§ 5 — Loans pursuant to the "Servicemen's Readjustment Act of 1944

§ 5. Loans pursuant to the "Servicemen's Readjustment Act of 1944." 1.\nSubject to such regulations and restrictions as the superintendent of\nfinancial services finds to be necessary and proper, (i) any loan at\nleast twenty per centum of which is guaranteed under title three of an\nact of congress entitled the "Servicemen's Readjustment Act of 1944,"\nmay be made or invested in by any banking organization having the power\nto make loans, and the savings and loan bank of the state of New York,\nand (ii) any bank or trust company may make any loan made on the\nsecurity of a loan or loans eligible under the preceding subparagraph\n(i), without regard to the limitations and restrictions of this chapter;\nprovided however, that\n (a) No such loan upon the security of real estate shall be made or\ninvested in if the amount of such loan exceeds the appraised value of\nsuch real estate, as improved or to be improved by the application of\nthe proceeds of such loan, or if the amount of such loan, when added to\nthe amount unpaid upon prior mortgages, liens and encumbrances upon such\nreal estate, exceeds such appraised value. Such appraised value shall be\ndetermined by an appraiser appointed pursuant to policies established by\nthe board of directors or trustees of the corporation making or\ninvesting in such loan, or, in the case of a private banker, shall be\ndetermined by the private banker or by an appraiser appointed pursuant\nto policies established by such private banker;\n (b) Each such loan, if secured by real property, shall be subject to\nthe provisions of this chapter relating to the recording of mortgages\nand assignments of mortgages upon real property;\n (bb) The requirements of the foregoing paragraphs (a) and (b) shall\nnot apply when not less than ten such mortgages are assigned as security\nfor a loan made under paragraph (ii), providing the term of such loan\ndoes not exceed twelve months;\n (c) Each such loan shall be subject to the provisions of this chapter\nprescribing the maximum limits, in amount, of (1) loans in the aggregate\nto, or upon the net liability of, any one individual and (2) loans in\nthe aggregate secured by real property;\n (d) Each such loan made or invested in by a savings bank, a savings\nand loan association, or the savings and loan bank of the state of New\nYork shall be subject to the following additional provisions: (1) a loan\npursuant to section five hundred one, five hundred two or five hundred\nthree of the "Servicemen's Readjustment Act of 1944," for the purpose of\nrepairing, altering or improving a building or buildings, and a loan\npursuant to section five hundred five (a) of such act, need not be\nsecured by a lien on real property, but all other loans pursuant to such\nact must be secured by a first lien on such property; and (2) in the\ncase of each loan for the acquisition or benefit of, or secured by, real\nproperty, such real property must, if located without the state of New\nYork, be located, in the case of a savings bank, within twenty-five\nmiles of the principal office of such savings bank; in the case of a\nsavings and loan association, within fifty miles of the principal office\nof such association; and, in the case of the savings and loan bank of\nthe state of New York, within fifty miles of the principal office of\nsuch bank or the principal office of one of its member savings and loan\nassociations; except that, if the amount of a loan secured by real\nproperty, after deducting therefrom the amount thereof which is\nguaranteed pursuant to such act, is in excess of two-thirds of the\nappraised value of such real property, as determined in accordance with\nparagraph (a) of this subdivision, such real property must be located\nwithin the state of New York and, in the case of a savings bank or a\nsavings and loan association, within one hundred miles of the principal\noffice of any such corporation which makes, and any such corporation\nwhich invests in, such loan; and except that, in the case of a loan\npursuant to section five hundred five (a) of such act, the real property\nfor the acquisition or benefit of which such loan is made may be located\nwithin the applicable and prescribed limits of this chapter as to the\nlocation of real property securing a loan insured by the federal housing\ncommissioner.\n (e) The authority provided in this subdivision to invest in any loan\nsecured by real property guaranteed pursuant to the provisions of the\nact of congress entitled the "Servicemen's Readjustment Act of 1944",\nshall include authority to acquire title to real property in connection\nwith investing in an installment contract for the sale of real property,\nso guaranteed, where the purchaser under such contract is in possession\nand control of the property, and title is acquired by the banking\norganization solely as security for the obligations of the purchaser.\n 2. In complying with the provisions of this chapter which prescribe\nthe maximum limits, in amount, of loans in the aggregate to, or upon the\nnet liability of, any one individual, and loans in the aggregate secured\nby real property, a banking organization or the savings and loan bank of\nthe state of New York may deduct from the total amount of each loan made\nor invested in by it that portion of such loan which is guaranteed\npursuant to the "Servicemen's Readjustment Act of 1944", and, in the\ncase of each loan made or invested in by it which is secured by a loan\nwhich is guaranteed pursuant to said act, may deduct that portion which\nis equal to the portion of such security which is so guaranteed.\n 3. The foregoing provisions of this section shall not apply to loans\ninsured pursuant to section five hundred eight of the "Servicemen's\nReadjustment Act of 1944," but the superintendent of financial services\nshall have power to authorize banking organizations and the savings and\nloan bank of the state of New York to make and invest in such loans upon\nsuch terms and conditions as it shall prescribe. Nothing contained in\nthis section shall prevent loans guaranteed or insured pursuant to the\n"Servicemen's Readjustment Act of 1944" from being made or invested in\nunder, and subject to the limitations and restrictions of, other\nprovisions of this chapter.\n