§ 254-a. Right of election of mortgagee in certain cases. If a bond or
note, or the mortgage on real property, improved by a one to six family
residence occupied by the owner, securing the payment of same, contains
(1) a provision whereby the mortgagee retains the right to accelerate
the due date for payment of the balance of principal upon a transfer or
sale of such real property or by alienation of title of such real
property due to an act or operation of law, and (2) a provision for
payment of any charge, however denominated, in the nature of a
prepayment fee and if a mortgagor sells or transfers his property or if
title to the mortgaged property is transferred by act or operation of
law and the purchaser requests permission to assume the mortgage or take
the mortgaged premises subject to the mortgage, but the mortgagee does
not consent to such request and thereby necessitates prepayment of the
mortgage, the mortgagee shall not levy a prepayment fee; provided,
however, that the provisions of this section shall not apply to the
extent such provisions are inconsistent with any federal law or
regulation.