§ 589 — Declaration of policy

§ 589. Declaration of policy. The origination, funding and servicing\nof residential mortgage loans and the types of entities involved in\nresidential mortgage lending has undergone significant changes in recent\nyears, due in part to developments in the general economy, specifically\ninterest rate volatility, the sophistication of the national secondary\nmarket for mortgage loans and the market for mortgage-backed securities.\nThe recent trend toward deregulation in the financial services industry\nhas accelerated the evolution of residential mortgage lending,\ndramatically increasing the types of mortgage loans offered and the\nmanner in which they are advertised and marketed to consumers.\nDepository institutions, traditionally the major source of residential\nmortgage financing for individuals, now compete for capital and\ncustomers with mortgage bankers and other financial service\norganizations. Residential mortgage lenders of every type have\nincreasingly relied on non-financial intermediaries, such as mortgage\nbrokers, to make loans available to consumers. These developments have\nraised questions as to whether all entities engaging in this banking\nfunction operate under appropriate regulatory scrutiny and as to whether\nall residential mortgage lenders are conducting their business in the\nbest interests of New York homeowners and potential homeowners.\n The activities of lenders and their agents offering financing for\nresidential real property have a direct and immediate impact upon the\nhousing industry, the neighborhoods and communities of this state, its\nhomeowners and potential homeowners. The legislature finds that it is\nessential for the protection of the citizens of this state and the\nstability of the state's economy that reasonable standards governing the\nbusiness practices of mortgage lenders and their agents be imposed. The\nlegislature further finds that the obligations of lenders and their\nagents to consumers in connection with making, soliciting, processing,\nplacing or negotiating of mortgage loans are such as to warrant the\nuniform regulation of the residential mortgage lending process,\nincluding the application, solicitation, making and servicing of\nmortgage loans. Consistent with the purposes of promoting mortgage\nlending for the benefit of our citizens by responsible providers of\nmortgage loans and services and avoiding requirements inconsistent with\nlegitimate and responsible business practices in the mortgage lending\nindustry, the purpose of this article is to protect New York consumers\nseeking a residential mortgage loan and to ensure that the mortgage\nlending industry is operating fairly, honestly and efficiently, free\nfrom deceptive and anti-competitive practices.\n