S T A T E   O F   N E W   Y O R K
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                                  3186

                       2015-2016 Regular Sessions

                          I N  A S S E M B L Y

                            January 22, 2015
                               ___________

Introduced by M. of A. FITZPATRICK, BARCLAY, RA -- Multi-Sponsored by --
  M.  of  A. CROUCH, GIGLIO, McDONOUGH, RAIA, SALADINO, TEDISCO, TENNEY,
  THIELE -- read once and referred to the Committee on Housing

AN ACT to amend the public authorities law, in relation to  establishing
  a home equity protection insurance program

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

  Section 1. Subdivision 31 of section 2404 of  the  public  authorities
law,  as  renumbered  by  chapter 151 of the laws of 2013, is renumbered
subdivision 32 and a new subdivision 31 is added to read as follows:
  (31) TO ESTABLISH AND ADMINISTER A HOME  EQUITY  PROTECTION  INSURANCE
PROGRAM  IN  ACCORDANCE  WITH SECTION TWENTY-FOUR HUNDRED FIVE-F OF THIS
PART.
  S 2. The public authorities law is amended by  adding  a  new  section
2405-f to read as follows:
  S  2405-F. HOME EQUITY PROTECTION INSURANCE PROGRAM. (1) THE AGENCY IS
HEREBY DIRECTED, TO THE EXTENT IT FINDS PRACTICABLE, TO ESTABLISH A HOME
EQUITY PROTECTION INSURANCE PROGRAM WHEREBY IT WILL ISSUE  A  COMMITMENT
TO  INSURE  AND INSURE THE FULL VALUE OF A ONE-TO-FOUR FAMILY RESIDENCE,
INCLUDING A CONDOMINIUM AND A COOPERATIVE, THAT IS OWNER-OCCUPIED BY ANY
PERSON OR PERSONS WHO MEET  THE  INCOME  QUALIFICATIONS  FOR  A  FORWARD
COMMITMENT  MORTGAGE  PURSUANT  TO SECTION TWENTY-FOUR HUNDRED FIVE-B OF
THIS PART. THE FULL VALUE OF THE  RESIDENTIAL  REAL  PROPERTY  SHALL  BE
DETERMINED  BY  EITHER  ITS  PURCHASE PRICE, THE PURCHASE PRICE PLUS THE
COST OF ANY REHABILITATION TO THE RESIDENCE, OR AN APPRAISAL. THE INSUR-
ANCE SHALL BE ISSUED BY THE AGENCY AFTER THE PURCHASE OR  THE  REHABILI-
TATION  OF  THE  REAL PROPERTY UPON PAYMENT OF A PREMIUM THAT THE AGENCY
SHALL DETERMINE.
  (2) UPON THE SALE OF THE RESIDENTIAL REAL PROPERTY THAT IS INSURED  BY
THE  AGENCY  THROUGH ITS HOME EQUITY INSURANCE PROGRAM, THE AGENCY SHALL
PAY THE POLICY HOLDER/OWNER THE DIFFERENCE BETWEEN THE FACE VALUE OF THE

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD05797-01-5
              

A. 3186                             2

INSURANCE POLICY AND THE SALES PRICE OF THE  INSURED  PREMISES  IF  SUCH
SALES  PRICE  IS  LESS  THAN  THE  INSURED  AMOUNT  AND  IF  THE  POLICY
HOLDER/OWNER HAS LIVED IN THE PREMISES FOR A PERIOD  OF  NOT  LESS  THAN
THREE  YEARS.  THE AGENCY SHALL ESTABLISH PROCEDURES TO BE FOLLOWED BY A
POLICY HOLDER/OWNER IN THE EVENT OF A PAYMENT UNDER  THE  TERMS  OF  ANY
HOME  EQUITY  PROTECTION  INSURANCE  POLICY.  THE  AGENCY  SHALL  NOT BE
REQUIRED TO PAY ON A CLAIM FOR A LOSS OF EQUITY IF  IT  DETERMINES  THAT
SUCH  LOSS OCCURRED PREDOMINANTLY FROM THE POLICY HOLDER/OWNER'S NEGLECT
OF THE REAL PROPERTY'S PHYSICAL CONDITION.
  (3)(A) THE AGENCY SHALL CREATE A HOME EQUITY PROTECTION INSURANCE FUND
TO BE USED AS A REVOLVING FUND FOR CARRYING OUT THE PROVISIONS  OF  THIS
SECTION  WITH  RESPECT  TO RESIDENTIAL REAL PROPERTY INSURED THEREUNDER.
THE AGENCY SHALL PAY INTO SUCH FUND ALL MONEYS WHICH MAY BE AVAILABLE TO
THE AGENCY FOR THE PURPOSES OF SUCH FUND FROM ANY SOURCE, INCLUDING  BUT
NOT  LIMITED TO THE MONEYS RECEIVED FROM PREMIUMS DERIVED FROM THE ISSU-
ANCE OF HOME EQUITY PROTECTION INSURANCE POLICIES.
  (B) THE AGENCY SHALL MAINTAIN  IN  THE  EQUITY  INSURANCE  FUND  AS  A
RESERVE  AN  AMOUNT  OF  MONEY OR CASH EQUIVALENTS EQUAL TO NO LESS THAN
TWENTY PERCENT OF THE AMOUNTS INSURED UNDER  THE  AGENCY'S  HOME  EQUITY
PROTECTION INSURANCE CONTRACTS.
  (4)  MONEYS  IN  SUCH FUND MAY BE INVESTED (A) IN SPECIAL TIME DEPOSIT
ACCOUNTS IN, OR CERTIFICATES OF DEPOSIT ISSUED BY, A BANK, TRUST  COMPA-
NY,  SAVINGS BANK OR SAVINGS AND LOAN ASSOCIATION LOCATED AND AUTHORIZED
TO DO BUSINESS IN THIS STATE; PROVIDED, HOWEVER, THAT SUCH TIME  DEPOSIT
ACCOUNT  OR  CERTIFICATE OF DEPOSIT SHALL BE PAYABLE WITHIN SUCH TIME AS
THE PROCEEDS MAY BE NEEDED TO MEET EXPENDITURES ESTIMATED TO BE INCURRED
BY THE AGENCY AND PROVIDED FURTHER THAT SUCH  TIME  DEPOSIT  ACCOUNT  OR
CERTIFICATE  OF  DEPOSIT  BE  SECURED  BY A PLEDGE OF OBLIGATIONS OF THE
UNITED STATES OF AMERICA OR OBLIGATIONS OF THE STATE, ANY  CITY  OF  THE
STATE,  OR  OTHER  MUNICIPAL  CORPORATION,  SCHOOL  DISTRICT OR DISTRICT
CORPORATION OF THE STATE OR  OBLIGATIONS  OF  AGENCIES  OF  THE  FEDERAL
GOVERNMENT; OR (B) IN OBLIGATIONS OF THE UNITED STATES OF AMERICA OR THE
STATE  WHICH MAY FROM TIME TO TIME BE LEGALLY PURCHASED BY SAVINGS BANKS
WITHIN THE STATE AS AN INVESTMENT OF FUNDS BELONGING TO THEM OR IN THEIR
CONTROL, OR IN OBLIGATIONS OF THE FEDERAL NATIONAL MORTGAGE  ASSOCIATION
PROVIDED  SUCH  OBLIGATIONS SHALL BE PAYABLE OR REDEEMABLE AT THE OPTION
OF THE OWNER WITHIN SUCH TIMES AS THE PROCEEDS MAY  BE  NEEDED  TO  MEET
EXPENDITURES ESTIMATED TO BE INCURRED BY THE AGENCY.
  S 3. This act shall take effect on the one hundred eightieth day after
it shall have become a law.