2023 New York Laws › RPT - Real Property Tax › Article 9 - Levy and Collection of Taxes › Title 3-A - Real Property Tax Escrow Accounts › 953 - Duties and Responsibilities of Mortgage Investing Institutions.

§ 953. Duties and responsibilities of mortgage investing institutions.
1.  Every  mortgage  investing  institution  shall make all payments for
taxes for which they hold real property tax escrow accounts, in a timely
manner.
2. Every mortgage investing institution subject to the  provisions  of
section  fourteen-b  of  the  banking law shall pay at least the minimum
rate of interest on each real property tax escrow account as  prescribed
therein except that any such mortgage investing institution shall not be
required  to  pay  such  minimum  rate  of interest on real property tax
escrow accounts established for non-mortgagors.
3. Every mortgage investing institution shall  deposit  funds  from  a
real property tax escrow account of a mortgagor in a banking institution
whose deposits are insured by a federal agency or a licensed branch of a
foreign  banking  corporation  whose  deposits  are insured by a federal
agency. Notwithstanding the foregoing provisions  of  this  subdivision,
the  superintendent of financial services shall have the power to exempt
from the requirements of this subdivision any banking organization which
does not receive deposits or share accounts from the general public.
4. No mortgage investing institution shall impose a service charge  or
any  other fee in connection with the maintenance of a real property tax
escrow account nor, as provided in section two hundred  fifty-four-d  of
the real property law, shall a fee be imposed for direct payment of real
property taxes.
5.  A  mortgage  investing  institution  may  debit a mortgagor's real
property tax escrow account for payments of taxes only if actual payment
for such taxes is made within twenty-one days after such debit.
6. Every mortgage investing institution shall, at least  annually  and
without charge to the mortgagor, provide to the mortgagor an analysis of
the  real  property  tax  escrow account of the mortgagor. Such analysis
shall contain, for the twelve month period covered by the  analysis,  at
least:  (i) interest earned; (ii) the amount of taxes paid from the real
property tax escrow account; and (iii) the account  balance  as  of  the
beginning  of  the  period  the  analysis  covers and the ending account
balance as of a specified date within forty-five days preceding the date
of the analysis. In addition, the mortgage investing institution  shall,
upon  request  by the mortgagor, provide to the mortgagor without charge
the date or dates of the payment of taxes from such  real  property  tax
escrow  account.  The  information  required  by this subdivision may be
provided  in  notices  otherwise  required  by  federal  or  state  law,
regulation  or  rule  to  be  sent  on  at  least an annual basis to the
mortgagor. The analysis shall also contain the following information  in
at  least  eight  point  bold  face  type in substantially the following
language:
(a) that the mortgage investing institution is obligated to  make  all
payments  for  taxes  for  which the real property tax escrow account is
maintained and that if any such payments are not  timely,  the  mortgage
investing  institution is responsible for making such payments including
any penalties and interest;
(b) that the mortgagor is obligated to pay one-twelfth  of  the  taxes
each month to the mortgage investing institution which is deposited into
the  real  property  tax escrow account, unless there is a deficiency or
surplus in the account, in which case a greater or lesser amount may  be
required;
(c) if the mortgage investing institution is subject to the provisions
of  subdivision  three  of  this  section,  that  the mortgage investing
institution must deposit the escrow payments made by the mortgagor in  a
banking   institution   or  a  licensed  branch  of  a  foreign  banking
corporation whose deposits are insured by a federal agency; and
(d) that the mortgage investing institution  cannot  impose  any  fees
relating to the maintenance of the real property tax escrow account.
6-a.  Every mortgage investing institution shall upon the request of a
borrower who has been notified of the granting of an exemption  pursuant
to  section  four  hundred  twenty-five  of  this  chapter to review the
expected real property tax  liability  which  is  assessable  against  a
property  which  is a one, two or three family dwelling and which is the
primary residence of the borrower. In any case, where as the  result  of
the granting of such exemption an overage in the escrow shall exist, the
owner  shall be entitled to a proportionate reduction in the amount such
mortgage investing institution is authorized to collect and deposit on a
monthly basis into an escrow account  to  insure  the  payment  of  real
property  taxes.  This  review shall be considered maintenance of a real
property tax escrow account.
7. Every mortgage investing institution shall provide  written  notice
to  a  mortgagor  no  later than ten business days after the transfer to
another mortgage investing institution  of  the  right  to  receive  all
payments  from  the  mortgagor,  including  payments  made into the real
property tax escrow  account,  which  notice  shall  include  the  name,
address  and  telephone  number of the mortgage investing institution to
which such rights have been transferred. Upon request by the  mortgagor,
the  mortgage  investing  institution  shall advise the mortgagor of the
amount of money in such account as of the date of such  transfer.  Every
mortgage  investing  institution  shall  remain  fully liable to pay any
taxes which are due and payable prior to the date of such transfer,  and
the  mortgage  investing  institution  to  which  such  rights have been
transferred shall be liable to pay any taxes which are due  and  payable
after  the  date  of  such  transfer,  unless otherwise agreed among the
parties to the transfer.
8.  Every  mortgage  investing  institution  shall,  no   later   than
twenty-one  days after the final payment of the mortgage loan, where the
mortgagor retains ownership of the property, send  to  the  mortgagor  a
written  statement  that  shall  include,  but  not  be  limited  to the
following information: (a) that the real property tax escrow account has
been or will be terminated  (whichever  is  applicable);  and  (b)  that
unless  the mortgagor establishes a new real property tax escrow account
with a mortgage investing institution, the mortgagor will be obliged  to
pay   to   the   appropriate  collecting  officers  taxes  becoming  due
thereafter. The written notice shall also set forth the  effective  date
of  the  termination  and  shall provide the name, address and telephone
number of each collecting officer or office and advise the mortgagor  to
contact such officer or office for tax billing information.
8-a. Any mortgage investing institution which does not comply with the
provisions  of  subdivision  eight  of this section shall be financially
responsible for interest or penalties charged a former mortgagor of such
institution by a taxing  municipality,  county,  and/or  delinquent  tax
enforcement  agency  for  non-payment  or  late payment of real property
taxes in the first taxable year following satisfaction of  the  mortgage
held by such institution.
9.  Every  mortgage  investing  institution  shall,  no later than the
twenty-fifth day of each month, report to the county  director  of  real
property  tax  services,  or  the  commissioner  of finance for property
located in the city of New York, on a form prescribed or approved by the
commissioner, the creation of a real property tax escrow account, or any
change of a tax billing address required by a transfer or termination of
a real property tax escrow account pursuant to  subdivisions  seven  and
eight  of this section, occurring during the prior month with respect to
real property located in such county or city, as the case  may  be.  The

county  director  or the commissioner of finance of the city of New York
shall thereupon furnish a copy of such report to the person  or  persons
having  custody and control of the appropriate assessment roll, tax roll
or  data  file, as defined in section fifteen hundred eighty-one of this
chapter, and such person or persons are hereby authorized  and  directed
upon receipt of such report to enter the appropriate tax billing address
on such assessment roll, tax roll or data file.