2023 New York Laws › RPP - Real Property › Article 8 - Conveyances and Mortgages › 265-A - Home Equity Theft Prevention.

§  265-a.  Home  equity theft prevention. 1. (a) The legislature finds
and declares that homeowners who are in default on their mortgages or in
foreclosure may be vulnerable to fraud, deception, and unfair dealing by
home equity purchasers. The  recent  rapid  escalation  of  home  values
throughout  urban and rural areas has resulted in a significant increase
in home equity, which constitutes the greatest financial asset  held  by
many  homeowners  of  this  state.  During  the  time period between the
default on  the  mortgage  and  the  scheduled  foreclosure  sale  date,
homeowners   in   financial  distress,  especially  poor,  elderly,  and
financially unsophisticated homeowners,  are  vulnerable  to  aggressive
"equity  purchasers"  who  induce  homeowners  to sell their homes for a
small fraction of their fair market values, or in some cases  even  sign
away  their  homes,  through the use of schemes which often involve oral
and  written  misrepresentations,  deceit,   intimidation,   and   other
unreasonable commercial practices.
(b)  The  legislature  declares  that  it is the express policy of the
state to preserve and guard the precious asset of home equity,  and  the
social as well as the economic value of homeownership.
(c)  The  legislature  further finds that equity purchasers may have a
significant impact upon the economy and well-being of this state and its
local communities, and therefore the  provisions  of  this  section  are
necessary to promote the public welfare.
(d) The intent and purposes of this section are to provide a homeowner
with  information necessary to make an informed and intelligent decision
regarding the sale  or  transfer  of  his  or  her  home  to  an  equity
purchaser;  to require that the sales agreement be expressed in writing;
to safeguard equity sellers against deceit and  financial  hardship;  to
ensure,  foster  and  encourage fair dealing in the sale and purchase of
homes in foreclosure or default; to prohibit representations  that  tend
to  mislead; to prohibit or restrict unfair contract terms; to provide a
cooling off period for equity sellers who enter into covered  contracts;
to  afford  equity  sellers  a  reasonable and meaningful opportunity to
rescind sales to equity purchasers; and to  preserve  and  protect  home
equity for the homeowners of this state.
2. The following definitions shall apply to this section:
(a)  "Bona  fide  purchaser  or  encumbrancer  for value" means anyone
acting in good faith who purchases the residential  real  property  from
the  equity  purchaser for valuable consideration or provides the equity
purchaser with a mortgage or provides a subsequent bona  fide  purchaser
with  a  mortgage,  provided  that he or she had no notice of the equity
seller's continuing right to, or equity in, the property  prior  to  the
acquisition of title or encumbrance, or of any violation of this section
by the equity purchaser as related to the subject property.
(b)  "Business day" means any calendar day except Sunday or the public
holidays as set forth in section twenty-four of the general construction
law.
(c) "Covered contract" means any contract, agreement, or  arrangement,
or  any  term  thereof,  between  an  equity purchaser and equity seller
which:
(i) is incident to the sale of a residence in foreclosure; or
(ii) is incident to the sale of a residence in foreclosure or  default
where  such  contract,  agreement or arrangement includes a reconveyance
arrangement; or
(iii) is incident to the sale of a residence that  is  the  collateral
for  a "distressed home loan" as defined in paragraph (d) of subdivision
one of section two hundred sixty-five-b of this article.
For purposes of this  section,  any  reference  to  the  "sale"  of  a
residence  by  an  equity  seller to an equity purchaser shall include a

transaction where an  equity  seller  receives  consideration  from  the
equity purchaser, and a transaction involving a transfer of title to the
equity  purchaser  where  no  consideration  is  provided  to the equity
seller.
(d)  "Default"  means  that  the  equity  seller is two months or more
behind in his or her mortgage payments.
(e) "Equity purchaser" means any person who or entity  which  acquires
title  to any residence in foreclosure or, where applicable, default, or
the  representative  of  such  person  or  entity  as  defined  in  this
subdivision, except a person who acquires such title as follows:
(i)  to  use,  and  who  uses,  such  property  as  his or her primary
residence;
(ii) by a deed from a referee in a foreclosure sale conducted pursuant
to article thirteen of the real property actions and proceedings law;
(iii) at any sale of property authorized by statute;
(iv) by order or judgment of any court;
(v) from a spouse, or from a parent, grandparent, child, grandchild or
sibling of such person or such person's spouse;
(vi) as a not-for-profit housing organization or as a  public  housing
agency; or
(vii) a bona fide purchaser or encumbrancer for value.
(f)  "Equity seller" means a natural person who is a property owner or
homeowner at the time of the equity sale.
(g) "Foreclosure" means that there is an  active  notice  of  pendency
filed in court pursuant to article thirteen of the real property actions
and  proceedings law, or a foreclosure action pursuant to article eleven
or thirteen of the real property actions and proceedings  law  has  been
commenced  against  the  subject  property,  or  an  action to enforce a
mortgage note has been commenced against the borrower whose property  is
secured  by  a  mortgage  loan,  or the subject property is on an active
property tax or utility lien sale list.
(h) "Property owner" or "homeowner" means  any  or  all  record  title
owners  of  the  residential  real  property  in  foreclosure  or, where
applicable, default at the time of the equity sale.
(i) "Reconveyance arrangement" means:
(i) the transfer of title to residential real property  by  an  equity
seller  who is in default or foreclosure, either by transfer of interest
from an equity seller to  an  equity  purchaser  or  by  creation  of  a
mortgage  or  other  lien  or  encumbrance during the time of default or
foreclosure  that  allows  the  equity  purchaser  to  obtain  legal  or
equitable title to all or part of the property, and
(ii) the subsequent conveyance, or promise of a subsequent conveyance,
of  an  interest  back to the equity seller by the equity purchaser that
allows the equity seller to regain possession  of  the  property,  which
interest  shall  include  but  not  be  limited to a purchase agreement,
option to purchase, or lease.
(j) "Representative" means  a  person  who  in  any  manner  solicits,
induces,  arranges,  or  causes  any  equity seller to transfer title or
solicits any member of the equity seller's family or household to induce
or cause any equity  seller  to  transfer  title  to  the  residence  in
foreclosure or, where applicable, default to the equity purchaser.
(k) "Residence" and "residential real property" means residential real
property  consisting of one- to four-family dwelling units, one of which
the equity seller occupies or occupied at a time  immediately  prior  to
the equity sale as his or her primary residence.
3.  Every covered contract and notice of cancellation attached thereto
shall be written in letters of a size equal  to  at  least  twelve-point
bold  type,  in English or in both English and Spanish if Spanish is the

primary language of the equity seller, and shall be fully completed  and
signed  and  dated  by  the  equity  seller  and  equity  purchaser. Any
instrument of conveyance shall become effective no sooner than  midnight
of  the  fifth business day after the date on which the covered contract
is executed.
4. All covered contracts shall contain the  entire  agreement  of  the
parties and shall include, but not be limited to, the following terms:
(a) The name, business address, and the telephone number of the equity
purchaser;
(b)  The address of the residence in foreclosure or, where applicable,
default;
(c) The total consideration to be given by  the  equity  purchaser  in
connection with or incident to the sale;
(d)   A  complete  description  of  the  terms  of  payment  or  other
consideration including, but not limited to, any services of any  nature
which  the  equity  purchaser  represents he or she will perform for the
equity seller before or after the sale;
(e) The time, if any, at which physical possession of the residence is
to be transferred to the equity purchaser and the residence  vacated  by
the equity seller;
(f) The terms of any rental or lease agreement;
(g) The terms of any reconveyance arrangement;
(h)  A  notice  of  cancellation  as  provided  in  paragraph  (a)  of
subdivision six of this section; and
(i) The following notice shall appear on  the  contract  in  immediate
proximity  to  the  space reserved for the equity seller's signature and
shall be in at least fourteen-point bold type if the covered contract is
printed or in capital letters if the  covered  contract  is  typed.  The
notice  must  contain  the name of the equity purchaser and the date and
time by which the covered contract must be cancelled. The  notice  shall
be completed by the equity purchaser:
"NOTICE REQUIRED BY NEW YORK LAW
You   may   cancel   this  contract  at  any  time  before  midnight  of
________________________________________.
(Date)
________________________________________________________________________
Name of Equity Purchaser)
or anyone working for ____________________________ CANNOT ask you to                     Name of Equity Purchaser)
sign or have you sign any deed or any other document until your right to
cancel this contract has ended.   See attached  notice  of  cancellation
form  for  an  explanation  of  this right. You should always consult an
attorney or community organization before signing  any  legal  documents
concerning  your  home. It is advisable that you find your own attorney,
and not consult with an attorney who has been provided  to  you  by  the
purchaser.  The  law  requires  that  this  contract  contain the entire
agreement. You should not rely upon any other written or oral  agreement
or promise."
The  equity  purchaser  shall  accurately  enter the date on which the
right to cancel ends. The covered  contract  required  by  this  section
shall  survive delivery of any instrument of conveyance of the residence
in foreclosure or, where applicable, default, and shall have  no  effect
on persons other than the parties to the covered contract.
5. (a) In addition to the right of rescission described in subdivision
eight  of  this  section,  the equity seller has the right to cancel any
covered  contract  with  an  equity  purchaser  until  midnight  of  the
fourteenth business day following the day on which the equity seller and

equity  purchaser  sign  a  covered  contract  that  complies  with this
section.
(b) Cancellation occurs when the equity seller, or a representative of
the equity seller, personally delivers written notice of cancellation to
the  address  specified  in  the  covered contract or sends a letter via
facsimile or other means of written communication, United  States  mail,
or through an established commercial letter delivery service, indicating
cancellation  to  the business address of the equity purchaser listed on
the covered contract. Proof of facsimile delivery or  proof  of  mailing
creates   a  presumption  that  the  notice  of  cancellation  has  been
delivered.
(c) A notice of cancellation given by the equity  seller  pursuant  to
paragraph  (a)  of this subdivision need not take the particular form as
provided with the covered contract and, however expressed, is  effective
if  it  indicates  the intention of the equity seller not to be bound by
the covered contract.
(d) Within ten days following receipt  of  a  notice  of  cancellation
given  in  accordance  with this subdivision, the equity purchaser shall
return without condition any original covered  contract  and  any  other
documents  signed  by  the  equity  seller  as  well as any fee or other
consideration received by the equity purchaser from the  equity  seller.
Cancellation  of  the  contract  shall  release the equity seller of all
obligations to pay fees to the equity purchaser.
6. (a) The covered contract shall be accompanied by a  form  completed
by the equity purchaser in duplicate, captioned "notice of cancellation"
in at least twelve-point bold type if the covered contract is printed or
in  capital letters if the covered contract is typed. This form shall be
attached to the covered contract, shall be easily detachable, and  shall
contain  in  type  of  at  least twelve-point if the covered contract is
printed or in capital letters if the  covered  contract  is  typed,  the
following  statement written in the same language as used in the covered
contract:
"NOTICE OF CANCELLATION
 This contract was entered into on ____________________________________
Enter date covered contract signed)
You may cancel this contract for the sale of  your  house,  without  any
penalty    or    obligation,    at   any   time   before   midnight   of
___________________________. (Enter date)
To cancel this transaction, personally deliver a signed and  dated  copy
of  this  cancellation  notice,  or  send it by facsimile, United States
mail, or an established commercial letter delivery  service,  indicating
cancellation to ____________________________________________________, at
(Name of purchaser) ___________________________________
(Street address of purchaser's place of business and facsimile number if
any) NOT LATER THAN midnight of _______________________________________.                                  Enter date)
If  you  wish  to  cancel  this  contract, sign and date both copies and
return one copy immediately to the purchaser.
I hereby cancel this transaction.
__________________________________/_______________________________"Seller's signature)
(Date)
(b) The equity purchaser shall provide each  equity  seller  with  two
copies  of the covered contract and attached notice of cancellation. The
equity purchaser shall accurately enter the date on which the  right  to
cancel ends.
7.  (a)  Before midnight of the fourteenth business day after the date
on which the covered contract is executed, the  equity  purchaser  shall
not do any of the following:
(i)  accept  from  any  equity  seller  an execution of, or induce any
equity seller to execute, any instrument of conveyance of  any  interest
in the residence in foreclosure or, where applicable, default;
(ii)  record  with  the  county clerk any document, including, but not
limited to, any instrument of conveyance, signed by the equity seller;
(iii) transfer or encumber or purport  to  transfer  or  encumber  any
interest  in  the residence in foreclosure or, where applicable, default
to any third party;
(iv) pay the equity seller any consideration; or
(v) suggest, encourage, or provide any form which  allows  the  equity
seller  to  waive  his  or  her  right  to  cancel or rescind under this
section.
(b) An equity purchaser shall make no false  or  misleading  statement
regarding   the   value  of  the  residence  in  foreclosure  or,  where
applicable, default; the amount  of  proceeds  the  equity  seller  will
receive after a foreclosure sale; the timing of the judicial foreclosure
process;  any  contract  term; the equity seller's rights or obligations
incident to or arising out of the sale transaction; the  nature  of  any
document  which  the equity purchaser induces the equity seller to sign;
or any other false or misleading statement concerning the  sale  of  the
residence  in  foreclosure  or, where applicable, default, or concerning
the reconveyance arrangement.
(c) An equity purchaser is prohibited from representing,  directly  or
indirectly, that:
(i)  the  equity purchaser is acting as an advisor or a consultant, or
in any other manner represents that the equity purchaser  is  acting  on
behalf of the equity seller;
(ii)  the  equity  purchaser  has  certification or licensure that the
equity purchaser does not have, or that the equity purchaser  is  not  a
member of a licensed profession if he or she is actually such a member;
(iii)  the equity purchaser is assisting the equity seller to save the
house unless the equity  purchaser  has  a  good  faith  basis  for  the
representation; or
(iv) the equity purchaser is assisting the equity seller in preventing
a  completed  foreclosure  unless  the equity purchaser has a good faith
basis for the representation.
(d) It is unlawful for any equity purchaser to initiate,  enter  into,
negotiate, or consummate any covered contract involving residential real
property  in  foreclosure  or,  where applicable, default if such equity
purchaser, by the terms of such covered contract, takes undue  advantage
of the equity seller.
8.   (a)  Any  transaction  involving  residential  real  property  in
foreclosure or, where applicable, default which is in material violation
of subdivision three, four, six, seven or  eleven  of  this  section  is
voidable  and  the  transaction  may  be  rescinded by the equity seller
within two years of the date of the recording of the conveyance  of  the
residential real property in foreclosure or, where applicable, default.
(b)  Such rescission shall be effected by giving written notice to the
equity purchaser and his or her successor in interest, if the  successor
is  not  a bona fide purchaser or encumbrancer for value as set forth in
paragraph (c) of this subdivision, and by recording such notice with the
county clerk of the county in which the property is located, within  two
years  of  the  date  of  the  recording of the conveyance to the equity
purchaser. The notice of rescission shall contain the name of the equity
seller and the name of the equity purchaser in addition to any successor
in interest holding record title to the residential  real  property  and
shall  particularly  describe such residential real property. The equity
purchaser and his or her successor in interest if the successor is not a

bona fide purchaser or encumbrancer for value as set forth in  paragraph
(c)  of  this  subdivision, shall have twenty days after the delivery of
the notice in which to reconvey title to the property free and clear  of
encumbrances  created  subsequent to the rescinded transaction and which
are due to the actions of the equity purchaser. As a  condition  of  the
reconveyance  of  title,  the  equity  seller shall return to the equity
purchaser any consideration received from the equity purchaser  as  part
of  the original transaction. Upon failure to reconvey title within such
time, the equity seller may bring an action to  enforce  the  rescission
and for cancellation of the covered contract and deed.
(c)  The  provisions of this subdivision shall not affect the interest
of a bona fide purchaser or encumbrancer for value if such  purchase  or
encumbrance  occurred prior to the recording of the notice of rescission
pursuant to paragraph  (b)  of  this  subdivision.  Knowledge  that  the
property   was  residential  real  property  in  foreclosure  or,  where
applicable, default shall not impair  the  status  of  such  persons  or
entities  as  bona  fide  purchasers  or  encumbrancers  for value. This
subdivision shall not be deemed to abrogate any duty  of  inquiry  which
exists  as  to  rights  or  interests  of  persons  in possession of the
residential real property in foreclosure or, where applicable, default.
(d) In any action brought to enforce a  rescission  pursuant  to  this
section,  a  court  may  award  to  a prevailing equity seller costs and
reasonable attorneys' fees.
9. An equity seller may bring an action for the recovery of damages or
equitable  relief  against  an  equity  purchaser  for  a  violation  of
subdivision  three,  four, six, seven or eleven of this section. A court
may award to a prevailing equity seller actual damages  plus  reasonable
attorneys'  fees  and  costs. In addition, the court may award equitable
relief, or increase the award in an amount not to exceed three times the
equity seller's actual damages, or both, if the court deems  such  award
proper.  Any  action brought pursuant to this section shall be commenced
within six years after the date of the alleged violation.
10. (a)(i) Any equity purchaser who, with intent to defraud,  violates
subdivision seven of this section or engages in any practice which would
operate  as a criminal fraud or deceit upon an equity seller shall, upon
conviction, be guilty of a class E felony and subject to a fine  of  not
more  than twenty-five thousand dollars, imprisonment in accordance with
the penal law, or both.
(ii) Any equity purchaser who knowingly violates subdivision seven  of
this  section shall, upon conviction, be guilty of a class A misdemeanor
and subject to a fine of not more  than  twenty-five  thousand  dollars,
imprisonment in accordance with the penal law, or both. A second offense
within five years shall be a class E felony and subject to a fine of not
more  than twenty-five thousand dollars, imprisonment in accordance with
the penal law, or both.
(b) An equity purchaser who,  when  acting  in  good  faith,  violates
subdivision  seven of this section, shall not be deemed to have violated
such subdivision if the equity purchaser:
(i) establishes by a preponderance of the evidence that the compliance
failure was  not  intentional  and  resulted  from  a  bona  fide  error
notwithstanding  the  maintenance  of  procedures  reasonably adapted to
avoid such errors;
(ii) notifies the equity seller within ninety  days  of  the  contract
date of the compliance failure; and
(iii)   makes   appropriate  restitution  to  the  equity  seller  and
appropriate adjustments to the transaction within  ninety  days  of  the
contract  date.    Examples  of  bona  fide  errors include, but are not
limited to, clerical, calculation, computer malfunction and programming,

and printing errors.   An error of legal  judgment  with  respect  to  a
person's obligations under this section is not a bona fide error, nor is
a  failure  to provide notices or other material information required by
this section.
11. (a) In any transaction in which an equity seller purports to grant
a  residence  in  foreclosure  or  default to an equity purchaser by any
instrument which appears to be an absolute conveyance  and  reserves  to
himself  or  herself  or  is  given by the equity purchaser an option to
repurchase,  such  transaction  shall  create  a  presumption  that  the
transaction  is  a  loan transaction, which may be overcome by clear and
convincing evidence to the contrary, and  that  the  purported  absolute
conveyance is a mortgage.
(b)   An   equity  purchaser  shall  not  enter  into  a  reconveyance
arrangement unless:
(i) The equity purchaser verifies by  appropriate  documentation  that
the  equity  seller has or is likely to have a reasonable ability to pay
for the subsequent conveyance of an interest back to the equity  seller.
In  the case of a lease with an option to purchase, payment ability also
includes the reasonable ability to purchase the property within the term
of the option to purchase. There is a rebuttable  presumption  that  the
equity  purchaser  has  not  verified  reasonable payment ability if the
equity purchaser has not obtained documents other than  a  statement  by
the  equity  seller  of assets, liabilities and income. The standard for
determining a reasonable ability to pay shall be the  same  standard  as
set  forth  in  paragraph (k) of subdivision two of section six-l of the
banking law;
(ii) the equity purchaser and the equity seller complete a closing for
any reconveyance arrangement in which the  equity  purchaser  obtains  a
deed  or  mortgage  from an equity seller. For purposes of this section,
"closing"  means  an  in-person  meeting  to  complete  final  documents
incident  to  the sale of the real property or creation of a mortgage on
the real property conducted by an attorney who is not employed by or  an
affiliate of the equity purchaser;
(iii) the equity purchaser obtains the written consent from the equity
seller  before  the equity purchaser grants any interest in the property
to anyone else during such  time  as  the  equity  seller  maintains  an
interest in the property, including an option to repurchase; and
(iv)  the equity purchaser notifies all existing mortgage lien holders
of his or her intent to accept conveyance of an interest in the property
from the equity seller, and fully complies with all terms and conditions
contained in the mortgage lien documents, including but not  limited  to
due-on-sale  provisions  or  meeting  all qualification requirements for
assuming the repayment of the mortgage.
(c) An equity purchaser shall not enter into repurchase or lease terms
as part of the reconveyance arrangement that are unfair or  commercially
unreasonable,  and  is  prohibited  from engaging in any other unfair or
unconscionable conduct.
(d) As part of a reconveyance arrangement, an equity  purchaser  shall
either:
(i)  ensure  that  title  to the residence is reconveyed to the equity
seller; or
(ii) make a payment to the equity seller such that the  equity  seller
has  received  consideration in an amount of at least eighty-two percent
of the fair market value of the property within one hundred twenty  days
of  either the eviction or voluntary relinquishment of possession of the
residence by the equity  seller.  The  equity  purchaser  shall  make  a
detailed  accounting  of the basis for the payment amount, or a detailed
accounting of the reasons for  failure  to  make  a  payment,  including

providing  written  documentation  of  expenses, within such one hundred
twenty-day period. The accounting shall be on a form prescribed  by  the
department of financial services. For purposes of this subparagraph, the
following applies:
(A)  there  is  a rebuttable presumption that an appraisal by a person
licensed or certified by an agency of the  federal  government  or  this
state  to  appraise real estate establishes the fair market value of the
property;
(B) the time for determining the fair market  value  amount  shall  be
determined  in the reconveyance arrangement as either at the time of the
execution of the reconveyance arrangement or at resale to  a  bona  fide
purchaser.  If  the  covered  contract states that the fair market value
shall be determined at the time of resale, the fair market  value  shall
be  the resale price if it is sold within one hundred twenty days of the
eviction or voluntary relinquishment  of  the  property  by  the  equity
seller.  If the covered contract states that the fair market value shall
be determined at the time of resale, and the  resale  is  not  completed
within   one   hundred   twenty   days  of  the  eviction  or  voluntary
relinquishment of the property by the equity  seller,  the  fair  market
value  shall  be  determined  by  an appraisal conducted within ten days
after the end of such one hundred  twenty-day  period  and  payment,  if
required,  shall be made to the equity seller. If payment is not made to
the equity  seller  at  such  time,  the  fair  market  value  shall  be
recalculated  as the resale price on resale and payment shall be made to
the equity seller within fifteen days of resale. A  detailed  accounting
of the basis for the payment amount shall be made within fifteen days of
resale,  including  providing  written  documentation  of  expenses. The
accounting shall be on a form prescribed by the department of  financial
services;
(C)  "consideration" shall mean any payment or thing of value provided
to the equity seller, including unpaid lease payments owed by the equity
seller prior to the date of eviction or voluntary relinquishment of  the
property,  reasonable  costs paid to third parties necessary to complete
the reconveyance transaction, payment of money  to  satisfy  a  debt  or
legal  obligation of the equity seller or the reasonable cost of repairs
for damage to the dwelling caused by the equity seller  beyond  ordinary
wear  and  tear;  but  shall not include amounts imputed as any fee paid
directly  or  indirectly  to  the  equity  purchaser,  or  his  or   her
representative,  incident  to  a  reconveyance  arrangement,  except for
reasonable costs  paid  to  third  parties  necessary  to  complete  the
reconveyance.
(D)  "resale" means a bona fide market sale of the property subject to
the reconveyance arrangement by the equity purchaser to an  unaffiliated
third party.
(E) "resale price" means the purchase price of the property on resale.
(e)  This  subdivision  shall  not  be  deemed to abrogate any duty of
inquiry which exists as to rights or interests of persons in  possession
of the residential real property in foreclosure or default.
(f)  All  deeds  or  conveyances subject to a reconveyance arrangement
shall state explicitly on the face of the document that  the  conveyance
is  subject  to a reconveyance arrangement, and shall state the terms of
the reconveyance arrangement. Moreover,  all  reconveyance  arrangements
must be simultaneously recorded by the equity purchaser with the subject
deed in the county clerk's office where the property is located.
12.  Any provision of a covered contract which attempts or purports to
limit the liability of the equity purchaser under this section shall  be
null  and  void.  Inclusion of such provision shall at the option of the
equity seller render the covered contract  void.  The  equity  purchaser

shall  be liable to the equity seller for all damages proximately caused
by such provision. Any provision in a covered contract which attempts or
purports to require  arbitration  of  any  dispute  arising  under  this
section shall be void at the option of the equity seller.
13.  In  addition to the other remedies provided, whenever there shall
be a violation of this section, application may be made by the  attorney
general in the name of the people of the state of New York to a court or
justice  having  jurisdiction  by  a  special  proceeding  to  issue  an
injunction, and upon notice to the defendant of not less than five days,
to enjoin and restrain the continuance of such  violations;  and  if  it
shall  appear  to  the  satisfaction  of  the  court or justice that the
defendant has, in fact, violated this  section,  an  injunction  may  be
issued  by  such court or justice, enjoining and restraining any further
violation, without requiring proof that any person has,  in  fact,  been
injured  or  damaged thereby. In any such proceeding, the court may make
allowances to the attorney general  as  provided  in  paragraph  six  of
subdivision  (a)  of  section  eighty-three  hundred  three of the civil
practice law and rules, and direct restitution. Whenever the court shall
determine that a violation of this section has occurred, the  court  may
impose a civil penalty of not more than twenty-five thousand dollars for
each  violation.  In  connection with any such proposed application, the
attorney general is authorized to take proof and make a determination of
the relevant facts and to issue subpoenas in accordance with  the  civil
practice law and rules.
14. This section shall not apply to a prior lien holder where the lien
was  properly recorded prior to the execution of any covered contract by
both the equity seller and the equity purchaser nor shall any  provision
of this section be deemed to impair any equity or other available rights
of any such prior lien holder.
15.  The  provisions  of  this section shall be liberally construed to
effectuate  the  intent  and  to  achieve  the  purposes  set  forth  in
subdivision one of this section.
16.  The  provisions  of  this  section  are  not exclusive and are in
addition to any other  requirements,  rights,  remedies,  and  penalties
provided by law.
17.  Any  waiver  of  the provisions of this section shall be void and
unenforceable as contrary to the public policy.
18. If any provision of this section, or if any application thereof to
any person or circumstances is held unconstitutional, the  remainder  of
this  section and the application of its provisions to other persons and
circumstances shall not be affected thereby.