S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   5637
 
                        2021-2022 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             February 22, 2021
                                ___________
 
 Introduced  by M. of A. FITZPATRICK, BARCLAY, BLANKENBUSH, J. M. GIGLIO,
   RA, SALKA, TAGUE -- Multi-Sponsored by -- M. of A. DeSTEFANO,  MANKTE-
   LOW, McDONOUGH -- 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
 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.
              

                                                            LBD08092-01-1

 A. 5637                             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.
   § 3. This act shall take effect on the one hundred eightieth day after
 it shall have become a law.