§ 595-C — Regulation of dealings of mortgage brokers and home improvement contractors

§ 595-c. Regulation of dealings of mortgage brokers and home\nimprovement contractors. 1. No home improvement contractor nor any\nagents or salespersons thereof shall represent, act as an agent for, or\nadvertise, promote or arrange for the services of a mortgage broker or\nits affiliate while soliciting home improvement contracts nor receive\nanything of value from a mortgage broker or its affiliate for the\nreferral of a borrower to a mortgage broker. The staff of a home\nimprovement contractor shall not act on behalf of a mortgage broker in\nany transaction.\n 2. Where a mortgage broker has solicited, processed, placed or\nnegotiated a mortgage loan, a home improvement contractor shall not be\npaid directly but instead may receive payment from the proceeds of a\nhome improvement loan payable solely to the borrower or, at the election\nof the borrower, through an independent third party escrow agent in\naccordance with the terms established in a written agreement signed by\nthe borrower, the lender and the contractor prior to disbursement. A\nmortgage broker shall not offer a homeowner different loan terms\ncontingent on the homeowner executing an agreement for payment through\nan independent third party as described in the preceding sentence. Any\nsuch agreement shall contain a clear and conspicuous disclosure: YOU ARE\nNOT REQUIRED TO EXECUTE THIS AGREEMENT. YOU MAY INSTEAD RECEIVE PAYMENT\nDIRECTLY. (NAME OF MORTGAGE BROKER) MAY NOT OFFER YOU DIFFERENT TERMS ON\nYOUR LOAN TO SIGN THIS AGREEMENT. The provisions of this subdivision\nshall not apply to a home improvement loan insured by the federal\nhousing administration under section 203(k) of the National Housing Act,\n12 U.S.C. 1709(k), or to amounts added to a federal housing\nadministration insured mortgage under the energy efficiency mortgage\nprogram originally established under section 106 of the Energy Policy\nAct of 1992, as from time to time amended.\n 3. A mortgage broker shall not permit a home improvement contractor to\nbe a cosigner or to act as a guarantor for a mortgage loan for home\nimprovement.\n 4. For the purpose of this section, "home improvement contractor",\nmeans, with respect to any home improvement, a person, firm or\ncorporation which owns or operates a home improvement business or who\nundertakes, offers to undertake or agrees to perform any home\nimprovement for a fee and for whom the total price for all labor,\nmaterials and other items is equal to or greater than two hundred\ndollars. Home improvement contractor does not include a person, firm,\ncorporation, landlord, cooperative corporation, condominium board of\nmanagers, joint tenant or co-tenant that owns, in whole or in part, the\nproperty to be improved.\n 5. This section shall not annul, alter, affect or exempt any person\nsubject to the provisions of this section from complying with the laws,\nordinances, rules or regulations of any locality or other governmental\nbody, relating to home improvement contracts, except to the extent that\nsuch laws, ordinances, rules or regulations are inconsistent with any\nprovision of this section, but no such law, ordinance, rule or\nregulation shall be considered inconsistent, if it affords greater\nprotection to the homeowner from persons subject to this section.\n