This text of New York § 590-A (Junior mortgage loans) is published on Counsel Stack Legal Research, covering New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.
§ 590-a. Junior mortgage loans.
1.A licensee may make a loan to a\nnatural person upon the security of a mortgage on residential real\nproperty which is not a first lien at the rate or rates agreed to by the\nlicensee and the borrower, subject to such regulations as the\nsuperintendent of financial services may prescribe. Such regulations by\nthe superintendent of financial services may include such restrictions\nas the superintendent of financial services finds necessary or proper.\nFor purposes of this section, the term mortgage shall include a lien on\nan existing ownership interest in certificates of stock or other\nevidence of an ownership interest in, and a proprietary lease from, a\ncorporation or partnership formed for the purpose of the cooperative\nownership of residential rea
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§ 590-a. Junior mortgage loans. 1. A licensee may make a loan to a\nnatural person upon the security of a mortgage on residential real\nproperty which is not a first lien at the rate or rates agreed to by the\nlicensee and the borrower, subject to such regulations as the\nsuperintendent of financial services may prescribe. Such regulations by\nthe superintendent of financial services may include such restrictions\nas the superintendent of financial services finds necessary or proper.\nFor purposes of this section, the term mortgage shall include a lien on\nan existing ownership interest in certificates of stock or other\nevidence of an ownership interest in, and a proprietary lease from, a\ncorporation or partnership formed for the purpose of the cooperative\nownership of residential real estate.\n 2. A contract, note or instrument evidencing or securing a junior\nmortgage loan shall not contain any acceleration clause which would\nprovide that the junior mortgage loan may be declared due and payable\nupon the condition that the licensee deems itself insecure with respect\nto the unpaid balance of such junior mortgage loan; shall not contain\nclauses which authorize confession of judgment; shall allow the borrower\nto prepay the loan in whole or in part without penalty, and shall\ncontain the following notice in bold face type, at least ten point size:\n "DEFAULT IN THE PAYMENT OF THIS LOAN AGREEMENT MAY RESULT IN THE\nLOSS OF THE PROPERTY SECURING THE LOAN. UNDER FEDERAL LAW, YOU MAY HAVE\nTHE RIGHT TO CANCEL THIS AGREEMENT. IF YOU HAVE THIS RIGHT, THE CREDITOR\nIS REQUIRED TO PROVIDE YOU WITH A SEPARATE WRITTEN NOTICE SPECIFYING THE\nCIRCUMSTANCES AND TIMES UNDER WHICH YOU CAN EXERCISE THIS RIGHT."\n 3. Where the contract, note or instrument evidencing or securing a\njunior mortgage loan provides for a variable rate of interest, said rate\nshall be based on a published index that is (a) readily available, (b)\nindependently verifiable, (c) beyond the control of the licensee, and\n(d) approved by the superintendent. The interest rate of the junior\nmortgage loan shall be reduced in proportion to any decrease in the\nindex rate. Increases in the interest rate may be made at the option of\nthe licensee.\n 4. The superintendent of financial services shall adopt regulations,\nincluding but not limited to: (a) providing for disclosure to the\nborrower by the licensee of the circumstances under which the rate may\nincrease, any limitations on the increase, the effect of an increase and\nan example of the payment terms that would result from an increase, (b)\nproviding for disclosure to the borrower by the licensee of a history of\nthe fluctuations of the index over a reasonable period of time, and (c)\nproviding for notice to the borrower from the licensee of any rate\nincrease or change in the terms of payment.\n 5. A line of credit secured by a junior mortgage shall be established\nin an amount of no less than twenty-five hundred dollars; and shall be\nrepayable in monthly installments.\n