S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   6948
 
                        2019-2020 Regular Sessions
 
                           I N  A S S E M B L Y
 
                              March 27, 2019
                                ___________
 
 Introduced  by  M.  of A. FITZPATRICK, RA, GIGLIO, BARCLAY, BLANKENBUSH,
   TAGUE, SALKA -- Multi-Sponsored by --  M.  of  A.  CROUCH,  DeSTEFANO,
   MANKTELOW,  McDONOUGH,  RAIA,  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 33 of section 2404 of  the  public  authorities
 law,  as  renumbered  by  chapter  72 of the laws of 2016, is renumbered
 subdivision 34 and a new subdivision 33 is added to read as follows:
   (33) TO ESTABLISH AND ADMINISTER A HOME  EQUITY  PROTECTION  INSURANCE
 PROGRAM  IN  ACCORDANCE  WITH SECTION TWENTY-FOUR HUNDRED FIVE-G OF THIS
 PART.
   § 2. The public authorities law is amended by  adding  a  new  section
 2405-g to read as follows:
   §  2405-G. 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
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD03023-01-9

 A. 6948                             2
 
 PAY THE POLICY HOLDER/OWNER THE DIFFERENCE BETWEEN THE FACE VALUE OF THE
 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.
   § 3. This act shall take effect on the one hundred eightieth day after
 it shall have become a law.