New York Codes, Rules and Regulations › Title 3 - BANKING › Chapter I - GENERAL REGULATIONS OF THE SUPERINTENDENT › Part 41 - Restrictions And Limitations On High Cost Home Loans › Section 41.4 - Additional requirements

Current through Register Vol. 46, No. 28, July 10, 2024
The following are required in order to make a high cost home
				  loan.
(a) Mortgage brokers and lenders
				must give the disclosures required pursuant to Part 38 of this Title, as
				applicable, to the borrower and any other obligor in writing at the time of
				application which shall be at least 10 days prior to the closing whether or not
				funds are then disbursed. In addition, at or prior to taking an application,
				mortgage brokers and lenders must also deliver, place in the mail, fax or
				electronically transmit to the borrower a statement in substantially the
				following form: "Although your aggregate monthly debt payment may decrease, the
				high cost home loan may increase both (i) your aggregate number of monthly debt
				payments and (ii) the aggregate amount paid by you over the term of the high
				cost home loan" if such are likely the case. This disclosure need not be a
				separate document. A lender may agree with a broker that the broker shall make
				the disclosures required by this Part and Part 38 of this Title on behalf of
				the lender. However, it remains the responsibility of the lender to ensure that
				such disclosures are made. In the event that the lender or broker does not know
				whether the borrower's application is a high cost home loan application, such
				disclosure must be made within three days after the lender determines that it
				is a high cost home loan application, but in any event, at least 10 days prior
				to the closing. In the event of a telephone application, the disclosure must be
				made within three days after receipt of the application by telephone, but in
				any event, at least 10 days prior to the closing. In order to utilize
				electronic transmission, the lender or broker must first obtain either written
				or electronically transmitted permission from the borrower.
(b) The lender must report both the favorable
				and unfavorable payment history of the borrower to a nationally recognized
				consumer credit bureau at least annually during such period as the lender holds
				or services the high cost home loan.
(c) Mortgage brokers and lenders that broker
				or make 10 or more high cost home loans per year must report to the Banking
				Department annually, on or before March 31st in each year, the names and
				addresses of the three home improvement contractors, the three consultants and
				the three attorneys who obtain the largest number of payments directly from the
				proceeds of high cost home loans made or brokered by the lender or mortgage
				banker. They must also provide the names and addresses of any home improvement
				company that is an affiliate. This provision shall not apply to attorneys in
				their capacity as closing attorneys for lenders.
(d) The following statement in a minimum of
				12-point type must appear directly above the borrower's signature line on the
				application: "The loan which may be offered to you is not necessarily the least
				expensive loan available to you and you are advised to shop around to determine
				comparative interest rates, points and other fees and charges." In the event of
				telephone applications, this disclosure shall be made to the borrower within
				three days of receipt of an application, but in any event at least 10 days
				prior to the closing whether or not funds are then disbursed. In the event that
				the lender or broker does not know whether the borrower's application is a high
				cost home loan application, such disclosure must be made within three days
				after the lender determines that it is a high cost home loan application, but
				in any event, at least 10 days prior to closing whether or not funds are then
				disbursed. If the mortgage application form is prescribed by a
				government-sponsored entity, such statement shall be placed on a separate
				document and attached to the front of the mortgage application.