housing  loans  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  new housing  loan  from  a  bank  that the bank represent and warrant to the agency that:  (a) the unpaid principal balance of the housing loan and the  interest rate thereon have been accurately stated to the agency;  (b)  the  amount  of  the  unpaid  principal balance is justly due and owing;  (c) the bank has no notice  of  the  existence  of  any  counterclaim, offset  or  defense  asserted  by  the  mortgagor  or  any  successor in interest;  (d) the housing loan is evidenced and secured in the manner  specified in  the bank's undertaking to the agency and all required loan documents have been properly recorded with any appropriate public official;  (e) the housing loan is secured  by  the  security  described  to  the agency  subject  only  to  liens,  security  interests  and encumbrances described to the agency;  (f) the borrower  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  loan 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 housing loan;  (g) the residential  family  dwelling  unit  improved,  rehabilitated, reconstructed  or  redeveloped  with the proceeds of the housing loan is 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  the  extent  specified  in  the  bank's undertaking to the agency; and  (h) the housing loan is insured or guaranteed by the United States  of America  or  any agency thereof, or by a firm which is authorized by the superintendent of financial services of the state of New York  to  issue such policies in the state.  (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 housing loan for  the  original purchase price adjusted for amounts subsequently paid thereon, as the agency shall determine.  (10) The agency need  not  require  the  recording  or  filing  of  an assignment  of any new housing loan purchased by it from a bank pursuant to this section and shall not be required to notify the borrower of  its purchase  of  the  housing  loan.  The  agency  shall not be required to inspect or take possession of the loan documents if the bank from  which the  new  housing loan is purchased by the agency shall enter a contract to service such housing loan 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 new housing loans, such restrictions upon assumability of the loan,  default provisions,  rights  to  accelerate,  and  other terms applicable to new housing loans made by banks 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  housing loan unless expressly waived in writing by or on behalf of the agency.  (12)  In  conducting  its program of purchasing new housing loans, the agency shall use its best  efforts  to  work  in  conjunction  with  and maximize  the  participation  of  programs  operated  by  not-for-profit corporations  or   charitable   organizations   for   the   improvement, rehabilitation,  reconstruction  or  redevelopment  of  one to four unit residences.   * NB Repealed July 23, 2023