New York Codes, Rules and Regulations › Title 3 - BANKING › Chapter I - GENERAL REGULATIONS OF THE SUPERINTENDENT › Part 80 - Investment In Junior Lien Mortgage Loans By Commercial Banks, Savings Banks, Credit Unions, Mortgage Bankers And Savings And Loan Associations › Section 80.4 - Disclosure

Current through Register Vol. 46, No. 28, July 10, 2024
(a) Prior to
				accepting an application for a loan, a lender must disclose in writing or via
				electronic media to each loan applicant, in one or more documents, and in plain
				language, the terms of the type(s) of loan(s) sought by the applicant. The
				disclosure statement provided to an applicant shall include at least such of
				the following information as is relevant to the type of loan being offered:
(1) the term to maturity;
(2) the initial interest rate, if known, or
				the manner in which the initial interest rate will be established;
(3) the amount of the initial payment, if
				known, and an explanation of the lender's amortization schedule for the loan,
				including how the lender determines both the amount of each payment and the
				proportion of each payment which will be credited to interest;
(4) a full explanation of how the interest
				rate, the payment, the loan balance, or the term to maturity may be adjusted
				(including identification of the index/indices to be used and how index values
				may be obtained by the borrower), and how the adjustment of one may affect the
				others including disclosure of the intervals at which the lender may change the
				rate on the loan, the time(s) or date(s) at which the lender calculates the
				rate with respect to the index/indices, and any conditions or events on which
				the changes in rate are contingent;
(5) the fact that the borrower will receive
				notification in writing or via electronic media from the lender of increases in
				the rate or changes in the term of payment, and what information will be
				contained in each notice of an adjustment and, in the case of a nonamortizing
				or partially amortizing loan, in the notice of maturity, and how far in advance
				of an adjustment or maturity each notice will be provided;
(6) where a valid prepayment penalty will be
				provided for in the loan contract, a description of such penalty;
(7) if the loan contract will provide for
				escrow payments, a statement of that fact and an explanation of the purpose of
				requiring escrow payments and how the amount of such payments is
				established;
(8) a hypothetical
				example, illustrative of the type of credit being offered, of the effect or the
				combination of effects that an increase in the rate on the loan may have on the
				amount of the monthly payment, or the number of monthly payments or the amount
				of the final payment; and
(9) the
				history of the movements in the index chosen for the loan, including the
				highest and lowest interest rates reached by the index, and the dates at which
				these levels were reached, for each of the three calendar years preceding the
				year in which the loan is made, provided further that if a loan is made after
				August 31st of any calendar year, the disclosures shall include the high and
				low figures for the index's performance through June 30th of that year and such
				disclosure may be used as the disclosure of the high and low in index
				performance for the calendar year next preceding the calendar year in which the
				loan is made for any loan made prior to March 1st of a calendar year.
If an application is accepted by telephone, the lender shall
				  mail, deliver or transmit by electronic media the required disclosure statement
				  within three business days.