NY Banking L § 595-C (2021)
2021 New York Laws BNK - Banking Article 12-D - Licensed Mortgage Bankers 595-C - Regulation of Dealings of Mortgage Brokers and Home Improvement Contractors.

§   595-c.  Regulation  of  dealings  of  mortgage  brokers  and  home   improvement contractors. 1.  No  home  improvement  contractor  nor  any   agents  or salespersons thereof shall represent, act as an agent for, or   advertise, promote or arrange for the services of a mortgage  broker  or   its  affiliate  while  soliciting home improvement contracts nor receive   anything of value from a  mortgage  broker  or  its  affiliate  for  the   referral  of  a  borrower  to  a  mortgage  broker.  The staff of a home   improvement contractor shall not act on behalf of a mortgage  broker  in   any transaction.2.  Where  a  mortgage  broker  has  solicited,  processed,  placed or   negotiated a mortgage loan, a home improvement contractor shall  not  be   paid  directly  but  instead  may receive payment from the proceeds of a   home improvement loan payable solely to the borrower or, at the election   of the borrower, through an independent  third  party  escrow  agent  in   accordance  with  the terms established in a written agreement signed by   the borrower, the lender and the contractor  prior  to  disbursement.  A   mortgage  broker  shall  not  offer  a  homeowner  different  loan terms   contingent on the homeowner executing an agreement for  payment  through   an  independent  third party as described in the preceding sentence. Any   such agreement shall contain a clear and conspicuous disclosure: YOU ARE   NOT REQUIRED TO EXECUTE THIS AGREEMENT. YOU MAY INSTEAD RECEIVE  PAYMENT   DIRECTLY. (NAME OF MORTGAGE BROKER) MAY NOT OFFER YOU DIFFERENT TERMS ON   YOUR  LOAN  TO  SIGN  THIS AGREEMENT. The provisions of this subdivision   shall not apply to a  home  improvement  loan  insured  by  the  federal   housing administration under section 203(k) of the National Housing Act,   12   U.S.C.   1709(k),   or  to  amounts  added  to  a  federal  housing   administration insured mortgage under  the  energy  efficiency  mortgage   program  originally  established  under section 106 of the Energy Policy   Act of 1992, as from time to time amended.3. A mortgage broker shall not permit a home improvement contractor to   be a cosigner or to act as a guarantor for  a  mortgage  loan  for  home   improvement.4.  For  the  purpose  of this section, "home improvement contractor",   means,  with  respect  to  any  home  improvement,  a  person,  firm  or   corporation  which  owns  or operates a home improvement business or who   undertakes,  offers  to  undertake  or  agrees  to  perform   any   home   improvement  for  a  fee  and  for  whom  the total price for all labor,   materials and other items is  equal  to  or  greater  than  two  hundred   dollars.  Home  improvement  contractor does not include a person, firm,   corporation, landlord, cooperative  corporation,  condominium  board  of   managers,  joint tenant or co-tenant that owns, in whole or in part, the   property to be improved.5. This section shall not annul, alter, affect or  exempt  any  person   subject  to the provisions of this section from complying with the laws,   ordinances, rules or regulations of any locality or  other  governmental   body,  relating to home improvement contracts, except to the extent that   such laws, ordinances, rules or regulations are  inconsistent  with  any   provision  of  this  section,  but  no  such  law,  ordinance,  rule  or   regulation shall be  considered  inconsistent,  if  it  affords  greater   protection to the homeowner from persons subject to this section.