2023 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  or by an instrument which shall constitute or create a
security interest in tangible personal property constituting modular  or
manufactured housing purchased by the agency;
(f) the mortgage constitutes a valid first lien, or second lien on the
real  property  or  tangible  personal  property constituting modular or
manufactured  housing,  described  to  the  agency  in  accordance  with
subdivision five of section twenty-four hundred two of this part subject
only  to real property taxes or other 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,  tangible  personal  property  constituting  modular  or
manufactured housing 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   or   tangible   personal  property  constituting  modular  or
manufactured housing, 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  or  tangible personal
property constituting modular or manufactured housing.
(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, 2025