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

* § 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;  (f)  the mortgage constitutes a valid first lien or second lien on the real property described to the agency  in  accordance  with  subdivision five  of  section  twenty-four  hundred two of this part subject only to real property 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  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  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.  (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, 2023