S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  1365

                       2011-2012 Regular Sessions

                          I N  A S S E M B L Y

                               (PREFILED)

                             January 5, 2011
                               ___________

Introduced  by  M. of A. JEFFRIES, P. RIVERA, REILLY, COLTON, ZEBROWSKI,
  WEISENBERG, BOYLAND, SPANO,  KELLNER,  ROSENTHAL,  JAFFEE,  MARKEY  --
  Multi-Sponsored  by  -- M. of A.  FARRELL, GUNTHER, HEASTIE, V. LOPEZ,
  PHEFFER, SALADINO, SCARBOROUGH, WEINSTEIN -- read once and referred to
  the Committee on Banks

AN ACT to amend the banking law, in relation to directing licensed mort-
  gage bankers and authorized mortgage loan originators to provide mort-
  gage applicants with a mortgage bill of rights pamphlet on residential
  mortgages

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1.  The  banking law is amended by adding a new section 35 to
read as follows:
  S 35. INFORMATION PAMPHLET FOR RESIDENTIAL MORTGAGE  APPLICANTS.    1.
THE SUPERINTENDENT OF BANKS SHALL DEVELOP A PAMPHLET KNOWN AS "THE MORT-
GAGE  APPLICANT'S  BILL OF RIGHTS" AND POST SUCH PAMPHLET ON THE BANKING
DEPARTMENT'S INTERNET WEBSITE. COPIES OF SUCH PAMPHLET SHALL BE PROVIDED
TO ALL LICENSED LENDERS AND BANKING ORGANIZATIONS  OFFERING  RESIDENTIAL
MORTGAGE  SERVICES.    A  COPY  OF  SUCH  PAMPHLET  SHALL BE PROVIDED BY
LICENSED LENDERS AND BANKING ORGANIZATIONS TO EACH  PERSON  BEFORE  SUCH
PERSON  ENTERS INTO AN APPLICATION FOR A LOAN SECURED BY A MORTGAGE UPON
RESIDENTIAL REAL PROPERTY. FURTHERMORE, SUCH LICENSED LENDER AND BANKING
ORGANIZATION SHALL NOT ACCEPT AN APPLICATION FOR A RESIDENTIAL  MORTGAGE
UNTIL THE PERSON OR PERSONS APPLYING FOR A MORTGAGE HAVE BEEN PROVIDED A
COPY  OF  THE  BOOKLET  AND ACKNOWLEDGED RECEIPT OF IT IN WRITING. EVERY
LICENSED LENDER AND BANKING ORGANIZATION SHALL  MAINTAIN  SUCH  ACKNOWL-
EDGEMENT ALONG WITH THE APPLICANT'S MORTGAGE LOAN DOCUMENTS.
  2.  THE PAMPHLET AND WEBSITE NOTICE DEVELOPED PURSUANT TO THIS SECTION
SHALL INCLUDE THE FOLLOWING, ALONG WITH OTHER INFORMATION ADDED  AT  THE

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD03274-02-1
              

A. 1365                             2

DISCRETION  OF  THE  SUPERINTENDENT  NOT OTHERWISE INCONSISTENT WITH THE
INFORMATION SET FORTH IN THE PAMPHLET:
  "BILL OF RIGHTS FOR RESIDENTIAL MORTGAGE APPLICANTS
AS AN APPLICANT FOR A RESIDENTIAL MORTGAGE YOU HAVE THE RIGHT TO:
  1.  COMPARE  THE  CHARGES OF DIFFERENT MORTGAGE BROKERS AND LENDERS TO
OBTAIN THE BEST LOAN POSSIBLE.
  2. ASK YOUR MORTGAGE BROKER TO EXPLAIN  HIS  OR  HER  RESPONSIBILITIES
WITHIN THE MORTGAGE LENDING PROCESS.
  3.  KNOW  HOW  MUCH  THE MORTGAGE BROKER IS COMPENSATED BY YOU AND THE
LENDER FOR YOUR LOAN.
  4. A CLEAR AND TRUTHFUL EXPLANATION OF THE TERMS AND CONDITIONS OF THE
LOAN.
  5. KNOW IF THE LOAN BEING OFFERED IS A FIXED OR ADJUSTABLE RATE  MORT-
GAGE  LOAN, KNOW THE EXACT AMOUNT OF YOUR MONTHLY LOAN PAYMENTS, INCLUD-
ING ANY PROJECTED ESCROW PAYMENTS, KNOW THE FINAL ANNUAL PERCENTAGE RATE
(APR) AND THE AMOUNT OF REGULAR PAYMENTS AT THE LOAN'S CLOSING.
  6. ASK FOR A GOOD FAITH ESTIMATE OF ALL LOAN  AND  SETTLEMENT  CHARGES
BEFORE  YOU AGREE TO THE LOAN AND PAY ANY FEES, SUCH AS LOAN APPLICATION
FEES, TITLE SEARCH AND INSURANCE FEES, LENDER'S ATTORNEY FEES,  PROPERTY
APPRAISAL  CHARGES,  INSPECTIONS,  RECORDING FEES, TRANSFER TAXES, POINT
AND ORIGINATION FEES, AND ESCROW ACCOUNT BALANCES.
  7. OBTAIN CREDIT COUNSELING BEFORE CLOSING A LOAN.
  8. DECIDE WHETHER OR NOT TO FINANCE ANY PORTION OF THE POINTS OR FEES.
  9. REFUSE TO PURCHASE CREDIT INSURANCE FOR ANY MORTGAGE LOAN.
  10. HAVE YOUR PROPERTY APPRAISED BY AN  INDEPENDENT  LICENSED  PROFES-
SIONAL AND TO RECEIVE A COPY OF THE APPRAISAL.
  11. NOT BE SUBJECT TO DECEPTIVE MARKETING PRACTICES.
  12. ASK FOR THE HUD SETTLEMENT COSTS BOOKLET, "BUYING YOUR HOME".
  13.  RECEIVE  THE  FOLLOWING  DOCUMENTS,  AND EVERY DOCUMENT OTHERWISE
REQUIRED TO BE GIVEN TO YOU AT CLOSING UNDER FEDERAL AND NEW YORK  STATE
LAW:
  A. GOOD FAITH ESTIMATE
  B. TRUTH IN LENDING
  C. HUD-1 STATEMENT
  14. KNOW WHAT FEES ARE NOT REFUNDABLE IF YOU DECIDE TO CANCEL THE LOAN
AGREEMENT.
  15.  RECEIVE  IN  WRITING  THE  REASON  FOR  THE DENIAL OR CONDITIONAL
APPROVAL OF YOUR LOAN APPLICATION.
  16. IF REFINANCING, YOU MAY CANCEL A LOAN WITHIN  THREE  DAYS  OF  THE
CLOSING  BY  PROVIDING  WRITTEN  NOTIFICATION  OF  CANCELLATION  TO  THE
LICENSED LENDER OR BANKING INSTITUTION.
  17. RECEIVE THE HUD-1 DOCUMENT ONE DAY BEFORE THE CLOSING TAKES PLACE.
  18. HAVE ANY LENDING DISPUTES RESOLVED IN A FAIR AND EQUITABLE MANNER.
  19. A CREDIT DECISION  THAT  IS  NOT  BASED  UPON  YOUR  RACE,  COLOR,
NATIONAL ORIGIN, RELIGION, SEX, FAMILY STATUS, SEXUAL ORIENTATION, DISA-
BILITY OR WHETHER ANY INCOME IS FROM PUBLIC ASSISTANCE.
  20. FILE A COMPLAINT WITH THE NEW YORK STATE BANKING DEPARTMENT IF YOU
BELIEVE THAT A MORTGAGE BROKER OR ANY OTHER ENTITY LICENSED BY THE BANK-
ING  DEPARTMENT HAS VIOLATED ANY RULES, REGULATIONS OR LAWS WHICH GOVERN
HIS OR HER CONDUCT IN WORKING WITH YOU TO  GET  OR  PROCESS  A  MORTGAGE
LOAN.
  21.  FILE  A  COMPLAINT WITH THE NEW YORK STATE DEPARTMENT OF STATE IF
YOU BELIEVE THAT A REAL ESTATE BROKER  HAS  VIOLATED  ANY  RULES,  REGU-
LATIONS  OR  LAW WHICH GOVERNS HIS OR HER CONDUCT IN WORKING WITH YOU TO
PURCHASE A HOME."

A. 1365                             3

  S 2. This act shall take effect on the one hundred twentieth day after
it shall have become a law; provided that,  effective  immediately,  any
and all actions necessary to implement the provisions of this act on its
effective  date are authorized and directed to be completed on or before
such date.