NY Banking L § 590-A (2021)
2021 New York Laws BNK - Banking Article 12-D - Licensed Mortgage Bankers 590-A - Junior Mortgage Loans.

§ 590-a.  Junior  mortgage  loans.  1. A licensee may make a loan to a   natural person upon the security  of  a  mortgage  on  residential  real   property which is not a first lien at the rate or rates agreed to by the   licensee   and   the  borrower,  subject  to  such  regulations  as  the   superintendent of financial services may prescribe. Such regulations  by   the  superintendent  of financial services may include such restrictions   as the superintendent of financial services finds necessary  or  proper.   For  purposes of this section, the term mortgage shall include a lien on   an existing  ownership  interest  in  certificates  of  stock  or  other   evidence  of  an  ownership interest in, and a proprietary lease from, a   corporation or partnership formed for the  purpose  of  the  cooperative   ownership of residential real estate.2.  A  contract,  note  or  instrument evidencing or securing a junior   mortgage loan shall not contain  any  acceleration  clause  which  would   provide  that  the  junior mortgage loan may be declared due and payable   upon the condition that the licensee deems itself insecure with  respect   to  the  unpaid  balance of such junior mortgage loan; shall not contain   clauses which authorize confession of judgment; shall allow the borrower   to prepay the loan in whole  or  in  part  without  penalty,  and  shall   contain the following notice in bold face type, at least ten point size:"DEFAULT  IN  THE  PAYMENT  OF THIS LOAN AGREEMENT MAY RESULT IN THE   LOSS OF THE PROPERTY SECURING THE LOAN. UNDER FEDERAL LAW, YOU MAY  HAVE   THE RIGHT TO CANCEL THIS AGREEMENT. IF YOU HAVE THIS RIGHT, THE CREDITOR   IS REQUIRED TO PROVIDE YOU WITH A SEPARATE WRITTEN NOTICE SPECIFYING THE   CIRCUMSTANCES AND TIMES UNDER WHICH YOU CAN EXERCISE THIS RIGHT."3.  Where  the  contract,  note or instrument evidencing or securing a   junior mortgage loan provides for a variable rate of interest, said rate   shall be based on a published index that is (a) readily  available,  (b)   independently  verifiable,  (c)  beyond the control of the licensee, and   (d) approved by the superintendent. The  interest  rate  of  the  junior   mortgage  loan  shall  be  reduced  in proportion to any decrease in the   index rate. Increases in the interest rate may be made at the option  of   the licensee.4.  The  superintendent of financial services shall adopt regulations,   including but not limited  to:  (a)  providing  for  disclosure  to  the   borrower  by  the licensee of the circumstances under which the rate may   increase, any limitations on the increase, the effect of an increase and   an example of the payment terms that would result from an increase,  (b)   providing for disclosure to the borrower by the licensee of a history of   the  fluctuations of the index over a reasonable period of time, and (c)   providing for notice to the borrower  from  the  licensee  of  any  rate   increase or change in the terms of payment.5.  A line of credit secured by a junior mortgage shall be established   in an amount of no less than twenty-five hundred dollars; and  shall  be   repayable in monthly installments.