2023 New York Laws › BNK - Banking › Article 1 - Short Title; Definitions; Miscellaneous Provisions. › 5 - Loans Pursuant to the "Servicemen's Readjustment Act of 1944."

§ 5. Loans pursuant to the "Servicemen's Readjustment Act of 1944." 1.
Subject  to  such  regulations and restrictions as the superintendent of
financial services finds to be necessary and proper,  (i)  any  loan  at
least  twenty  per centum of which is guaranteed under title three of an
act of congress entitled the "Servicemen's Readjustment  Act  of  1944,"
may  be made or invested in by any banking organization having the power
to make loans, and the savings and loan bank of the state of  New  York,
and  (ii)  any  bank  or  trust  company  may  make any loan made on the
security of a loan or loans eligible under  the  preceding  subparagraph
(i), without regard to the limitations and restrictions of this chapter;
provided however, that
(a)  No  such  loan  upon the security of real estate shall be made or
invested in if the amount of such loan exceeds the  appraised  value  of
such  real  estate,  as improved or to be improved by the application of
the proceeds of such loan, or if the amount of such loan, when added  to
the amount unpaid upon prior mortgages, liens and encumbrances upon such
real estate, exceeds such appraised value. Such appraised value shall be
determined by an appraiser appointed pursuant to policies established by
the  board  of  directors  or  trustees  of  the  corporation  making or
investing in such loan, or, in the case of a private  banker,  shall  be
determined  by  the private banker or by an appraiser appointed pursuant
to policies established by such private banker;
(b) Each such loan, if secured by real property, shall be  subject  to
the  provisions  of  this chapter relating to the recording of mortgages
and assignments of mortgages upon real property;
(bb) The requirements of the foregoing paragraphs (a)  and  (b)  shall
not apply when not less than ten such mortgages are assigned as security
for  a  loan  made under paragraph (ii), providing the term of such loan
does not exceed twelve months;
(c) Each such loan shall be subject to the provisions of this  chapter
prescribing the maximum limits, in amount, of (1) loans in the aggregate
to,  or  upon  the net liability of, any one individual and (2) loans in
the aggregate secured by real property;
(d) Each such loan made or invested in by a savings  bank,  a  savings
and  loan  association, or the savings and loan bank of the state of New
York shall be subject to the following additional provisions: (1) a loan
pursuant to section five hundred one, five hundred two or  five  hundred
three of the "Servicemen's Readjustment Act of 1944," for the purpose of
repairing,  altering  or  improving  a building or buildings, and a loan
pursuant to section five hundred five (a)  of  such  act,  need  not  be
secured by a lien on real property, but all other loans pursuant to such
act  must  be  secured  by a first lien on such property; and (2) in the
case of each loan for the acquisition or benefit of, or secured by, real
property, such real property must, if located without the state  of  New
York,  be  located,  in  the  case of a savings bank, within twenty-five
miles of the principal office of such savings bank; in  the  case  of  a
savings and loan association, within fifty miles of the principal office
of  such  association;  and, in the case of the savings and loan bank of
the state of New York, within fifty miles of  the  principal  office  of
such  bank or the principal office of one of its member savings and loan
associations; except that, if the amount  of  a  loan  secured  by  real
property,   after  deducting  therefrom  the  amount  thereof  which  is
guaranteed pursuant to such act, is  in  excess  of  two-thirds  of  the
appraised  value of such real property, as determined in accordance with
paragraph (a) of this subdivision, such real property  must  be  located
within  the  state  of  New York and, in the case of a savings bank or a
savings and loan association, within one hundred miles of the  principal
office  of  any  such  corporation which makes, and any such corporation

which invests in, such loan; and except that, in  the  case  of  a  loan
pursuant to section five hundred five (a) of such act, the real property
for the acquisition or benefit of which such loan is made may be located
within  the  applicable  and prescribed limits of this chapter as to the
location of real property securing a loan insured by the federal housing
commissioner.
(e) The authority provided in this subdivision to invest in  any  loan
secured  by  real  property guaranteed pursuant to the provisions of the
act of congress entitled the "Servicemen's Readjustment  Act  of  1944",
shall  include authority to acquire title to real property in connection
with investing in an installment contract for the sale of real property,
so guaranteed, where the purchaser under such contract is in  possession
and  control  of  the  property,  and  title  is acquired by the banking
organization solely as security for the obligations of the purchaser.
2. In complying with the provisions of this  chapter  which  prescribe
the maximum limits, in amount, of loans in the aggregate to, or upon the
net liability of, any one individual, and loans in the aggregate secured
by real property, a banking organization or the savings and loan bank of
the state of New York may deduct from the total amount of each loan made
or  invested  in  by  it  that  portion of such loan which is guaranteed
pursuant to the "Servicemen's Readjustment Act of  1944",  and,  in  the
case  of  each loan made or invested in by it which is secured by a loan
which is guaranteed pursuant to said act, may deduct that portion  which
is equal to the portion of such security which is so guaranteed.
3.  The  foregoing provisions of this section shall not apply to loans
insured pursuant to section five  hundred  eight  of  the  "Servicemen's
Readjustment  Act of 1944," but the superintendent of financial services
shall have power to authorize banking organizations and the savings  and
loan bank of the state of New York to make and invest in such loans upon
such  terms  and  conditions as it shall prescribe. Nothing contained in
this section shall prevent loans guaranteed or insured pursuant  to  the
"Servicemen's  Readjustment  Act of 1944" from being made or invested in
under, and  subject  to  the  limitations  and  restrictions  of,  other
provisions of this chapter.